Moderator:

Sam Kamani, Venture Partner @ 3x Capital | ex-Founder(2X exits) | Amazon best selling Author | Podcaster | Keynote Speaker

Guest:

Jiri Kobelka, CEO & Co-Founder of Tatum

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Which blockchain is the most active? Which blockchain should you learn about first? Where should you build a decentralized app or where should you build an NFT marketplace? If you are into NFTs or if you are a developer or if you are someone who is interested in blockchain, then this episode is for you. In this episode of the Web3 Podcast we interview Jiri Kobelka. Jiri is the founder and CEO of Tatum, a platform that allows you to build marketplaces for NFTs.

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Web3 with Sam Kamani: 10: Lessons and data from over 1000 NFT Marketplaces with founder of Tatum - Jiri Kobelka on Apple Podcasts

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Sam Kamani

Jiri, it's great to have you on the show. So looking forward to talking about Tatum, I'm a member of your Discord community and I have been following your work on LinkedIn and just online and being in the space of working and building NFTs and creating that and creating NFT platforms. I've been very interested in knowing more about Tatum. So first of all, I'd like to know, how did you get started with Tatum?

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Jiri Kobelka

Well, my background is originally in banking. I spent 15 years in banks as an IT person. I was a core banking expert. And so I did, for example, conversion to Euro in some countries and had a lot of fun. And I think it's... over five years ago, my wife told me I should get interested in blockchain and so it was her fault. I mean, I think she regrets it now.

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But that's how it started. She said, you know, you should be interested in that. And, you know, I was from banking, so I was like, okay, that's Bitcoin, it's a scam, right? I don't do that. And she said, but, you know, maybe you should read about it. She's persistent, I can tell. And so I started reading about it and then I realized, it's actually incredible technology.

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It will change the world, hopefully, for better. But what I realized is that it's still early and very difficult for developers to use. So that's how we started Tatum.

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With my co-founder Sam, and others, we were thinking like, okay, so, you know, most developers are basically using frameworks, whereas in Web3 right now you actually have to know how to code in this blockchain. Now, you actually have to code everything from scratch. Like, in most cases, unless you are building some Hello World app, it will take you 6-12 months to get some reasonable results, because you have to go there, you have to scan blocks and all the crap you don't actually want to do, it's just because there is no other way, so you do that and then what happened to Ethereum was that it became too expensive, so whatever you have built, you can just throw it away and start over somewhere else.

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I mean what happened with Polygon yesterday, that's terrible, they had 30 Gwei P's and yesterday it was about four and a half thousand, basically 150 times more. I strongly believe that people should not do this assembler-style building directly and connecting directly to nodes. It's useful, but it shouldn't be kind of a rule. And it's better to use some framework which abstracts you. And that's what we did with Tatum. We basically created a framework where it's abstracted, so you don't have to be a blockchain expert. You can switch to any chain basically in seconds. So those people who were using Tatum yesterday, they just switched in a minute to some other chain and their app was working. Whereas, those who are not running on Tatum, they basically have to pay all these.

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Sam Kamani

The thing is that everyone is fed up with the Ethereum fees, but still there is so much developer activity on there. Either side of things compared to any other chain. Or is there really?

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Jiri Kobelka

We have about 160,000 developers in the platform and over 6,000 apps and over 1,000 NFT marketplaces. So we actually see a lot of data already for the past year. So I can share with you - numbers. So Ethereum is getting used by developers. So we have about 18 blockchains we were following in this report.

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We are actually creating some reports already and I have numbers here so I can share them. We don't have Solana and others because we started to support them later last year. We don't have enough data to do some conclusions, but Ethereum was about 7% of the whole usage and the activity on Ethereum was only 0.3 % so basically by activity or transactions I mean rights to the blockchain right to database. Bitcoin was 68%. So, 68% of traffic was Bitcoin but only 0.01 % of activity is right because it's slow. You can just write like six transactions anyway and that means a lot of apps are using Bitcoin because it's a standard but they are only reading information no one is using anything really and the most active blockchain last year from the major ones was actually Polygon. It's interesting they have like almost 5% of the overall usage and 18% of the usage is actually right, so if you compare it to Ethereum they have 0.3% and Polygon has 18%.

