Jake Aaron Villarreal: Welcome to our podcast, From the Ground Up, where we interview startup founders exploring their journeys, their success, challenges, and lessons learned. We hope you'd be inspired in discovering what it takes to build a thriving startup. I'm your host, Jake Aaron Villarreal, and here with us today we have Burnt Banksy, the founder and CEO of Burnt. Burnt, welcome to the show.
Burnt Banksy: Thank you for having me.
Jake Aaron Villarreal: Great. Well, I know you're just coming off another podcast, we're jumping right into another one. So happy to uh to have you on board here. Uh let me share a little bit about uh who you are with the audience uh so they know, and then we'll dive into your story here. So Burnt Banksy first made global headlines with the burning of an authentic Banksy artwork in an effort to prove the concept of digital scarcity. The act received universal acclaim and was covered by leading publications such as Bloomberg, CoinDesk, GQ, CoinTelegraph, BBC, CBS, Hypebeast, Artnet, TechCrunch, and many others. Burnt Banksy went on to fund Burnt, which is building the generalized abstraction layer of blockchains. XION [Burnt] has raised over $11 million from prominent investors including Animoca, uh Multicoin, HashKey, Spartan, and recently announced Circle Strategic Investment as well. We got a lot going on here, Burnt. Uh before we really dive in, uh share with us where you, where you're joining us from today.
Burnt Banksy: Yeah, absolutely. I'm uh I'm actually in New York right now. Uh we're uh in New York right now, uh here for like eight years now actually.
Jake Aaron Villarreal: Oh wow, great. Are you originally from there?
Burnt Banksy: Originally from Florida. Yeah, I did a reverse snowbird thing.
Jake Aaron Villarreal: Yeah, everyone... I lived in New York City and everyone went down to Florida and got out. My parents were born in New York and then went to Florida and they're like, "You're fucking crazy, welcome back to the city." It's my favorite city in the world. Uh but uh great. Well excited to have you on here. Um we're going to talk about your story and we're going to talk about the product that you've created. But before we do that, um kind of give us a little background of you kind of growing up. What was your, what were your experiences like that helped shape you to eventually at some point becoming an entrepreneur?
Burnt Banksy: Um I didn't like being told what to do. I was terrible at it. Um what shaped me in being an engineer is I always love to break the rules, uh or like find very cre-... I did very well in school but I didn't like to study and I didn't like to um follow rules that I didn't think made sense. And I think hilariously a lot of those kind of traits, uh you know, especially getting a lot... getting out of trouble a lot, uh you know, kind of talking my way out of trouble a lot, uh were weirdly very good traits in kind of being a, being a founder and like kind of seeing these holes.
Jake Aaron Villarreal: Yeah, contrarian views and not following the general population, but looking at ways to kind of carve out your own path and, and hopefully solve some problems in the process. I love that. Um is the company that we're about to talk about and the tools that you've created, um is that, is this your first startup? Or kind of walk us through your, your sort of background in, in, in the startup ecosystem.
Burnt Banksy: Yeah. Um I worked for a startup before uh also in the crypto industry called Injective. Um they do a blockchain for finance, um but originally kind of started off as a decentralized perpetuals exchange for uh using VDFs to prevent front running. Um from there went directly to Burnt Finance and built early standards on Solana. Um we, we can kind of talk about that, but it's funny, I would say that technically I am a first-time founder, although the company has been around for three years with a very serious pivot uh after the first year. And so it does feel like my second startup.
Jake Aaron Villarreal: Yeah. Yeah, pivots can be you know, tough and take a long time and totally different team.
Burnt Banksy: Yeah. I mean it was everything. New, new cap table. Like a new round of cap table. So it's very interesting in that kind of capacity where it does feel like a second uh you know a second company.
Jake Aaron Villarreal: Yeah. Great. Well you know, before we even dive into this, I'm really curious about your name, Burnt Banksy. Um you've told the story to me, but for the audience that doesn't know, give us the, give us the, the what happened, how it came about, and what were you out to prove in doing it.
Burnt Banksy: Yeah, um great. So the reason I'm called Burnt Banksy um is because I bought a Banksy piece and uh lit it on fire. Burnt Banksy. Um and we were trying to prove a point at the time, right? And I mean, I have to paint you a picture right? Because this is 2021, January, February 2021. There was no $69 million Beeple auction yet, there was no, there was no Bored Ape Yacht Club yet. There was nothing. There was CryptoKitties, there was CryptoPunks, they were not hundreds of thousands of dollars. ETH was below... ETH was in its three figures. Um you know, and we still loved it right? Like me, me and a couple friends, uh this is when I was with Injective right. Um and we, we were collecting Punks, we got a couple lost in a hack. Um but we were also collecting CryptoKitties as well. Um my parents would be like, "You know, there's no value in it um you know, it's not in my living room, I can't, I can't touch it, what's, what's the value?" right. Um you know, and I think we very early on um were pretty early to this understanding of the benefits of NFTs, right.
And I think just to take a step back, a lot of people see NFTs as what they became, which was you know a monkey chewing bubble gum that was worth $250,000. Um you know, but I think from the ground level, when, when you kind of came before that, a lot of it was this promise of: number one, this kind of globalization promise of breaking down borders and anyone can be an artist. And for the first time in this cesspool that is the internet, we can prove ownership, um which is extremely important right. And, and not like one of those "hey, I just named a star after you" which does, doesn't mean anything and live[s] on a database in some bankrupt company's uh you know unpaid AWS uh rack right, but this kind of very public uh long-term ownership right.
