Conversation with a Virtual Llama Owner with guest Clément Pouget.eth-Osmont

Richard Kramer: [00:00:00] Welcome to Bubble Trouble, conversations between the independent analyst, Richard Kramer, that's me, and the economist and author, Will Page, where we lay out some inconvenient truths about how financial markets really work.

Given the collapse of crypto fiasco FTX, we're busy trying to trademark the words Bubble Trouble, as we're seeing it bubble up all over and burst everywhere all the time now. Now, we're not here to bask in the glory of told you so, rather we're trying to make sense of the nonsense.

And as our most successful podcast to date was our unscripted "NFTs Are Not for Me", we turn to a man whose post on LinkedIn mocking the dubious NFTs ratcheted up a record seven million impressions to work out where do we go from here? Spot the irony here, a post mocking NFTs went more viral than NFTs themselves. More in a moment.

Welcome to Bubble Trouble. Please welcome, and please try to pronounce properly, Clement [00:01:00] Pouget-Osmont. Will, do you want to introduce Clement to the podcast?

Will Page: Absolutely. It's an honor to have you here, and thank you for working all the time zones involved in this podcast. We have Paris, London, and New York united for this one. So, Clement, I mean, let's just allow you to grab the microphone for a second and introduce yourself, your very interesting work, and also really important for our audience, how can they follow you, other than stumbling into that [laughs] famous that's your LinkedIn, which we'll come to shortly, but tell us a bit about your work.

Clement Pouget-Osmont: Yes. [laughs] Thanks a lot for having me, and nice to discuss with you. So, yes, I am Clement from France, and sorry in advance if my English is not, uh, very good. I'll try my best-

Will Page: It's be-... It's- it's better than mine. [French 00:01:40] It's gonna be better than mine. [laughter]

Clement Pouget-Osmont: I'm not sure, but thanks. So yes, I- I'm here because I made a post on LinkedIn where I explained that I bought NFT one year ago for, like, $1,000 and that is now worth almost nothing, and, uh, [laughter] it, it, it had a lot of success, as you say, a lot of impressions.

[00:02:00] It's funny, because, uh, this post together, the uh, skeptics, and NFT, uh, degens so both, uh, [inaudible 00:02:09] is, uh, indeed funny, or feel like they, they have lived the situation, so that's... I am... It was a joke from the beginning, even if it's my real story, uh, the goal was to have fun with that, so I'm happy with the outcome, obviously. [laughter]

And, and to tell you more about me, uh, so I'm walking in the NFT field, I'm helping company to create NFT expenses. The name of my company is Bulldog, and you can follow me if you want on Linked In. I'm the most active, uh, on Twitter, actually.

The things I post on Twitter, I feel like I speak a- alone on Twitter, nobody really cares, but this is where I share, uh, sometimes picture of my dog, so if you're interested in that, you can join me on Twitter. Otherwise, on Linked In, it's a bit more serious, even if it's not really serious.

Will Page: And I, I actually have a phobia [00:03:00] of dogs. I'm scared of dogs from my childhood, and I heard your dog either snore or growl in the background earlier today in a pre call, [laughs] and you showed me, and it made me want to run away from a virtual dog on the screen. It's a big bulldog, correct?

Clement Pouget-Osmont: Yes, they are snoring very loud. That's why I came upstairs for the podcast, and not downstairs with them. Otherwise, you will have this noise in the background.

Will Page: Well, I want to dive into the NFT question straight off the bat here, but firstly, let's just get the count. How many impressions of this Linked In post are you at just now? You were at 7.3 million, or something?

Clement Pouget-Osmont: Yes, around 8 million.

Will Page: Whoa. [laughter] You're gonna do to Linked In what Susan Boyle did for YouTube. You're the first viral hit mocking NFTs. It's so ironic. You're gonna have to NFT that image, that's what we have to do, right?

So, let's get to it. We are closing on 2022, and if I do my math, this will be the last podcast of the year, so we've had 365 days behind us. When you look back at this wild ride of [00:04:00] 2022, how do you make sense of it all?

We started off with NFT mania, crypto's the new currency that's gonna rule the world, [laughter] and we end up in a brain fart, as we call it here in London, where everything's fallen flat on the ground.

What- what's your main recollections of the year?