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Sam Kamani

OpenSea has removed the friction from the gas fees by absorbing it from Polygon. If you mint something on OpenSea using Polygon or Matic, you don't pay anything. That is if you mint something using Ethereum, it's like you know 80 to 200 dollars US depending on the time of the day. And that is to create the NFT, then to sell it or transact it that's more and that's painful.

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Jiri Kobelka

There are a couple of things we do recommend. So first of all, OpenSea is I think one of the first major NFT projects, right? I mean, they all agree that they did an amazing job.

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Sam Kamani

70 % of the traffic, September or October, was on OpenSea. Like 60 -70% of all the NFTs traded for in transaction volume or however you say it was OpenSea. Somewhere I read that. Is that true?

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Jiri Kobelka

I don't know. So let's go with this one. What I can tell is, I think OpenSea did an amazing job, but I think we already see much bigger projects being built. If you think about it, they have about 25 - 35 thousand active users daily, based on Dapp Radar. And I think it's kind of the first generation. To be honest, they can do a better job, really. Sometimes you cannot even see images of NFTs, and OpenSea still has some issues with phishing and technically. And the user experience can always be better and we already see projects which are basically scaling to hundreds of thousands, even maybe millions next year of daily active users. So, OpenSea is kind of like the first step. Yes, I wouldn't consider that like this is the final thing, even though I think they recently raised like 13B dollar valuation.

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Sam Kamani

Yeah,I think it's A16Z. I think so, they are one of the investors in them. So which NFT marketplace would you recommend or you see as growing really well in this year in 2022?

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Jiri Kobelka

I don't want to disclose and I can’t because we have NDAs. Just wait, I would say until April, May, and we will see something. But right now, I think still, I would still stick to OpenSea because you have people there and I would just stay with OpenSea for now and we will see in May.

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Sam Kamani

Just thinking where else are people? I know SolSea has done well when it comes to Solana, a lot of transactions there. If you’re an NFT creator, an NFT artist, what other platforms would you recommend they should check out when it comes to NFT? Should they create their own?

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Jiri Kobelka

It depends what, how they want to brand basically their portfolio. We have a lot of projects which are building NFT marketplace over thousands of them. And there is kind of a funny story because we have something we call NFT maker, which is basically a WordPress plugin. It actually started as a kind of internal Tatum fun project, let's build something for fun. And the first version was terrible, like they wouldn't ever use it. But we had like 300 live sites using this plugin. So we actually had to do another version, which is nicer and a little bit more user friendly.

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Some of them are building or creating their own NFT marketplaces, even with this NFT maker, or they're building it by themselves using API. I think still, most of them aren't basically going to OpenSea.

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Sam Kamani

With your WordPress plugin, can someone create for example 10K PFP project type thing or would it be only sell limited item like an art by an artist? That type of a thing. I haven't tried it yet.

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Jiri Kobelka

You actually can try it. Only  problem with our NFT Maker right now is that it only works with paid plans, so there is no free version.

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Sam Kamani

That's not a problem.

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Jiri Kobelka

Excually, I don't like it because I always like people can try things for free, but the problem here is that what we do is we do this lazy minting and we cover fees for you. So basically, we have even API for that and it's kind of very popular. So as a developer, if you are building NFT marketplace or if you want to mint NFTs, if you are a normal person, so the first thing you have to send money from your bank account to some exchange, which by the way, in some European countries, basically means the bank will close your bank account because you cannot do that. They don't like it and then you have to do this exchange and you don't know how much actually of for example Ethereum or Polygon or whatever you will need because you don't know how usually you don't know how much NFTs will mint.

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So and how much it will cost really, then you have to send it to some address, keep your treasure or something safe and actually don't lose anything and create a code and so on. Whereas in Tatum case you can do that of course if you like. It's a framework, we don't limit you. There is one feature which allows you basically to just call you mint NFT for me and we cover all fees for you. So you don't have to do anything, it works like you buy the plan and whatever you mint will deduct from the plan from your credits you have.

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And that's the reason this NFT maker is paid. And NFT maker is doing this lazy minting. So you're paying NFT immediately, but only once someone buy that.

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Sam Kamani

Can you create a custom smart contract?

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Jiri Kobelka

Not with NFT maker, because the purpose of NFT maker is to make it simple. So we can just mint NFT with images. By the way, actually interesting thing, which is something people don't know really, it's not only about paying fees for minting, you also have to pay fees for storing the data.