And so kind of going back to the story of Burnt Banksy, uh we were getting made fun of a lot right, [about] what's the value in it. So I said, "you know what? Uh you know you'll get this kind of concept a lot, but it's like you know, fuck you, let me take something that has value right." Uh bought it for $90,000, was called Morons. It was uh you know making fun of people who bought, bought NFTs from, or bought real pieces from a Sotheby's auction. We lit it on fire. We digit-, we had a Vice professional, we photograph it, and we uh sold it as an NFT for $400,000. Um you know and thus kind of proving the point that the value held and there is value in it being digital, especially as we enter a digital realm.
Jake Aaron Villarreal: Yeah, wow. Well, gutsy for one, you probably had some real support behind it, probably maybe some backlash from others and so... but I like the bravery of doing it and proving a point. Um you know, there's a lot of uh innovation that's happening uh in web2 and web3, more likely in terms of you know, crypto and different parts of technologies that are becoming I think the future. But you know, it takes trailblazers to actually create it and you have to have you know intelligence and strategy, but you also have to have guts. And so I'm really interested to kind of talk about your company. You know, you raised $11 million, it's not just you with an idea, you actually had investors behind it saying "this is a real business with a real business idea." We're going to get into what that is, but um you know it starts with the leader, and they're, they're really betting on you as much as they are the technology and the company that you're, you're building.
So um what you've created, um talk to us a little bit about the, the space that you're building in and web3. Um but more importantly, what problem are you trying to solve with your tools and technology? And then I'm going to take us back a little bit into the difference between web2 and web3 for maybe listeners that are not very technical. So I know you're very technical, we're going to probably go up and down a little bit in that level. But give us, give us the inspiration behind what you're working on today and what are you trying to solve with it?
Burnt Banksy: So let me I mean you know let me, let me actually start just kind of a little out of order on that question right. Which will be like this web2 versus web3. Um as I kind of mentioned before, the internet is a cesspool. You know when you looked at early versions of the internet, a lot of the early criticisms were "no one's going to know what information is real," right? Like... and you got Google which is really good at indexing and being able to do that, but like you can't really have this concept of ownership because you always have this kind of "oh well, right click and save," right? Like in addition to like having trust middle parties and this kind of emphasis on trust, you don't really have a really solid way of having ownership in a digital capacity.
Um you know and I think just to... are you familiar with the concept of like a co-op apartment building?
Jake Aaron Villarreal: Share it with the audience.
Burnt Banksy: Alright, so I mean it's funny because whenever I tell someone in New York they're like, "oh yeah of course I live in a co-op." But um you know uh, I guess it's a New York thing, but you know the idea of a co-op apartment building: let's say there's 10 units in a building. Um you know, each of them sell for you know whatever, a million dollars pop. Um and the only way that you can you know, as a new entrant, buy an apartment is you have to be approved by the board. Everything approved by the board, and the board is consisted of the people who own the apartments. As per you know compared to like some management rental building that's some management company that you've never heard of, the people who run the show are the people who live in the units, right.
And I think you have this interesting concept you know, similar with like that of a kibbutz, um which is this kind of group effort, this kind of communal ownership. Which is "hey, I live in this building, I want my value to go up right, like I want the value of my apartment to go up. I don't want bad neighbors. I don't want someone who's going to destroy the place and this, that, or the other." You know, and you have a board that votes on this, and that board is consensus of people who all have aligned incentives to uh you know, they own what they, what they vote on. And to take that concept, I think that's a very important concept. And if you looked at like late stage WeWork, pre-Adam Neumann whatever happened there, a lot of it really kind of resonated with crypto hilariously enough. Um you know, which was this, this "let's bring kibbutz here" in a way right? There's a power in community, there's a power in "we."
And I think when we talk about crypto and we talk about web3, there is so many different sections that you can go down, right. You can go down the cryptocurrency route, which I won't be speaking about today and frankly I don't really operate in that capacity, right. You can go down the governing, voting right route, right. But the only thing like you kind of bring it down to, you distill it down to this level of: we can now prove, we can now create scarcity online. That's it, right? In a world where it was a c- and it was a, a cesspool, we have public scarcity and we have that as a utility. Right? What you do with that, whether you create a currency, whether you create a new Spotify, whether you create a new model for making movies, it doesn't matter. I mean, the very core concept of it is, it is group consensus of um of public goods.
Um great, now that we got that knocked out right, it's not really... I don't like to say this "difference between web2 and web3." I think it's, it's, it's additive, it's not a replacement. Um and I think that's an important kind of distinction. Where I come in is: the current solutions for web3 are absolutely terrible. They are insular, they are redundant. They are very built for the people who have been in web3, like myself right, for six years. Um it takes hours and not days to onboard [to] web3. It's like a 95% drop off rate when a user's prompted with it. And for an industry that was trying to remove the concept of trust, became very quickly one of the least trusted industries. Um you know, and I think it's been quite misunderstood of what we're trying to do. Because it's also been hidden behind so much you know grifting and scams and uh you know people trying to make a quick buck. But you know I think when you, when you tie ownership into something and you tie a monetary value to something, it's really hard to avoid that, and I think you're always going to see this kind of short-term volatility when trying to solve these long-term problems.