Clement Pouget-Osmont: Uh, yes. So 2022, I think, is the year of the, the bubble bust, [laughs] uh, so it's a bit... For me, the... Maybe the defining moment of 2022 is the crash of LUNA. I think it was in May, or something like that.

And in my opinion, it was at that point that we, uh, all agreed on the fact that, okay, the bull market is finished, [laughs] uh, now let's, let's have more realistic ambitions. But before that, last year in 2021, I think one of the defining moments was the sale of the First 5,000 Days by the artist, uh, Beeple, which has been sold for, like, $69 million.[00:05:00] 

I don't remember if it was [inaudible 00:05:04] so th- this first sale put the NFTs on the scene as a... As something that cannot be missed by a traditional [inaudible 00:05:18]

And after that, during the year 2021, it was completely crazy, and I think this is what we will remember, is that the year '21, 2021, will be remembered for a long time as the... As the moment in history where people were going completely crazy, um, on stupid things, [laughter] myself included, obviously, but where a- any, any monkey pictures on the blockchain was, was selling for thousands of dollar.

And, and so obviously some of them still have value today, but you... We know the story now, and it could have been predictable by them, but as I think my kids will maybe have fun of [00:06:00] me when they will see what I bought in 2021. [laughter]

Will Page: If it's still on your phone by that point. Let's play salvage squad for a minute, in terms of what can you salvage from 2022? And I hear this a lot, like, "Crypto is dead." And then people say, "No, it does have a future. There is a purpose, it just hasn't found a use case yet."

"NFT's are over." And then other people saying, "No, there is a future for digital art. It- it'll find a way back into the market. What would you salvage from this bubble bursting?

Clement Pouget-Osmont: Yes, but in my opinion, nothing has changed on the fundamentals. Obviously the price is much lower than it was last year, but in a sense, it's a good thing because the prices were completely crazy, and this correlated to the real value of things.

And for me, the fundamentals are exactly the same, just the fundamentals, for example, of Web... What we call Web Tree. It's a, a version of the internet where people are owner of their data, of their assets. And what Web Tree wants to solve is [00:07:00] the kind of injustice that we have.

For example, with Facebook, or Google, where from our data, they make billions of dollars, and we get nothing, and Web Tree tried to solve that by making people owners of, of their data, and this hasn't changed with the collapse of prices. And the... With the Web Tree, uh, there are two major use cases that are still relevant.

There is the, the decentralized finance, the fact that anyone can m- manage his own money as you want, make loans to someone else, take credit, uh, without a centralized institution. This still exists, [inaudible 00:07:39] and, and the collapse of prices, again, doesn't change that.

And obviously, there's a use case that I know even better is NFTs, and the NFTs, the problem that NFTs are solving is the fact that it has historically been very complicated to give a value to digital assets. You... For example, the music industry, very well [00:08:00] in music, if I'm an artist I make one music.

It's on my computer, I send the music to someone else. At the end, we both have the music and we cannot differentiate the file, who is the original owner of the file?

Will Page: Mm-hmm.

Clement Pouget-Osmont: And this has been a problem historically with digitaL assets, and NFTs solve that. Uh, with NFTs, I know I'll get the original file, the one that has value that has been edited by the artist. I can verify this ownership, and so give value to this one and not to the, the other one. So all of this hasn't changed, the value. The problem that Web Tree NFTs and decentralized finance want to solve still exists, and can still be served.

Will Page: Before I hand you over to Rich, let me just add a point to that, which I think the music industry is waking up with a very stiff hangover to the prospect of AI music, like we have problem with [inaudible 00:08:55] just now, and the carbon copies going up on Spotify and Apple, gathering streams which don't go to [00:09:00] the owner.

When you introduce AI music at scale, then you're understanding how ownership is gonna work is a whole different ballgame, so it's very interesting to think about potential use case there when AI can predict a melody that works, replicate a melody that has worked, integrate that melody into it's own composition, and then shove that up onto a playlist that gets all the streams.

So, yeah. Ownership is gonna be a chapter worth reading in 2023. Richard?

Richard Kramer: Yeah. I want to pick up on two of the things that you mentioned there. We had one podcast earlier this year we did with a crypto fund manager, where they described a process of being red pilled, so referring to the Matrix, and saying the moment you take this, you can't turn back. It... We're going to a new world.

