Asset Trip with Ashley Caines: Are Social DAOs and Experiential NFTs the Future of Web 3.0?

That sounds delightful.

You would breed these cats or these crypto kitties, you would pay for them with Ethereum—gas was as outrageous as it is now—and you would try to breed a rare cat and then you sell it off so that it can breed with someone else's rare cat so they can make a new generation. As the cat got older, it increased in its value, so new breeders wanted to breed with it. And that's kind of how you made your money. It was breeding these cats and then selling them off, and they were assets, but it was a game, and I was way too far down that world.

I did that, and I learned how to day trade. I swing traded. That's primarily what I do now is swing trading. And holding; of course, I did not hold my Bitcoin. I should have, but I like swing trading too much. So on the side, I'd also always work with people who own businesses. I'd take on these roles as sort of a chief of staff or an executive assistant, and I like to learn from sitting behind people. Long story short, I got to Blavity about a year and a half ago, and crypto, Web 3.0, was very much on the mind of the owners, so right place, right time. They're like, "Hey, you already have all of this information. It's yours, go run with it, lead us." And that's how I got here.

Do you see some of these newer assets in Web 3.0, whether it's NFTs or land in the metaverse, as real investments or more of an interest or hobby?

Well, right now I'm most bullish as an investment asset in social tokens. So the tokens are linked to DAOs. I'll take a step back and say: DAOs that I am personally involved in, because I'm directly making a bet on my own energy and on my own self and on this collective of people that I'm working with day in and day out to make it more valuable to everyone involved the next day. So while we're definitely not in it for money...a lot of these social tokens, we see Friends With Benefits, that's one of the biggest DAOs right now. They launched at $5 a coin to get into their club and at some point went up to like $200 a coin.

I mean, a lot of these coins are outperforming traditional cryptocurrencies. I think the use case is a lot clearer. Back in my day, four or five years ago, we were reading white papers to figure out what these coins were about. No one's reading white papers anymore. They just read the trade history. But it's the closest thing to being back to a white paper where you really understand what the coin is supposed to be doing. So, in terms of financial instruments, that's what I believe in most.

That said, [as a real investment] NFTs. I definitely don't buy NFTs for a warm, fuzzy feeling. I'm not that girl. I'm not like, you know, "I really believe in the artist." It's wonderful when there's an intersection of artists that I very much believe in, but I believe in a capitalistic mindset where I know that person's gonna hustle so that what I pay $800 for today will be $8,000 ten years from now. It's still very much an investment vehicle. And traditional cryptocurrency: at this point that's just for fun. I have to think about it that way because we're in a bear market.

How do you evaluate these various assets, whether it's NFTs or social tokens? You mentioned utility is really important. You also look at the creators and what their motivation and work ethic is like. Is there anything else you look at?

My system of evaluation is built around my intention for what it is that I'm purchasing, across the spectrum. So I think that if my intention for NFTs is to get a financial return in the short term, I try to white list. That really is the short-term play. If you get in for 0.0 ETH and you sell it three days later at a public sale for 0.1 ETH, that's kind of the short-term play if your heart's really not in it but you're in it for money. If I'm gonna hold it longer, I typically follow the artist first for a couple of weeks first just to see the momentum behind the community, what's their prominent platform. Are they tweeters? Do they speak? Are they Instagram people and they have other work or do they show their process? And then I see people engaging in the comments. What's the community saying? Are the people in the comments predominantly holders or are they people who are evaluating to maybe one day buy? So for NFTs, there's a number of things.

Also I must say just to be transparent, I'm very well placed in that I'm fortunate to know people who know people and am privy to great projects. And I've been in this space long enough that a friend asked me a couple of weeks ago, do people just have ETH lying around? What are these prices? And I'm like, kinda. Some people really do. I've been in this space long enough to have some money to play with a little bit. I think it's harder to evaluate, for me, the newer, smaller projects. If you're trying to get in for under a hundred dollars, I wouldn't know where to send people necessarily or how to vet those projects. But for the larger ones, if I see other investors that I trust having bought in, and I trust their vetting process, then I definitely will jump on that bandwagon.

For DAOs, like I said, my investment in them is my time first. I don't typically buy into a DAO that I don't plan to join or be involved in in any sense. So that's how I determine whether or not they get my money—if I believe in the community of people that's already there. For coins, I actually have a very specific strategy with the coins. I look for coins that retrace their value multiple times in a year. So say, for instance, a coin is 5 cents. How many times has it gone to 10 cents? Or if it's 10 cents, how many times does it go to 20 cents, back down, and then back up again? So I'm looking for very specific entry points so that I know I can 3X on this in this amount of time, because it does this every year and almost seasonally.