And so where XION comes in is we want to mimic web2 experiences. We want, we've been working for you know kind of two years on this one iteration of the product which we work really, really, really hard to mimic web2. So imagine, you know we don't want you know, for the audience right, we don't want you to know that you're operating with web3. I don't think it's actually inherently important, right. Like when we're recording this on Riverside, Jake do you know who you know where Riverside is hosted on? Like I don't. Um you know, and it doesn't matter right, because we're just recording this podcast right now. And I think the benefits of web3 will mostly come, you know... I think we have this, this internal saying in the company which is like also our road map and strategy, which is you know: first of all we need to provide access to all, and then we can democratize ownership. We can't you know, otherwise it's this, this kind of Catch-22 of you're building products for the people who can use them or you're building infrastructure for nothing. Um and happy to kind of take it from there.
Jake Aaron Villarreal: Yeah, got it. I, I'm, I'm going to share my very layman's uh understanding of web2 and web3 so that uh when my mom listens to this podcast and, and the CEO that's building a $20 million company listens to it, um they're going to either say "Oh, really intelligent" or "That guy doesn't know what he's talking about." But anyway, this is something I pulled off the web. So I just want to kind of walk through it. So from, you know, Web 2.0 was really early 2000s, and it was really more of closed-off technologies that were created um, uh, and applications that were created if you think about it. You know, going from static web pages to dynamic (you know, this sounds very probably laughable in today's world because we don't even think about that). But you know, the growth of social media came out of that, and you had companies like Facebook and YouTube and Wikipedia and Twitter. Those are all Web 2.0 companies.
Today when you talk about web3, it's about decentralized and decentralization uh, and using open source, and you know technologies like smart contracts and decentralized applications and AI and machine learning. And, and you know different... we don't have to bring AI into this, yeah it's not impacting anything. Um so you know, I think just the, the framework of the two are very different, but you know the future is web3. So let's, where's the bridge that's being um built between web2 and web3? And it sounds like you're kind of doing some of that, which is you know providing the user experience of what we know in web2 applications and maybe functionality and process, but with web3 tools and infrastructure that's really the future. Does that sound accurate?
Burnt Banksy: Yeah, I mean it's, it's not as much of a jump as you might think, right? Like you didn't need to completely destroy everything in web1 to go to web2. You kind of just realized you were in web2. Um you know, and, and I think it's, it's probably a pretty negative aspect of the industry that we need to kill everything um you know in order for something new to thrive right. Like Netflix came about and it eventually displaced Blockbuster. And innovation will kind of always occur, um you know, but that doesn't mean it needs to be like this complete reset right. Um you know, so when we look at, you know, Leslie Lamport came out with a concept of distributed systems very long time ago, right. And realistically Bitcoin was just an application of a distributed system. Like we've always had the tools, we've always had distributed systems, but it's now kind of finding the application in the internet right.
And so you know very similarly to how open source has been a thing for, I mean ever, right, but there's also closed source crypto companies. Um you know and I think there's... everyone kind of has their own definitions of what web3 is, what web2 is. But you know I just, I, I think it's, I think a lot of it is marketing jargon. Um you know, I uh, I, I, I love the, the, the comparison of like "oh we're going to be making the next Uber killer." Because I do believe that the best version of Uber is Uber. Um you know, do I think that there's going to be something you know new, right? Maybe, right? Maybe there's another thing that comes up. But you want a decentralized Ubers right? You got a taxi medallion, that is fine. Like I mean there's, there's a concept where not everything needs to be replaced in order to be improved. I think things will be improved.
And I think you can you know, what would the future of Uber look like if it was on crypto, you know? May you know, a lot of it would be the drivers making more money, right? And then you'd get drivers who went there because they're making more money than Uber. And why? Because it's you know, there's no middleman to take a real cut. Everyone kind of works for themselves like they should, and they're not getting absolutely screwed on the fees. There's their own fee market for Ubers, uh you know. And it's, it's settled very quickly right? And then the payments are sent out very quickly without this concept of a middleman, right. And so it's not this you know, we're not "shadowy super coders" here uh as like a lot of people have portrayed us. But a lot of it is just saying, "hey let's, just the fact we need the middleman here, like we can do this." And a lot of that is achieved through distributed systems. A lot of that needs to be pretty trustless, right? Because you're paying a middleman for that trust to do all of these things, right? So you don't really want to change the trust... the, the hands of trust, you want to remove the need of it, right?
So when you hear this concept of web3, I think a good way to just imagine it is, is like you know, web1 was, was this like one to one, right? "Oh you're interacting with one thing, one person." You know, web2 was "hey one, you, many people are interacting with one, one company." And then web3 is like "these many people are interacting with many people," right. And it's, it's, there's not one big company, it's, it's a bunch of people. And the people who have ownership right, you go to the co-op right. Imagine if every Uber benefits by Uber (I know crypto Uber uh) succeeding, or something like that right. Or you can look at like the Netflix model of this and saying, "okay well instead of one company giving a lot of money and greenlighting a bunch of projects, what if the community did that and looked more like a, like a crowdsourcing thing," you know. And I think a lot of early concepts of crypto can be seen with like the Kickstarters and the crowdsourcing. And I think a lot of the, the laws and regulations around crowdsourcing really spurred up a lot of the excitement for crypto.