But unfortunately, the ir- irony of your Linked In post was that the monetary losses for a lot of people are real, and I know the red, red pill always looks tasty because we've seen this in many Bubble Troubles before, in, in, in everything going back to John [00:10:00] Law and the Mississippi investments by French... Uh, by people in... Parisians in the 17- 18th Century, and the Dutch Tulips.

We know time and again that red pill leads to a bit of disaster, so I guess the question is, what shakes the confidence of true believers? Are you still a true believer, having seen all of these NFT use cases that didn't pan out, all of these billions of Board A transactions that didn't end up having a lasting value? Are you still a true believer here? And if not, what, what got the scales to fall from your eyes?

Was it the way in which these NFTs were being used, or the types of things crypto was being applied to, in terms of use cases to buy? I'm just curious how you approach this world that you've been steeped in now that you're suffering personally a financial loss?

Clement Pouget-Osmont: Yes, that's a good question. Well, the first thing is that overall, I'm f- financially okay with, with what I've done in, in crypto and [00:11:00] NFTs, and that's maybe why it's easier for me to be ironic about it, because I'm not in trouble. [laughter]

Many people are in trouble, and maybe for them, it's harder to be ironic and have fun about that, especially with the collapse of FTX. That being said, I try as much as possible to not be a crypto red pill, "Everything is perfect." You know, for th- this kind of thing.

I, uh... I don't like, uh, this output very much. Uh, on the other end, it's when I think it's time to sell the position, when everybody becomes like that. But still, yes, to answer, I'm, I'm still a believer of the fundamentals that we discussed before, no problem with that.

I'm obviously conscious that, uh, it's not ready yet, th- this value proposition. The decentralized finance already exists, it already allows some people that don't have access to banks to manage their own financing. Uh, Bitcoin is already used by some countries, even El Salvadore, uh, to [00:12:00] protect themself against the dollar, and things like that.

So, it works, but yes. If we are honest, the use age today compared to the market cap, and the value, there's still a, a gap as we... We have the example, for example, with the Metaverses with a very high valuation, and low use age, uh, so, so yes. I'm still skeptical about, about concrete usage right now.

And as working in the NFT field, I see a lot of NFT projects fr- from traditional company. For example, that they want to take the wave of NFTs because of PR, because it leaves a good image, but they don't want to use the word NFTs because it also can have a bad image.

And, and so they try to launch a project where you don't need a Wallet, where you don't need crypto to get in. And for me, it will come in several years but for now, the... I think those projects, they miss a bit of the point right now because they won't attract the true crypto [00:13:00] believers, and they don't have enough value to bring people that are not crypto in. So-

Richard Kramer: Yeah.

Clement Pouget-Osmont: I- I'm skeptical about a lot of things in this space, but in the short term, because coming from a company... A Web2 company, with a [inaudible 00:13:15] when you arrive in Web3, sometimes you, you miss that.

Richard Kramer: Hm.

Clement Pouget-Osmont: You think, "Okay, it's... We don't have this kind of [inaudible 00:13:24] obviously. It's, uh... It's only a few years and NFTs are even, uh, only four years before, so it will come.

Richard Kramer: I want to take one other angle on this because the French are famously anti-authoritarian. They don't want a, a centralized authority, and they're skeptical about the king, [laughter] or any leader, of course.

And, and I understand that a lot of people are more supportive of cryptocurrency or decentralized finance because they've run out of conviction that the monetary authorities, or the central banks, have a hand in things.

So in the art world, the attribution of paintings, and that they are [00:14:00] genuine is something that's done by a certain high priest, or high priestess of art scholarship, and no one else can do that. And I understand that in the modern world, this will... That authenticity will be something that's on the blockchain, and there for everyone to see.

I understand that when you call it distributed ledger technology, it's not nearly as sexy as blockchain, you know, that a lot of this has been marketing. But my question here is, do you think this is just too small of a movement to overturn the established finance world?

Because, again, when wee, we talked on previous podcasts about crypto, it's now down to a total global market cap of something like $800 billion, and that's a tiny drop in the ocean of the hundreds of trillions of value of, of all sorts of other asset classes out there. Is this just an anti-authoritarian movement that needs time to, to become mainstream?