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So if you have some image, and it starts in IPFS, then you have to pay once a while, have to pay fees for IPFS, otherwise they will delete it. It's a blockchain, so you cannot, you shouldn't delete it, but it can of course. So what happens a lot is that people don't know, so they, even if the developer actually pays the actual fees for IPFS for a year or something, then it will disappear. And it happened a lot last year actually, a lot of people were like, where is my NFT? Well, it's gone. And then they don't know to whom they should pay and where.

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So we have this feature which is kind of very unique. Whatever you will mint with Tatum including NFT maker which is kind of built on top of Tatum, as a developer platform, whatever you mint, we actually cover all fees for you forever. So you don't have to take care of the data anymore. You have this partnership with some kind of amazing guys and and we pay all fees.

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Sam Kamani

I have used like RV and other you know places to store. Are you guys getting funding as well from them? Or have you guys talked to them?

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Jiri Kobelka

I know they invested into Alchemy which is currently our competitor partially.

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Sam Kamani

They don't have a product like what you have, like the WordPress plugin and a lot of the other things that you guys do. They don't do all that. It's the major difference.

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Jiri Kobelka

That's one thing, but overall I think the major difference here is that our positioning is that we are a framework helping developers to build blockchain apps much faster without the blockchain experts. Whereas Infura, Alchemy and others are kind of like PHP hosting for blockchain nodes. So you still have to be a blockchain expert. The only thing they do is they allow you access to the node. So for Ethereum, for others. So basically you have to be a blockchain expert.

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And you can see that as a pattern in every single technology you have like these pre-generations. The first generation is kind of this assembler style, that's basically Alchemy, Infura and others. So you have to be expert in that particular technology.

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Then the second generation is usually like you don't have to be expert in every single technology, but you have tools and you have a lot of them. Like in web, like in 94, 95, you had to be expert in HTML and everything and it was terrible, right? And you code everything from scratch, there was no tools for that. And then you had tools like I want to create image map or something. So we had one tool and you have to be good at the tool and understand how it works. Then you have tools for compressing HTML and you have like 30 of them.

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And that's what we have in blockchain space today. So it's nice because you don't have to be expert in the technology anymore that much, but you have to be good in many many tools and it's not really developer friendly.

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And then the third generation is basically that you have everything in one place and it's kind of frictionless for you, so you can just build and that's where we are positioning Tatum. So the major difference is that you dont have to build things from scratch. It's multi-chain and cross-chain, so you can basically you can code once and deploy to any chain. I mean as long as it supports features you are using. It's the way how this works and I think in the next years and we actually see bigger and bigger projects moving to this abstraction.

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It's a kind of very funny story, but we have already seen kind of a huge number of bigger companies and we spoke with them like three years ago and it was like, so two founders, technical guys, experts in blockchain, we don't need you guys, right? We are good. And then they succeeded. Now they are trying to get 50, 100, 200 engineers in a year, hiring 10 new people each month. And now the problem is that you have only a limited number of blockchain developers, especially, I mean, the good ones, very few of them in the whole world. So if you're hiring 100 people, 200 people. You are happy to get average or more senior developer, actually. I'm not talking even about blockchain developer. You have no chance to get 200 blockchain developers.

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Sam Kamani

Yes that's true. It's like even in the Web2 space, the old school space, it's just there's not that many really highly skilled developers out there. I'm not sure if you're aware of what people are getting paid these days.

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Jiri Kobelka

I am aware. We are still hiring people.

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Sam Kamani

I don't know about the Czech Republic, but it's crazy in New Zealand, we never heard salaries like 300k before. It used to be like 100k and really good candidate but now 100k is nothing at all. New Zealand is not at the same level as California, if you're hiring someone in California or somewhere else or even in Australia it s like 2x more expensive than New Zealand. It's crazy people are getting paid like 600,000 plus stock options plus other things and stuff it's crazy out there. The thing is that so many developers are leaving their jobs at highly funded startups to go and build something in the Web3 space. So, in blockchain, crypto, NFTs and all these spaces that's why you have a thousand and thousand marketplaces suddenly and those people are sure there is so much money floating around in the market. All these startups are raising ten of millions in their seed round, which used to be a few hundred or thousand back in the days, with 12 million in their pre-seed or seed round type thing. And so they're going to pay through anything to hire the developers because they have to show that they have a team and they're moving.