Jake Aaron Villarreal: Yeah, well said. I like that, kind of framed it up pretty good here. You know, this podcast is really about innovation, about startup founders and about business problems being solved with technology. Let's dive now into Burnt and actual the product. Walk us through what inspired you to create it, but also talk to us about um where it's, where, where your tools and infrastructure are being applied.
Burnt Banksy: Yeah. Yeah, that's a great, that's a great question. Um I would say the inspiration for XION came out of this last bear market. Which, you know, we've been bu- we built products before. Been... I've built many products, even kind of personal products, right? But I built it for myself and I built it for my friends, right, and I built it for the people that I knew. When people who have already gone through the onboarding process, who've already lost the thousands of dollars and getting rugged by buying a wrong project, or lost some NFTs by clicking the wrong link right. And it's like you know, at some point it's funny, you ask any crypto developer, "You haven't worked in crypto unless you've lost money in a rug," uh which shouldn't be the case uh you know unfortunately right. But, but it is what it is, right? And that's kind of the mentality of crypto is, is "it is what it is, it just fucking happens. Um get used to it kid." Um which I love. Um but you want to, you want to go to like the world, that's not a mentality you can really um you know.
And so XION came out this last bear market when you know it really, really struck to me that "we're, hey we're at a point where we can do this. Um we, we had the team for it, but B) it was, it was you know, when, when FTX fell and Do Kwon fell and everything like that kind of crashed, it was like 'wow, we are so untrusted.' Like that's hilarious to me that, that this whole time we were trying to build this trustless ecosystem, yet people view us as you know untrustworthy." And it was, it was kind of funny to me right. And um you know I think, I think as I kind of sat there and just realized, like was looking at one of my products that I had built, and it was like "people aren't going to be doing this anymore. Like no one's going to go to the multi-day process for a very long time. No one's going to go to these multi-day process, send money here, learn all these things." Because yeah, maybe they were doing it in the bull market when things were hot and things were cool and everyone bought a picture of a monkey. But a this next, like these next few years, no one's going to be touching the stuff. So we need to go to the user.
And like, we're at the point now where enough infra is built where we can successfully mimic web2. And we, we believe that number one, from a physical infra side, removing all the friction is necessary. But also, like you look at products that are built with crypto, it's just a fucking Robinhood knockoff. And some of them don't even try hard to, to like design differently. They're just very, very much like it's gambling right. Like it's, they're just exchanges. And you know NFT marketplaces, they're just exchanges with JPEGs. Uh and then you can get cool, you can get financial derivatives, which... I don't get me wrong, I love them. And I think there's a lot of really exciting uh derivatives that have come out, like an AMM or well whatever. Uh or a kind of perpetual market, you, you have really exciting financial products that's come out of this. However, you haven't had anything that's really reached the, the retail user and said "um, this is important to me," right? And so when you were talking about you know the internet, and then you know it was pretty siloed, and then Facebook and the Twitter and the you know those start popping up. We don't have that yet. Like we have very, excuse me, we have very, very redundant um you know products that have worked for the insular crowd that crypto is. Um and I think a lot of that is, is going back to this you know this, this Catch-22 if you would, which is "it doesn't incentivize me to be a product builder, right. Because I can go to infra that's not ready yet, and I can make a shitty product that won't hit the masses. Or I can go build infra and then not have a product uh you know for the masses," right. And so you got to do one before you can do the other.
And, and I think when we talk about that we need to provide access to all, and then redefine ownership. That's our corporate strategy, right. And it is a very easy... you know, solution that XION right now, in its current infancy right, it is uh you know, it is looking to provide access to all right. And so we have like 100 projects in our ecosystem uh. Just ran a last testnet with 450,000 wallets or accounts. And um like four million transactions um you know. And so we're definitely kind of on our way and, and kind of continuously iterating on this process. But a lot of it doesn't stop at the infra layer. Um you know, I think there's definitely a part of it that's of course physical infra, but then a lot of it's really mental right. Like it's, it's the knowledge barriers, it's the, the, the kind of um ideas people have about crypto. The, the negative connotations about it. And just saying, "hey, imagine if you were using um uh eBay and you're like 'oh fuck, I didn't even know this was crypto.'" That's what we want. We want that "oh fuck" moment. Yeah, "you know why you can't use credit card is, you know I'm not gonna buy this weird token. What does this mean? I'm not buying this. Oh, it went to zero. Oh cool, okay." Like that's not the future.
Jake Aaron Villarreal: Yeah, so you talked about 450,000 digital wallets. Uh you also talked about infra, which is infrastructure. Um is the tooling and the infrastructure you're providing for developers to use as they're actually building their tools or their applications for their user base? So that when their customers are using it, it's an automatic great user experience and by the way the tooling and the infrastructure underneath that, which they don't know, is your infrastructure, correct?
Burnt Banksy: Got it, okay.
Jake Aaron Villarreal: Great. And talk about when you started the company and the massive pivot that you made to where you're at today. Cuz every single company we've talked to... we're on episode 145 right now... every founder that started with the thesis that maybe went through Y Combinator or Techstars, or just bootstrapped and kind of scaled. They started with an idea, it evolved (micro pivots if you want to call them, and there's major ones). What was one that you could look back and say, "If I would have started this company again, I would have done this differently, or I started with this idea and we started building and we figured out wasn't going to scale or that wasn't going to work. And now this is what we're building." What... walk us through that so others can learn from your experience.