Clement Pouget-Osmont: I, I hope so. [laughs] Um, I... To be honest, I [00:15:00] agree. It's, it's very small compared to the traditional finance, and the traditional finance is maybe the strongest thing we have on the planet, so if at some point, the crypto thing annoyed them, they will have ways to shut it down, I don't know.

But the good thing we could do is that in the bitcoin especially is that you cannot shut it down, so you know if coin will still exist, no matter what, uh, as long as we have internet, obviously, but the moment where we don't have internet, we'll have a lot of other issues, even with traditional finance.

Richard Kramer: Mm.

Clement Pouget-Osmont: Will it replace the traditional finance? Most likely not, but as, as long as it gives an alternative to the one who needs it, it's, it's good enough.

Richard Kramer: Right, and I want to ask one simple choice question, [laughter] which we hear a lot about now in the collapse of FTX, everybody's running to after the fact, ex post facto, explain what happened, or why it was allowed to happen, we must not allow that to happen again regulation.[00:16:00] 

One school of thought says, "Don't do it. Don't regulate it because that confirms legitimacy on something that... We know bitcoin has been used to buy drugs, or people trafficking, or all sorts of terrible use cases, or weapons, for all sorts of nefarious purposes, Ransomware for example.

You don't want to confer legitimacy on something that's used in so many societally unwanted use cases. On the other hand, you say you have to regulate it because too many people are being sucked into schemes that... Where they lose all their money. They're being promised...

I don't know if you followed the saga of OneCoin, there's a fabulous BBC series on OneCoin, and the Cryptoqueen, so many examples where people thought this was the alternative to their local currency, and would be stable or keep going up, and it didn't, and they lost their life savings.

So, which side do you fall on? Do you think ultimately, NFTs and crypto will be tightly regulated by the authorities, and be [00:17:00] legitimatized, or do you think it will always stay in that anti-authoritarian alternative ecosystem play?

Clement Pouget-Osmont: Well, I think it's going to be regulated. It's already regulated, actually. For example in France, if I make money with crypto, I pay 30% of taxes on that, on the benefits so, so there is already a regulation. Obviously it can [inaudible 00:17:22]

And about legitimacy, I think yes, uh, bitcoin, uh, is used for criminal activities, just like any other currencies, but it's... I think it's already legitimate. $800 billion is more compared to traditional finance, but it's still a lot of, of money.

Uh, the number of very big companies, government [inaudible 00:17:43] is a legitimacy already, and also the... All the digital currency of central banks that are going to be deployed. I don't know if it's a good thing or not, but again, it will go in the way of regulating the crypto area of the world.

So [00:18:00] for me, definitely. It will go towards more regulation. Is it good, is it bad, I don't know. We saw it was to be regulated, and it made the world too connected to the power to have proper controls, but in the end, even with regulation, you'll still have collapses.

Uh, [inaudible 00:18:18] was regulated so it won't be perfect, and especially in the crypto world, where the technology moves very fast, the regulation will, will always be late. So, yes, uh, regulation is going to happen. It won't be perfect. People will always find a way to go around it, but... So, yes. I think it's, uh... It's coming.

Will Page: Just before we go to the break there, Clement, just you mentioned that in France, they're taxing the profits that you make from an NFT, so you make $100, you have to pay $30, or Euros in taxes. Is that correct?

Clement Pouget-Osmont: Yes.

Will Page: So-

Clement Pouget-Osmont: It's like, for all financial gains.

Will Page: So what happens if you make a loss? I mean, that llama that you famously [00:19:00] purchased for 1,060 pou-... Dollars that is now worth $30, can you offset your losses against your taxes?

Clement Pouget-Osmont: Well, that's a good question. To be honest, I don't know. I have to- [laughter]

Richard Kramer: Well, you've got your tax return coming up for 2022, [laughter] so you're gonna be finding out.

Will Page: Are they-

Clement Pouget-Osmont: Yes. Yeah, I have to check that 'cause I have a lot in taxes if that's the case. [laughter]

Will Page: There's a lot... There's a lot of losses to cancel out these profits. And then just lastly before we go to break, I am tempted to ask this question because it leads into where I want to go in part two.

But you said am- amazingly, you've had 8 million views on this post on Linked In about a llama that you purchased for $1,060 that's now worth $30. Are you seeing any bounce back in the price, given the number of people who've viewed your post? Are we seeing, like, price go up the more people that view it?