I know some people are starting to see DAOs as a way to make money on the side, but at the same time, and I think you've talked about too, that's not always necessarily the spirit or ethos of DAOs. And sometimes that financial motivation can be at odds with the other goals of DAOs. Could you speak to that a little?

So this is like an age old question, a new age old question, for DAOs. Because on the one hand, yes, you do want to incentivize people to participate in a number of ways, not necessarily just monetarily. You want them to be a part of the community for a lot of reasons, but there's also this [concept of] if you participate a lot and you help us write this document or something like that, then we will give you some tokens. Here's five tokens, thanks so much. So there are two schools of thought. Should people be able to drop their 9 to 5s and just pick up all of these incentives within their DAO and be able to make nearly a full living off of these tokens that they're given in return for their time? Or should the ethos around DAOs remain around self-motivation?

I'm of the camp that you definitely should be able to quit your 9 to 5 and make money. I think your 9 to 5 is pay-to-play, essentially. I mean, you're negotiating that deal a little differently on the front end. But it's really not that different. I think that ultimately the quality of life, if people were getting paid to go outside and play with their friends or go outside to do these things that they already enjoy and are earning a living doing it, I think just in general, the state of the world would be better and people's happiness and mental health would be better. So I think as long as it's something that you are already enjoying doing, and you're being compensated for it, there's nothing wrong with that. When you start to compensate people for participation in the chat, for example, it's obvious the level of participation will start to decline as people are just looking for a token because they said something. But if it's very clear where the pay is coming from, and what the contributions are that are really the most valuable to the community, then I believe that, you know, pay up.

Speaking to some of those growing pains as DAOs grow and more people get involved, what do you see as the biggest challenges most of them are facing right now?

Someone tweeted this, so I have to say up front that this wasn't my thought. But as soon as I read it, I was like, yes. This. The biggest challenge that person saw, that I agree with, is that if you're coming at it for money, it's actually more lucrative to own X amount of a treasury than it is to go the pay for play model and actually contribute to a DAO that has already been made. And I mean, it's true just in capitalism in general. I'll go start my own company, and then I'll have a higher piece of the pie sort of thing. But as the pay incentives increase and more people come into this space almost purely for the pay and incentives, they're gonna do the math and realize that owning the treasury, even getting a hundred new people to join your thing will make you richer than contributing to this other thing that we're building. And it's completely against the ethos of community, and this is not about money, and all those things. But I definitely see that as a big problem.

Do you see DAOs doing anything to kind of combat that dilemma? Any creative solutions?

I mean, there's definitely the clout factor, right? Where just being associated with something that's already been built is enough of a deterrent, or at least you'd wanna have one foot in one and one foot in the other, so you're still associated with the cool thing while you're building your own thing on the side. But as DAOs get more powerful, I think that while the tokenomics is in favor of you starting your own thing, there are other social benefits to still being associated with what has already been created.

With the DAOs that are more straightforwardly just financially motivated, like real estate DAOs or the constitution DAO where people pooled their money and attempted to purchase the constitution, a lot of these vehicles are giving people access to assets that normally only the ultra-wealthy would have access to. From your experience, do you see these as tools that can really help people build wealth with very little or gain access to building generational wealth?

I think if future generations are built on community, it's giving everyone generational wealth. I think that if we think about generational wealth as like my single lineage, which is how we traditionally think about it, no. Because you're buying into community assets. So you have to take the entire ethos of Web 3.0 as community-based. And if you think about it that way, and you think about the future that way, and you sort of reverse engineer the future of your own lineage as being intertwined with the future of other people's lineages, you are absolutely building generational wealth by being a part of these DAOs that are largely financial instruments. I mean, you brought Constitution DAO, which is incredible. ApeDAO is also, I don't know if you're familiar with their use case scenario that's going on...

They own a couple of the Bored Ape Yacht Club NFTs, which in case your readers don't know are like the blue-chip NFT right now, like upwards of a quarter-million dollars to get in at this point. So they own a couple of those, and the price of the actual NFTs is increasing, but the value of the token attached to the DAO is not increasing at the same rate as the artwork. So the value of what they're holding is increasing but none of that value is actually being trickled down to the voting numbers of the DAO until very recently. They did a public vote, which is a large part of DAOs, that's how we keep them decentralized. We vote on blockchain. So a number of people, I believe it was the majority, voted to liquidate and to actually sell off some of these NFTs so that members can start seeing the money.