Burnt Banksy: Yeah, you know, and I, I think I had touched on it a little bit, but you know when I referred to like my product back then, right two years ago, you know, we had a decentralized marketplace and we built a lot of early standards on another blockchain called Solana. Um and you know we had like 30,000 monthly active users. We did... like, for crypto's insane. Sorry, that might not be a lot for web2, that was a lot. Um, it's like, there's like 30,000 users in total in crypto. But um, especially in like 2021, um you know. So you know, and it was a good... I mean I liked it right. Um you know, and, and you know the vision was always the same for that right. Which was like, the reason we did that was, we started off with that, was because the Banksy burning was... when we did the Banksy art piece, it was, it was a miserable experience to do NFTs. It was terrible. Um we didn't, and I'm very highly technical, didn't know how to do it. Um we had to help get help, which should say something. Um you know, and then even so right, like with the promise of, with the promise of like providing access to all, we wanted to make everything like a... we built a no-code product for NFTs uh, did the whole marketplace, wanted everything you know done that way. Um but we looked at this and we looked at like you know, and I had said it before about like the "wow no one's going to use this thing." But you know, even sitting on this product with like 30,000 monthly active users, it was that conundrum of a crypto product which is "I can either continue working on this shitty product that won't be anything, right. It'll get the crypto crowd, sure. But that's it, right. Like it's not, we can't... we're capped right now. Like we are genuinely capped because for every user we want to bring in, will take days and we have to physically handhold them through the entire process. And it's, it's not scalable."
Jake Aaron Villarreal: That's wild. So then you look at...
Burnt Banksy: Yeah right. And so then you look at what we had to do, and it was you know you say "build for yourself" sometimes, right? And you know, at the end of the day that's exactly what we did. Is we, we built the environment that we needed at the time to kind of uncap ourselves. Um you know as I mentioned, there's like a 95% falloff rate when it comes to people who are prompted with a wallet for crypto. Um and like especially when we were trying to build consumer applications, like we were working with a DJ named Afrojack who's pretty famous. And like the Venn diagram of people who knew what Afrojack was, and also were like completely onboarded into crypto and had like the, did the bridging, did the KYC, did all of this... it was like "Why are we even doing this? Like why are we working so hard on these great partnerships when we are genuinely capped by the technology that we're working on?" And so XION was born.
Jake Aaron Villarreal: Yeah that's great, I like that. Uh you know, there's so many different directions you can take a company. Um I think it starts with trying to understand the problem you're trying to solve and who you're giving it to that's really providing a value. Um you know for me, looking at crypto (and I know you're not focused only in crypto, it's much more than that), but you know, there is this trust issue of "am I, are my funds actually going to be there when I go back to them?" Um it's, everything's decentralized, so who, who really is on the hook? Who can I go to that's really going to be able to stand up and say "okay, here's the process, here's how you get things back?" Or maybe it is what you said, "It's just it is what it is and you know, things happen and you got to figure out how to just kind of suck it up and keep moving forward." But I, I really like the fact, fact that there is a business model that is actually solving a problem in that space. What's the, what's the... how do you make money? Like for a lot of our customers it's...
Burnt Banksy: You know there I'm going through a tunnel... no I'm just kidding.
Jake Aaron Villarreal: You know, there's uh, there's many different ways and feel free to share, feel free not to share. But um at the end of the day, you know look, you raised capital obviously. Investors know there is a path to uh executing and, and building something big, of course.
Burnt Banksy: Yeah, no absolutely, it's a very, obviously a great question. Um the revenue kind of comes in actions that are taken. Um you know whether that be small percentage of every monetary transaction or uh you know if you're familiar with the term "gas fees" uh on crypto. Effectively we, we abstract it, so a user would never see the concept of a gas fee. But you know, if I paid you a dollar, you know, or, or you know, let's say there was like a processing fee on eBay right, like I paid you a dollar five and then you know I know two of those cents went to Amex and then three of those cents went to uh... you know it's a lot, lot low- it's like 0.003 cents, but went to kind of what you would consider revenue. It gets a lot more complicated when you talk about a crypto project because of decentralization and kind of uh you need to secure the network and you need to you know... you're not really vying for an IPO right. Like we're not trying to be in the, the NASDAQ um you know or the there right. And so we're trying to build decentralized networks.
And so I think a lot of conversations around like corporate governance and structure, unfortunately it's really hard to answer with those concepts in mind. And you know, I won't... we, we'd be here for another hour if I tried to kind of talk about how the, the inner dynamics of decentralized organizations worked. But yeah, for like the easiest way to imagine it would just be like taking a small bit, like a, like a super minuscule amount of every kind of transaction that, that kind of occurs. Um and yeah, I'll stop it there because it can get confusing.
Jake Aaron Villarreal: Yeah, I no... and you know look, in financial services or any company that has transactions go through, that's pretty standard. You know you take a cut of the transaction and you provide a big huge mass of value to why they use your platform or your service, your tools. So that's to be expected. Um you just don't always know how it works and for the most part it doesn't really matter to the user as long as they're getting a value out of a system or a platform. So just curious to understand, when you take funds from a company that's investing in you, like they want to know what the plan looks like.