Clement Pouget-Osmont: No. [laughter] [inaudible 00:19:46]

Will Page: [inaudible 00:19:47]

Clement Pouget-Osmont: Yes. When I saw the success of the post, I went to the marketplace Magic Eden, where you buy NFTs on Solana to check if the bal- balloon went a bit higher or not, and to be honest, my post didn't have an [00:20:00] impact on the sales.

I received an offer in comments for, like, $100 so [laughter] I don't know if they are still on the table, but I could sell it at this point.

Will Page: If this podcast does give you a bounce, we want our 20%, okay? We'll be back in part two. I'm buzzing on this one, back soon.

Richard Kramer: Welcome back to part two of our Bubble Trouble talking about NFTs and crypto with Clement Pouget-Osmont. I'm gonna hand it over to Will, who's gonna go deep down the rabbit hole, as we typically we do in the second half of our podcast.

Will Page: Thank you, thank you. Merci, Clement. Clement, the question I want to go down the rabbit hole with you is on the signaling value of an NFT, and this is where I struggle with the whole concept.

We thrashed this out on our NFTs, Not for Me podcast, and now we have an expert like you in the studio. I think it's really important we get your take on it. But if I just think about [00:21:00] modern art, one of the things that drives value for modern art is the art itself.

But another thing is the signaling value of that art, it can be displayed in a museum, in a private home, in a public museum, in a private situation. There's a signaling value, and I... If I think about other things which attract incredible values, handbags.

The value of a handbag could be the make, can be the texture, and the feel of that handbag. But another part of that value proposition is that people see that woman walking down Regent Street in London wearing that beautiful handbag. It's a signaling value, it's, "Look what I've been able to purchase. Look what I've been able to achieve. Look what I aspire to be."

That signaling value is at the core of all marketing, it's the core of all luxury goods. But NFTs don't have that signaling value 'cause the only person who gets to see it is me, and whoever leans over my shoulder and peers at my mobile phone for two or three seconds.

And I'm wondering whether that lack of signaling value kind of pulled the plug on what was... In the first half of this year, [00:22:00] a luxury good, and what is in the second half of this year, down the toilet? What is the role of the signaling value in creating luxury goods, and does that for... In your mind, as an expert in this field, apply to NFTs the same way?

Clement Pouget-Osmont: Yes, I love that question because in my opinion, the signaling value is maybe the... What gives the most value to NFTs right now. And y- your example is, is interesting. You say i- if I have a luxury bag, for example, I can show it around like, okay, my friends can see it, people in the street can.

Will Page: Strangers can see it. A stranger can't see your NFT but a stranger can see that art, a stranger can see that handbag.

Clement Pouget-Osmont: Well, a stranger can see NFTs. Uh, my llama has been seen by [laughter] 8 million strangers, and no joke-

Will Page: That's true.

Clement Pouget-Osmont: All jokes a- aside, we've... For example, you have a Chanel bag. You wear it for two years, you walk [00:23:00] around your city maybe in two years, like, I don't know, let's say 10,000 people will see.

If you have [inaudible 00:23:06] and you put it as your profile picture on Twitter, for example. Well on Twitter, millions of people can see it. And so the signaling effect, what people are looking for while they buy expensive clothes, they're not buying the bag, they're buying the message. "Look, I have more money than you, I have better taste."

And with NFTs, it's exactly the same. When you buy an NFT, you buy club membership, and the... It's all digital. But as we spend more and more time online to be able to show off digitally has even more value than showing off in the real life because we interact with more people online than in real life.

So if you want to show off actually, it's a better investment to buy NFTs, where millions of people can see it rather than a, a luxury bag that's, okay, maybe your friends, uh, a stranger on the street will see, but in the end, you can reach even more people online.[00:24:00] 

And that one more thing on this is that f- for example, the Bored Ape Yacht Club, if we talk about interest in value, I know that is something you've discussed in the previous podcast, uh, that it's hard to give interest and value to NFTs.

And so if you see it as membership, like I buy an NFT, I be- belong to a community, and for example, if we take the Bored Ape, which is the most famous and prestigious NFT community, having these memberships is like having a membership to your golf course, a prestigious golf course.