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Jiri Kobelka

That's true. But then when you start scaling and you are at SerieA, SerieB or in Serie C and further, you cannot, because there are not enough people actually. So what is happening? They are coming back to us and telling us we would like to start actually using you. Because you have basically two options, either, well, you have three options, doing nothing and hoping, which is also a kind of strategy. Sometimes it works.

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The other option you can go with Tatum, for example, as a framework and the last option they're trying to do today is they're actually having this six months long onboarding program where they are taking these Web2 developers and trying to make them Web3 developers. The problem is that after six months, these guys are Web3 developers, they are experts, so they can go somewhere else for the $600,000.

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Sam Kamani

That's true.They can get another job.

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What I have seen is that there are NFT projects which are worth hundreds of millions or even in billions these days and then there are NFT projects which are not even worth $10. Even though the initial investment that went into both the same what differentiated them is that one team managed to get an audience build a community of 50,000 people because they had the best marketers they had the best business development people they did everything right on the promotion side and on marketing & sales side and the other team did everything right only on the technical side but didn't do anything right on the other sides.

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So there is a huge shortage of marketers as well in this space and the thing is that because of the profits are so instant in a if the NFT project does well that the best ones are getting paid a lot. So,it is very hard to find good people now in this space at the moment because also of the hype that maybe will die down in six months and it'll be easier.

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Jiri Kobelka

This is my secret but i'm looking forward to crypto winter everyone is asking what will happen in crypto winter. And i'm just like work finally i don't know if i can share this but actually i'm looking forward to that because there is so much noise right now that is very difficult to actually see the real value and crypto winter is very useful because it's kind of catalyst for good projects because good projects are still working and those who are just running during the hype or on the hype they vanish.

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Sam Kamani

Just like most of those of 2017-18. I don't know if you remember.

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Jiri Kobelka

I do remember, that's actually a good point. So just for information we have seen about 30 times more activity on NFT side. So, again ERC -20 they have much more read operations which is basically given because of history, because of 2017/18, but when it comes to NFTs we had much more new NFTs. What is interesting, if you have a little bit active project which on average is doing about 58 transactions with one NFT. I Don't know why, I just see the numbers of those things.

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It's OpenSea, you create and sell NFTs, so you have like two operations but when it comes to gaming and other projects there is a lot of activity.

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Sam Kamani

I understand that some of them are bought and resold and resold then some of them could be an auction that people are putting in a bid and every bid is put in it takes activity.

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Yes, because that so and it could be because you know every NFT could have like you know 40, 50 or 80 bids before the auction closes. That's why they have so much activity. Because for fact, that most NFT don't sell. That's just the reality. Very few projects sell out. And if they sell out, they become big names.

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Jiri Kobelka

Okay, so those are not actually included in this number because, in this average, we separated those who are kind of very active from those who are not, who are just minting and waiting to sell. It can be like that. I'm a huge fan of NFTs.

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This is kind of multi-token where you have this NFT. You cannot divide NFT because it's unique. But if you have projects which are selling something for $100,000 or $1 million, it's very difficult to sell because unless you will find out one person will pay for that, you actually have to find a group of people who will pay $1 million. And usually it means if you have some sort of auction that they have to legally create some company, they all invest money into the company, this company actually paid for this in this auction.

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Let's say, both of us would like to buy something for $10,000. You have $5,000, I have $5,000. But we don't know each other, we don't trust each other that much. So who will own the NFT? It's only one. So would it be you or me?

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What will happen? We will create a company and that company will own this NFT, but it's expensive, it's stupid and it's tedious. So what this multi-token feature is doing is you have this one NFT, but at the same time and it's on chain, it's not in OpenSea, once it leaves OpenSea, it's gone. It's really on chain. You can have ERC20 included. So basically you can have, I don't know, million shares and you can trade each of them, you can sell them, so this way we can both pay $5,000, I will have 500,000 of shares, you will have 500,000. If you decide to sell 250, it's up to you, and it's always on-chain, always we know who owns what. That's something, especially for more expensive NFTs or NFTs connected to the real world.

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And then what we launched in April is NFT Royalties. It's also very successful and NFT Royalties works like, you have this NFT and once you create this NFT as an offer, you can say that you want to have 10 % of all future sales.