Burnt Banksy: And 100%, I know they do.
Jake Aaron Villarreal: Uh we don't have to go in all the details here, but good to kind of hear kind of the, the thinking behind it. Um you know you have a lot of followers uh on social platforms, you know not just a few. Hundreds of thousands. 170,000 on this platform you know, 180,000 on that platform. You, you're really building a community and a lot of buy-in to what you're, what you're creating, working on. For those that want to actually try and create communities or build um that engagement, what's worked for you? Because um it seems like you've done an amazing job there.
Burnt Banksy: Thank you, thank you. What worked, it's, so it's funny, it is a little different in crypto because our borders are so global. It is so easy to reach everybody in crypto. Like when I say everybody, I mean everybody is that not in America, right? Like um you know, we really don't even market to Americans. Um actually legally we don't actually market to Americans right. And so you know, but globally it's, it's, people, people are really excited about crypto. And you know, once you get out of America it is you know, the hardest thing in the world to really get is as an American bank account, right? And people are really excited about the infrastructure in crypto as a whole. And I, I think a lot of crypto follows crypto, and I think we're obviously very early.
But on a more specific basis for people to look like, looking to build their, their communities and their audiences, is: you're not above anyone. Like, and I think that's such an important aspect to all of us, is just understand that they're, you're building a community. They're, they're supporting you, you're not in this ivory tower. You know, I'm still in the Discord every day. I'm still like talking to people every day. You know, most of the reason we built and like decisions we made... there's been times where I've been arguing with my team about something and we just threw the question in the Discord and we're like, "Guys, what do you think?" And we have like 180,000 people in the Discord right. And it was decided, like it was a huge argument in the Discord right. But it was really cool to have something like that because you have this, you know, you're not better than them. Like I'm sorry, like maybe you think that way, but at the end of the day they're keeping your project alive. They, they're going to be the ones who are using it. They're your you know users, customers right. Like no one wants to build a product that doesn't have any users, right. And then no one wants to be a user of anything that doesn't have any products, right.
Um and so we've been curating this kind of you know... and I love our community to absolute death. Um you know, and, and I think that's the problem is you also just need to enjoy it. Um because um you know as I kind of mentioned, they're part of the co-op right. They're going to be part of the co-op, and it's always going to be the people... you know, this is I think one of the beauties of crypto is number one, it's completely global, and number two, it's you know, everyone's going to have this like aligned incentive right. Like everyone's, people who want to see the project succeed are the people who are using the project, and the people who uh benefit from the project's success right. Like I'm not following, they're not following us because we're making memes or something like that, or they want to you know I don't know, they want to read something that we wrote. Maybe they do, but a lot of it is like, is just the nature of crypto and the nature of aligned incentives. And the nature of helping projects like this. Um it's really amazing that I don't think you actually ever see.
Jake Aaron Villarreal: Well it's really cool to hear that. I mean it's also helps you build your product too, right? You can get answers to the questions you're trying to, to create. You, you don't always know what your customers want until you ask them. And if you have that community you can get immediate feedback and then build what someone... We had a, a guest on a couple days ago you know, PhD at MIT and Harvard. And he was you know uh astrophysicist and was building space suits. Great, I can't wait to come after that podcast, for the lunar, for, for, for lunar walkie. You know and you know his, his question was, I asked you know "what did you do at NASA that changed you know, you know how they were building space suits?" And his response was "I just went to the, the astronauts that were going to be walking around and bending over and grabbing tools and said 'tell me what you want to be doing when you're walking on the moon and then we're going to build the suit around you.' Not 'build a suit and hope you fit into it' and then you can't bend over and you can't do the things you need to do to do your job." So to have that community I think is incredible and, and to keep it up and to keep it growing is you know, nothing but great things come out of it. Let's talk a little bit about a concept that you define or is defined as generalized abstraction. What does that mean?
Burnt Banksy: This way we're going to get technical just want to let you know. But it's, it's a, it's, it's an industry term right. Like it's, it's a way that we describe ourselves to the industry. Um which effectively is like, I could talk to you and I could say "hey we want to make a web2 experience," right. But when I talk to someone, like when I talk to someone like you know one of, some of my friends in the industry they're like "what the fuck does that mean?" right. And I'm like "well... " so we use the term generalized abstraction. And we can kind of split this off um you know, we can kind of split this off as um you know into different sects. And you can read this on our white papers. We do actually break these off into different sects. But we kind of very specifically tackle a lot of different points whether that be like uh... I almost got really technical there... um whether it be like being sign, signature agnostic. Like doesn't matter what signing schema you're using or cryptography method you're using, we can kind of support it. Um kind of concept of wallets as I mentioned right, it's just, it's, it's more, it's definitely more for the crypto native that, that kind of term. Which is you know, it's, I find it a lot easier to kind of talk to this community of like web2 who's like "hey I'm mimicking that," right. It's like "oh well that makes sense," but the amount of work it genuinely takes to do that is uh, stellar to say the least, otherwise it would have been done, right.
Uh you know, and so when we talk about generalized abstraction and kind of how we fit into the modular crypto stack, it is um you know it is a very crypto-specific term of being a part of the you know kind of being above execution environments and being able to kind of settle on you know, be symbiotic with every chain. And then also being able to provide the benefits that we provide.