[inaudible 00:24:30] you don't buy that only to play golf, you could buy a, a membership way cheaper somewhere else. You buy that because you want to be in a nice place with important people, and send a social message.

And with Bored Ape, when you buy your Bored Ape... Actually, if I buy one Bored Ape Yacht Club, it will be like an investment of, uh, 50,000 Euros but it will give me, for example, credibility on Linked In to show that I'm a NFT expert, I know it well, and it will bring me contracts for... [00:25:00] From potential clients.

So it has this kind of interesting value, obviously. The community itself needs to be strong, and, and have some, some interest, but that's... So signaling, I think the signaling parties, it's what really, for me, drives the value of NFTs right now.

Will Page: Uh, just push back on one little thing there, just one wee thing that you mentioned, which is maybe only a few hundred people can see that woman wear a really posh handbag on the street, but millions of people can see that NFT, how do we know that millions are seeing, and how do we know that they're appreciating?

You could have a million people looking at a NFT of a llama that you purchased for $1,060 thinking, "What a douche bag." That's not the same thing as a few hundred people seeing that woman wear a really posh handbag on Regent Street thinking, "That's really elegant."

So, quality and quantity are not the same things here, when we look at signaling value, surely. How do we get attribution from the people who are viewing these forms of digital art? How do we know what they are A, they're actually looking [00:26:00] at it, and B, they're actually appreciating it? That's where I think signaling value comes in.

Clement Pouget-Osmont: Yes, the appreciating, it's... It would be subjective, like people can look at the bag of this lady and think, "I hate this bag, and, and, uh, what has she done? Why did she spend so many... So much money on it?" Same as NFTs, but-

Richard Kramer: Mm-hmm.

Clement Pouget-Osmont: Actually, for example, if you're on Twitter, and especially on Crypto Twitter, where every... People discuss about that, you know that everyone will love your Bored Ape, will give you a social statute, like you are an OG in the space, uh, is, uh, you were early, and it just gives you credibility.

Uh, and so you have a lot of money, and also kind of credibility. And so actually, you cannot be sure 100% if people will have a better opinion of you with that, but it's what gives the interest in, in the community.

If the community behind the project is... Uh, is good, with good value, good, good connection between the members, uh, then showing off this membership will, will be valuable.[00:27:00] 

For me, it's the... Exactly the same. If you wear a brand in the streets, will people like that or no? How many people will see it? Uh, you're, you're not sure.

Richard Kramer: I, I think I'd like to dig in on two things we touched on in past podcasts. On the NFTs, Not for Me, we really... We talked about wash trades, and how the value of some NFTs had been inflated because they changed hands between related parties several times until they've found someone crazy enough to pay the most inflated price, that together they could produce.

And equally, something else we talked about, and got into with Mar-... Sir Martin Sorrell on our podcast about the ad market was how on the other side of the ledger, the cost to producing these artifacts is so low. It's near zero.

So, the cost of coming up with the artwork to produce a digital artifact is the... Only really the cost of designing it for the artist. One doesn't imagine that there was a [00:28:00] huge, years of art school required to produce the Bored Ape. Right?

So how do you square those two things with the value that comes from exclusivity? The golf course, or golf club analogy you mentioned before, presumably it's because not everyone could join that club, even if they have the money, even if they're part of a community there because they...

You wouldn't bid up the golf course membership between two parties until it was so expensive that only the very richest could join. And equally, when you join that golf club, or any other community, you feel like you're getting something tangible, that there's some cost to maintaining the club, or cost to producing the artwork, or shared value for all the artworks that gives it that intrinsic value that...

And here, the cost of production is so near zero, how do you anchor that value will be lasting? So, I guess those are the big questions for me. How do you deal with the fact that you could easily, and you have easily, seen [00:29:00] artificial inflation of values, and if...

Even if those values are not... Are inflated, and they come down, how do you know they keep their exclusivity because there's nothing stopping Bored Ape Yacht Club from making thousands more of their NFTs?

Clement Pouget-Osmont: Yes. So for the first question, about wash, uh, trades, I think obviously it's a... It's a problem with NFTs, and, and crypto. I have seen this myself on the collection, was able to, to see it by... With my eyes, but I know it happens.