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So you know, this is kind of what Hollywood is doing. Basically they are taking this cash from everything. So this is pretty much the same principle and you have this royalty and you can adjust it and you can go with percents or absolute amount and it cannot be avoided basically, so that's because it's on-chain.

Sam Kamani

You can have it for multiple people.

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Jiri Kobelka

You can do payouts over a hundred different accounts at once. A lot of fun.

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Sam Kamani

The reason why we are looking at it is because we are working with some celebrities in Hollywood and so that's what we want to do is that so if the NFT resells, a part of it goes back to the celebrity and part of it goes to charity. So it does that anytime or it could support multiple charities and stuff. That's why I have come across Tatum as well because of searching for these sort of different things and stuff.

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Another question I have for you is what are the few blockchains that you find will be really promising in 2022?

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Jiri Kobelka

Well if you would ask me two days ago, I would say Polygon. I'm still a huge fan of Solana, they're doing a great job. It's a bit more difficult blockchain than others. They have these accounts of accounts. So I think Solana is great. I'm so looking forward. We support Solana now. So, people don't have to know Rust anymore. I'm still waiting for Cardano actually to kind of create some reasonable version, which can be used by developers. When I'm saying something about blockchains, I don't care about the market cap and prices and trading.

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Sam Kamani

Yes, no worries, my question is from the aspect of developers.

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Jiri Kobelka

Cardano itself, the servers and overall is kind of very unstable. Very often there is even no RPC. You have to go from command line, which you cannot scale really. I'm still hoping they will do something a little bit more developer friendly. And if they will do that, maybe they might be very interesting because of the user base they have when it comes to the retail. So let's see.

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What I would say is surprise of the year to me is Celo, actually. It's an amazing team and it works. The best thing about Celo is they actually made everything right. They are not that famous as Solana or others. Ethereum is slow and expensive and Celo is much faster. They can do, I don't know, I think between 1 -2000 transactions per second. Whereas Ethereum can do 15. And they have some other benefits which you, as a developer, would appreciate a lot.

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So for example, if Ethereum do rewards, which means whatever happens in the last three or four blocks, for example, can be changed. So if you think you will scan the last block and that's it, you are wrong. Because that can be changed. And it actually happens. It's not like once a year, it's happening a lot, whereas Celo is final. So whatever you see is true, is final, they don't have rewards. It's a minor thing, but very important.

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Celo did an amazing job last year, actually they did some hackathons together and I think the team is great. So let's see. Binance Smart Chain has been used a lot, even though it's already more extensive.

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Sam Kamani

All coins are born there on the Binance Smart Chain. That's why it does get sometimes sort of not that good a name, because you know it's so easy to create your own token or create your own coin on Binance. There's been a lot of, I don't know, maybe you can say scam coins that have come through that. It got a bit of a negative press and stuff, but that's bound to happen, it could happen to any chain.

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Jiri Kobelka

So, what is interesting, we saw apps built on Tatum, we process in a week somewhere between 1 billion and 10 billion dollars. So, apps built on Tatum are doing, and it's just when it comes to cryptocurrencies, I don't count NFTs and some ERC20, we don't know the value. What was surprising to me is that the most used, when it comes to the volume, when it comes to dollar value of transaction. Okay, I will let you guess. Which blockchain do you think is doing the biggest volume of transactions? And I will give you a hint. It's not Bitcoin.

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Sam Kamani

Biggest volume of transactions?

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Jiri Kobelka

In dollars, basically. Out of those billions, it's the major of transactions when it comes to dollar value is being done by which chain?

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Sam Kamani

I would have said Polygon, but I'm not sure anymore.

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Jiri Kobelka

No, it's strong, actually. It's strong. Yes, if you would kill me, I wouldn't guess that.

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Sam Kamani

No way! That's a name back from the 2017 -18 era.

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Jiri Kobelka

It's true. Numbers don't lie. I can, they don't, and it gets worse. The second one, which is doing actually even the biggest, on the biggest transactions on average, like the size on average is huge, is Litecoin.

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Sam Kamani

Litecoin? I know, I mean, the thing is that you don't even see these names in coin market cap in top 10, but these used to be in the top 10 in 2017-18. The NIO and quite a few Monero and quite a few used to be up there that you don't see anymore. And all these used to be there. On this note, let's take a break and move on to the next episode.

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