Jake Aaron Villarreal: Got it, cool. For all the developers out there that [are] bu- building in crypto, hopefully you understand what that is and hopefully you apply it or more importantly I reach out, reach out to Burnt and download the white paper by the way. Um you know uh let's uh let's look at the business as, as you kind of look forward, how big of a market do you see with your infrastructure, with your tooling that's going to be used by you know developers, by, by companies in this space?
Burnt Banksy: Limitless. I mean how big can the internet get? Huge. The answer to that question, question.
Jake Aaron Villarreal: Yeah I mean I can't, I can't give you an answer. I wish, yeah I wish I could put a number on the max. But uh I don't think there was, I mean I don't think I can, I don't think there's a max.
Burnt Banksy: Yeah, so if you think about for example just take one concept of smart contracts. Um being able to do a transaction online um, decentralized, auditable, kind of that use case with your infrastructure or your tools that could be on the back end of essentially any of that. Is that correct?
Jake Aaron Villarreal: Yeah so that's huge. Because I think that's where the work with prior solutions too.
Burnt Banksy: Yeah, that's great. Okay. Us too.
Jake Aaron Villarreal: Yeah, I hear you. Um let's uh let's switch gears here. Um as you look into 2024, um what are you excited about, about your company? What's uh what's on the road map if you can share, what's, what's coming down the pipe that you're really, really can't get, can't get enough sleep for? Um what's sharable?
Burnt Banksy: What's sharable? I think it's a, it's, it's where we are of like as a company right. I think we're just about to kind of have our you know big mainnet launch. And be able for all the, the money that we've kind of been operating with, to kind of function in real use cases. And you know, I think what I'm excited about, and I know 2024 will be this year is, and it's hard to explain, but you can feel this inflection point at least in XION right. Which is you know something that like "hey some of these things we've tested in, in a crypto native environment. Some of these things we you know, we haven't," right. Or like, like some of these things that we, we, we, we did in the crypto non-environment right, but like "fuck it, I could do like a QR code around New York and you know have people, have people who scan it, they enter their email, they create a you know create an account with the, with the product on the, on the chain. But then we can then like give something to those people who participate in the campaign," right?
And it's like immediately we've gotten rid of all the friction. Like you would have never been able to do that before, you are able to you know... I mean you saw some of these fun headlines of like "Starbucks paid $40 million to deploy on like Polygon for a loyalty application." That just didn't happen right? And there's a reason it didn't happen, is because people who use their Starbucks cards are like, they're not going to go to fucking Polygon. They're not going to buy Polygon. Like whoever, most people don't know what Polygon is you know. And so it's, it's we're out of that expectation I think this year that you need to know crypto. And I can feel that with the product and I can feel that with the energy that kind of happens plus. So like I would say the exciting things is then what we can do with that and how quickly we can, we can scale.
Jake Aaron Villarreal: That's great, yeah thanks for sharing that. We're going to go into uh, we're going to totally switch gears now. This is going to be more personal about you. So three questions, three simple answers. You've created a great concept and idea and you're bringing it to market. Where do you go to think big or to brainstorm personally?
Burnt Banksy: Personally to brainstorm. Uh I have this room, it's just we call it the podcast room. I obviously uh well clearly don't utilize it for podcasting. Um but it's like it's effectively like the, the sleeping room like at the company. Where it's like I'm looking at it now but it's, it's just a couch. And most of the time I'm sleeping there but or like napping there. I have a good per- good, good work life balance I swear. Um but it's, I don't know, it's just dark, there's a curtain, it's like blackout blinds, blackout everything. It's like a blackout room. Um and I leave my phone, I leave my computer here. And there's just times where I'll just, just sit, and I love that. Like it sounds a lot more depressing the more that I say it out loud, but I swear that it's, it's like it's more like I go, I would say I more meditate than anything. Like I, I don't think that it's like, it's definitely not like "oh brainstorming time, how do I solve this issue." Like that's constantly, that's a constant effort. But if, if I ever just like I know I like, I never go there to solve a singular problem. I always [go] there um just to, just to clear, just to clear the head. And then, then once you have a clear head then the solutions come.
Jake Aaron Villarreal: Yeah, that's great. I love that. Um where do you go when on this roller coaster of building a startup where you have to stay positive... like what do you do to do that to keep the perspective as you're going through the ups and downs of a company as the leader, what works for you?
Burnt Banksy: Um what works for me, I don't, I mean it's, it's uh, how do I stay positive? I don't. I think like, I don't think you need to stay positive, right? Like it's okay to not. I think that's maybe my answer to that is, is it's okay to not. Like don't force it. Like there will be good times, and the good is good and the bad is bad. And that's okay. And understanding where you are, and understanding that with good there will be bad, with bad there will be good. I don't think you need to be happy all the time, I don't think you need to be sad all the time. I think um you know, I, I, I think that there's a lot of pressure to smile and pretend everything's alright. And a lot of the times it's okay to not like it, to say "it's not okay." Like to sit there and say, "I have no idea what I'm doing, I have no idea where we're going, I don't know." And you have people who are listening to you right? And, and you know people will be there, people won't be there. But you know I really think at the end of the day it's, it's um you know it's about kind of keeping that mentality and keeping this kind of realism right.