It also happens on traditional markets, like, uh, in the traditional art market, in the traditional finance market, so I think it happens more in crypto to be honest, but the term wash trade existed before, and it will continue to exist after.

And so, yes, it's a problem. Uh, it's easier to manipulate the prices in the cryptospace than somewhere else, so that's why you have to be... Have to be well informed. One common phrase, uh, is, "Do your own research." And [00:30:00] it's really important to take time before investing well in crypto, and, and make sure the project is reliable.

And even when you do that, you will end up with LUNA, or FTX, or it's... Obviously it's hard to, to avoid this kind of market manipulation. But with NFTs, it's easier, there is less money in... At stake, even if there is bigger collection, and it's easier to spot it. But yes, it's a problem. Yes.

Richard Kramer: But how do you cope with the fact that the cost of production is near zero-

Clement Pouget-Osmont: Well-

Richard Kramer: So there's nothing stopping from a popular NFT from having thousands more issued, and crashing the market? And you can't have that with stock in a company, or real estate, or handbags. I mean, who... Hermès can't not make millions and millions of Birkin bags, that's why they have this exclusivity value.

Clement Pouget-Osmont: Well, actually, they could. Uh, it's a strategy to do very few. Ferrari could do more cars, it's just their [00:31:00] strategy. And actually, it's kind of the same with an NFT collection. As you say, the Bored Ape Yacht Club could, could mean many more, uh, NFTs but if they do that, they'll lose the credibility of their community members, and this is everything for them.

So if they are doing that, they are lo-... Everyone will start selling their Bored Ape, so they, they won't have value. It's... So they have to, it's... They have to keep this, this trust that this community is feeling, so even...

And even if the cost is very low, and it's not zero because the cost of producing may be low, but there are a lot of marketing costs, actually, to run an NFT project. Also technical cost to develop this [inaudible 00:31:40] the website, a different application while you can interact with the blockchain.

This adds a cost to the marketing for it to maintain the community, engage everything. Uh, it costs a lot so the cost is not zero, but yes, theoretically they could print, uh, many more NFTs but doing this reduces the [00:32:00] scarcity so it's always a balance, uh, to find, to maintain that a good level of scarcity that keeps people engaged within the-

Will Page: Yeah. It's like if you build one too many houses, you collapse the property market, right? [laughter]

Clement Pouget-Osmont: Yes, exactly, yeah.

Richard Kramer: Clemont, let's turn to our final segment, which we call Smoke Signals, and we try to give our audience ways, or advice of how to spot bubble troubles ahead, and certainly heading into 2023, they'll... We'll see plenty more of those.

But it's those things that make you go, "Uh-uh", or "Whoops", or, uh, something that just makes you cringe. What signals in this world of decentralized finance, and tokenized assets do you think people need to look out for in 2023? [laughter] What makes you really-

Will Page: This is gonna be good, this is gonna be good.

Richard Kramer: Run for the hills.

Will Page: Allonsy. [inaudible 00:32:48] Let's go.

Clement Pouget-Osmont: [laughs] Yes, that's a very good question, and I hope I will give good advices. For the story I started... I bought my first, uh, bitcoins, uh, two years ago [00:33:00] in November 2020, so I'm not... Uh, I'm not a real OG, uh, from the beginning.

But still, that is, uh, what is good is that, uh, in 2021, we had two bull runs, so I've been able to learn from the first one, when it went very... Uh, it went very low, and then it went up again. So, I learned from the first phase, [laughs] where I kept my crypto all the time.

And then I was able to sell at a good price, uh, during the second, uh, phase of the bubble, and what's made me sell, actually, was the big amounts of, of shit coins, [laughter] like the doge, the meme coin, there was a lot of meme coins one years... One year ago.

And, uh, exactly at this point, if you go on my Twitter, I checked that the other day. I've sent, uh, like two tweets in December last year saying, "Okay. We do have a, a bear market." At this time, the prices were still very high, uh, but things were going completely crazy, like any, uh, meme coins add [00:34:00] millions of evaluation, and at this point, I was like, "Okay."

Uh, it's not... It's not Elsie at all, something, um... It, it was too many red flags when you... When you see every small project launching its coin, and its coin having millions of value. Well, I come from the startup world, and millions of valuation, it's a lot of work, and the- there are real things behind the level of, of stupidity on the market one year ago, really, uh... Really warned me.