It was a very big deal, obviously. Because it's the concept of like, where's this money right now? There's a disconnect between the asset itself, I should say, and the token that we're actually bought into, right? Because these people are realizing that they're not actually bought into the NFT, they're bought into the entity that owns the NFT, and the entity that owns the NFT is getting richer, but there's a translation problem with what they're holding in their hands. And so I think that will potentially start to be an issue for these real estate DAOs and for these other financial instrument DAOs where like, yeah, the real estate, the building might quadruple in worth in the next five years or something, if it's in a hot market. But what will the coin do? Because the coin is actually what you're holding.

I think for a lot of people getting involved in DAOs and NFTs as financial assets, there's a huge risk there, and the potential reward is still unclear. Even if these things are here to stay, the future of them is a pretty blank slate—we have no idea what the landscape will look like even a year from now. How do you think about that on a personal level when you get involved in these things?

I know a term that circles around this atmosphere is the metaverse. I actually am not that bullish on the metaverse. I hope for a future of real life experiences with my friends and family and the people that I love. So that's the way that I think about the future of these technologies and the future of what the blockchain can give us...I'm very, very bullish on experiential NFTs. And they're pretty nascent at this point, not the technology behind them, but just like the popularity of people knowing what they're for. That's why I started out by saying, I minted our first NFT ticket to our conference. I'm very excited about that. But my favorite example to give of an experiential NFT is, say LeBron James was to mint an NFT of access to all of his Saturday morning practices.

You might go for three years and then your schedule changes, you're not free on Saturday mornings anymore. You sell it off. And then that person uses it for two years and then they sell it off. But you know what it is that you're buying. It's not based on the popularity of the artist or whether we'll be into JPEG monkeys a couple of years from now. It's literally access to an experience. Coachella is all over this. They just auctioned lifetime access through an NFT. Genius for them to auction it and not give a fixed price. And I think that really is the future of NFTs, where there's less guesswork about what it's going to be worth to you years from now.

I'm curious, do you happen to remember what your first purchase or investment within Web 3.0 was?

I know what it was supposed to be. It was a project that never came out. It was called Cream coin and it was by a rapper. That actually was my entry point, I saw that this rapper was launching his own cryptocurrency, and I was interested. So I did more research to find out how I could buy it. It was in ETH, it was on the Ethereum blockchain. So I needed to buy some ETH to be able to buy it. And so I got all set up. I got GDAX, which is not a thing anymore, but at the time it was GDAX, it's Coinbase Pro now. I got some, and I was ready, and the project never came out. So it happened that my first currency was Ethereum.

Can you name what you see as the best and worst investments you've made so far in Web 3.0?

Probably my worst investment—I won't name it cause I don't want the project to feel bad; I'm still holding it—but I bought it with the intention of it being...get on a white list, get out on public sale day. And the community just wasn't strong enough for it. And there were so many available on public sale day that it just didn't work. So that's a cautionary tale just for that strategy, by the way. Now I'm sort of holding this NFT that I paid hundreds of dollars for that will probably never give me its return. But that's okay to learn the lesson that way.

The best trade I ever made...it's a lesson to trust your instincts actually. I really wanted to get into DOGE last year when it was running and it was a big story, and it was like very DOGE to a dollar before Elon Musk made it weird. I just kind of sat and sat and eventually when it got to four cents, I'm like, Ashley you're gonna do this or you're not. Like what are you looking for? All of your indicators are green, just go for it. So I went for it. I put in $3,000 and in less than four months, that $3,000 became $65,000. And that was one of my best trades, in terms of the multiple on return, that I had ever made. It just reinforced me to trust my gut and reinforced that my strength is probably as a swing trader, not necessarily an NFT player.

Are there any coins or NFTs or DAOs that you've been eyeing and curious about but aren't actively involved in yet?

ALGO. For sure.

Right now, just in general, I'm tiptoeing around projects that pay out dividends. You can always stake a coin, which is a whole other rabbit hole to jump down. Aside from staking, there are just coins that will pay annually for you to hold them in a native wallet. ALGO is one of them. ALGO actually even pays out if you hold it in a Coinbase wallet, it's just the rate of return is smaller through Coinbase, but obviously more convenient. So for people who are holders, who don't intend to learn how to trade, or don't know how to set a stop-loss, I would definitely look into the coins that, you'll look up a year from now and have more of them, whether or not the coin goes up. You'll have more of them.

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