Jake Aaron Villarreal: Yeah, I like that.
Burnt Banksy: Especially in crypto when it's just like terrible. It's like "oh the industry is down, oh the, the, the biggest exchanges collapsed and these guys, these guys rugged, oh well okay another exchange collapsed and interest rates are going up" and it's just like you know, it's like I don't know. I always compare it and like sometimes you just die by dumb luck, right. Like I've known people who just had money in FTX, had a treasury in FTX, FTX went down, company didn't exist anymore. So there's a certain point especially in crypto you get used to the punches right. And as a founder you just, you just got to take the punches, it's okay. You can be, you can bruise, it's fine. But get back up right? Or don't, and it's okay. Like you don't have to always get back up like I... that's important.
Jake Aaron Villarreal: Well get back up on the same horse. I love that. I mean you know, it's about being honest with yourself too. And yeah, it's nobody's going to stay positive all the time. Um some people have different ways of doing it but you know I think the truth always comes out and should come out and you know, be who you are and, and but yeah, get up, because you get up. You know, you are the one that decides the future of your company. If you decide to close it, you know nothing's going to make it work unless you want to make it work. So that's great. What's something you've learned from another...
Burnt Banksy: I was just going to say, this might answer your next question, but it was like one of the main things that struck me especially in that kind of conversation is it's you know, uh company never really dies because it runs out of money. The, the founder just runs out of energy right. You can have all the money in the world, and the founder has no energy and you're not going anywhere.
Jake Aaron Villarreal: Yeah absolutely. I've seen that happen more times than I want to share. But absolutely it's the leader, comes down to you. The mentality and your desire and your passion, or you know you burnt out um, you got to find a way. And the mo- and, and I think it's Y Combinator that says even if that means taking like a, a break, like take the break, but get back 100%.
Burnt Banksy: Yeah.
Jake Aaron Villarreal: I think it's Y Combinator that said something like, "all you got to do is just continue to get up to survive. And if you survive you can win. Just keep going and you'll figure it out." Um for you uh, have you gotten any advice from other founders in the crypto space and, and different space, other founders that are building companies that you look back on you think "you know that's something that I want to share with other founders that was helpful for you or that was priceless you can share?"
Burnt Banksy: Um, don't worry about failing. I, I mean I kind of... it's from another founder but I, I've, I've tweaked it a little because now I say it a lot. Which is um you know "it's better to fail spectacularly than succeed quietly." Right? Don't be afraid to fail. I fucking hate that though, I hate the saying "don't be afraid to fail" so much. I just, in a different context of like "swing for the fences," like that's the, that's the idea is, is "don't... " I hate this like, this failure fetish I think it's fucking stupid. "Oh you didn't fail you just look like..." Shut the fuck up! Like I hate that so much. But, but like, swing for the fences no matter what. Like don't be afraid, don't fail, like don't... It's not that "don't be afraid to fail," just don't fucking fail! You won't like, I promise you people who ever think you're going to do something and you fail, you're not like... you'll figure it out, everything works out in the end. Like unless something happens. But you know I hate this failure fetish, I hate that so much. And so when I hear like, it's a little side note there. But you know aim for the fucking fences. Like always, always get, try for the home run even if it's not guaranteed. Like who cares? At fucking, like at all?
Jake Aaron Villarreal: Yeah out, I love that. Shoot for the moon, hit the fence post. But at least you shot for you know the moon. So as... yeah there you go. As we wrap up here um you know Burnt, I just want to thank you first and foremost for coming on and sharing your story. Uh to me it's one of the more intriguing stories about what you're building, and where it's going to go. Because it sounds and feels like the future, which I can't wait to, to hear how this year goes and have you back on. Um and so for others that want to learn more about you or learn more about Burnt or XION, where, where can they find you or where can they find your company?
Burnt Banksy: Yeah, definitely probably Twitter's the easiest. Sorry, X. Um uh @burnt_xion. Um but otherwise check out burnt.com, xion.burnt.com. Uh definitely read the white paper for those of you who are curious. Uh we also have a blog and documentation that's pretty, pretty solid uh for those who don't want to make it through the entire sludge of the white paper, which I totally understand. Um but yeah definitely um you know I would say Twitter is probably the best spot, we're very active on kind of announcing there. Uh Discord if you actually want to chat. We also have Telegram announcement channel. Um but you know, or honestly what you're going to be able to do is you're just going to be able to read the news and you'll also see us there. So...
Jake Aaron Villarreal: I love that, very cool. Well thanks for joining, and thanks for all the listeners for listening. Uh it means world to me that you spent your time with us here today. My name is Jake Aaron Villarreal, I'm the host of the show. Can't wait to connect with you all in the next episode. Until then, take care.
Before we wrap up, I want to give a big shout out to all the entrepreneurs that have joined to make this podcast possible. And for all the listeners for listening, it means the world to me that you chose to spend your time with us today. I'm your host Jake Aaron Villarreal signing off for now. We can't wait to connect with you all soon on the next episode. Take care.
This show is sponsored by Match Relevant, a company that helps venture-backed startups find the best people in the market. And they do it in three simple steps. First, they sit down with founders to understand their story. Second, they tell their story into multiple candidate channels. And third, they schedule interviews within 48 hours. Find us at matchrelevant.com to learn more about how we do it.
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