Zima Red ep 50: Ben Lakoff

Defi NFTs with Charged Particles

Primer: In this episode, Ben Lakoff shares about Charged Particles, a protocol that allows users to turn any NFT into a wallet that contains interest-bearing tokens. Learn how Charged Particles could be extended to accommodate more interesting use cases.

Who is Ben Lakoff?

• Finance background as a chartered financial analyst turned entrepreneur

• Got into crypto in 2017 via angel investing in a Thai crypto exchange

• Started angel investing due to Tim Ferriss's publication called the real world MBA

  • Instead of taking a 200k loan for an MBA, take this amount and break it up into little chunks, do a lot of angel investing instead to gain real-world practical experience and networking

  • The tuition fee for an MBA is a sunk cost but angel investing have the potential to go up in value

• Agrees that spending time overseas and going into crypto early is linked

  • Spent 9 out of 11 years living outside the US, going over 80 countries

  • Allows him to see beyond the financial inclusivity of the US financial system where it is generally regulated

  • No danger of the government confiscating assets, and everyone takes credit card payments

  • Crypto is an option to opt-out of a country's financial system

• Holds a podcast called Alt Asset Allocation, talking about alternative assets outside the traditional financial world

  • Uses it as a tool to learn more by interviewing and asking questions with the rock stars in the space

About NFT and digital collectibles

• First heard of NFT with crypto kitties - thought it is another speculative play

  • Didn't understand it, took a while to come around to it

• Digital art is the gateway to understanding the value of NFTs

  • The jump from analyzing equities with cash flow to digital collectibles is a tough one for him

  • With NFT, you can see the address of who created it, who owned it, who bid for it and transferred it, so allows this perfect provenance for that piece of digital art that is important in the traditional world too

"You know, I never was exposed to this from a younger age, via working in finance or even, you know, my parents, never bought a $50,000 piece of art and hung it on the wall and said, you know, look at this, this is beautiful, but it's also an investment and we hope to sell it for more and you know, it will hold its value."

- Ben Lakoff

What is Charged Particles about?

• Charged Particles is created by Rob Secord in late 2019, came up with proof of concept in early 2020

• Ben joined him in mid-2020 to flesh it out

"So it provides the ability, it provides users the ability to turn their NFT, any NFT, into a basket that can hold other assets. So that's kind of the high level overview of what it does."

- Ben Lakoff

• Is a protocol that enables you to turn any NFT into a wallet that can hold other ERC tokens

  • E.g. you can deposit 100 DAI into Aave, swap it for aDAI, which is an interest bearing DAI, and it earns say 10% per year.

  • The interest is programmable - you can discharge the interest earned to another address, which could be to artists, royalties, charities

  • The new token mechanic allows for fun innovative stuff in the space utilizing NFT

• Currently, only works with NFT minted using Charged Particles platform due to security

• The goal is to be completely NFT agnostic so they will have integrations with other platforms

• Started fundraising but are selective about the type of investors in this early round - a few confirmed investors from Singapore, US and key angel investors that people have heard before

"But we quickly realized that the type of investors that were reaching out to us was not the type of investors that we wanted in this early round. Not all capitals are created equally at this point."

- Ben Lakoff

Interesting use cases for Charged Particles protocol in NFT

1. NFT tickets for events

• Event organizers want attendees to buy tickets early

• When attendees buy tickets, it is represented by an NFT with the purchasing value of the ticket invested to earn a yield

• When the event comes, the ticket value will be worth a little more from the interest.

• Organizers will be happy they have sold tickets early and early buyers would have earned a little from the interest

2. NFT in-game items

• Can help eliminate pay-to-play mechanics where you can buy an expensive powerful sword to be very powerful in the game

• Charged particle protocols allow users to buy a normal sword, deposit an asset into it that's earning interest and that accrued interest can represent the value or strength of the sword in the game

  • Can add in fun dynamics, like battling with the sword and the interest is discharged to the winner of the battle in the game

3. NFT as a wallet with a time lock and programmable interest

• Once you have interest-bearing assets in it, can program it to give artists royalty in perpetuity, or to charity

• Other people can deposit into your NFT wallet too, so can do Patreon style donations

• Can put a time lock on the principle held until your kids are 18 years old

  • Then discharges the principle to their wallets as an inheritance tool

  • Can also configure it such that the owner has to destroy the NFT to pull out the principle

4. To prevent flippers in NFT markets

• We want long term holders, not flippers

• Can create a system where you have to hold the NFT for a period of time to receive the interest

  • Selling before that time period is up will cause the interest to go to other wallets

5. Virtual Geocaching

• To look for hidden NFT with accruing interest in the metaverse/virtual worlds

• Accrued interest will be discharged to the person who finds it

Last words

• 5-year vision is for Charged Particles protocol to be NFT agnostic and token agnostic

"So ideally, the first thing that people ask when they see or interact with an NFT is: Does it have a charge? Does it contain other tokens and this would be enabled by Charged Particles protocol?"

- Ben Lakoff

• Any favourite NFT?

  • Don't really have one

  • But Bruce the goose, an NFT creator, has a couple of good ones on the platform

  • Bought a few mainly to test the UI of the different platforms, took a while to have a collector's mindset

• What needs to happen to the NFT ecosystem?

  • Well known games coming in to integrate NFT into their game items and across multiple games

  • Needs more regulatory clarity, especially with regards to IP, trademarks, copyrights issues

• What will happen to the NFT world in 3 years?

  • More adoption of art, especially in digital format

  • More digitalization of art

  • More game items are represented by NFT in well-known games

All information presented above is for educational purposes only and should not be taken as investment advice. Summaries are prepared by The Reading Ape. While reasonable efforts are made to provide accurate content, any errors in interpreting and summarizing the source material are ours alone. We disclaim any liability associated with the use of our content.