Uh, so at this time, I, I sold almost all my cryptocurrencies I bought after, uh, even [inaudible 00:34:39] so I'm not a... I won't say I make always the best moves obviously, and you saw it with the llama, but this warning is, I think, important to follow. Um, this is a stupid market in both ways.

When it goes up, it goes, uh, really high, and you see... You see when things are becoming very stupid, [00:35:00] and at this point, I think it's good to sell. At the other end, I think right now, for example, um, people are really panicking, and, uh...

And it's maybe a good time to, to buy some. Obviously not financial advice, but... [laughter] But, uh-

Will Page: You don't... You don't... You don't have your thumbs up there.

Richard Kramer: Yeah. And a sec-... A second one?

Clement Pouget-Osmont: And, uh... And yes, the second one, it's more about NFTs, but if you are looking to invest in a NFT project, I recommend to be very careful about the gap between the promises, and the team behind it. Often, you see a very small project, while the team is not known at all, having very high promises, like, "We're going to build the Metaverse, and, uh, play to earn a game, we going to do merchandising." And it, uh... It smells bad, so, yes. Be careful about, about too beautiful promises.

Richard Kramer: If Mark Zuckerberg is promising to spend $10 or $15 a year on R&D to create the Metaverse, and still only has a tiny amount of players on Horizon Worlds, you know that anybody else saying [00:36:00] they're gonna build it on the cheap I gonna have a very hard time. [laughter]

Clement Pouget-Osmont: Exactly.

Will Page: Clement, I've got to say, I think only the French should be allowed to pronounce the acronym OG, 'cause the way that you said it was just beautiful. [laughter]

Clement Pouget-Osmont: Thank you.

Will Page: And Clement, [inaudible 00:36:15] we're gonna bring the podcast to a wrap here, but I think what's really important for our audience, having you on the show, and with this buzz and meaning around NFTs going high, then going low.

But if they were to contact you for financial advice, like your 8 million viewed post claims, what does Bulldog art do, what problems do you solve? If somebody was to go to your website after listening to the podcast, what would they learn about the work that you actually do for clients?

Clement Pouget-Osmont: Yes, thanks for asking. So basically, what we do is that we help companies, like traditional companies to construct a NFTs' experience, like we, we help them on the... Let's say on the strategy. What is the best way for them to enter the Web Tree space?

And [00:37:00] then we built technically the tools that they need. Uh, if it's NFT Collection, the website where people can, can interact with their NFTs, give utility to them, and, and so that is what we do. We help [inaudible 00:37:12] the Web3 so that they can use this new way of engaging with their community, and with new agents from the crypto space.

Will Page: Now, is there... Is there one company, or one client you'd like to point to as best practice, where it really worked out well?

Clement Pouget-Osmont: Well, for me, when, when... Good example, it's not our client, unfortunately, but, uh, it's, it's good.

Richard Kramer: Mm-hmm.

Clement Pouget-Osmont: We did... We did very well in the crypto space because they, they tried many things, and, and they have launched several collections and partnerships with P collection, uh, like a lot of literal characters. They also made a very cool partnership with Super Art Gallery.

So for me, it's a good example. You don't know exactly what will be the best way for your brand to enter the Web Tree, and to take advantage of it, but even a brand like Gucci tried different things [00:38:00] on trade and that, and they showed a genuine interest in it, and it went very well for them.

The people there, a lot... A lot of good, good, uh, feedbacks from the community, so I think it's, um... It's a good example of, of how to apprehend, uh, this new concept. You have to try it to test things, uh, honestly, and, uh, not just for PR, but with a real intention of, of connecting with the new generation of [inaudible 00:38:26]

Richard Kramer: I'd like to thank our guest, Clement Pouget-Osmont, for a fascinating [inaudible 00:38:32] about NFTs, and decentralized finance. We'll be returning to this topic many more times I'm sure. With that, I'm Richard Kramer, and thanks to my co-host, Will Page, for another great episode of Bubble Trouble.

Will Page: And most importantly, as we wrap up the final Bubble Trouble podcast of 2022, we want to wish all of our listeners across all the time zones, across the languages, a very happy new year.

Richard Kramer: [inaudible [00:39:00] 00:39:02]

Will Page: [inaudible 00:39:06] to all our listeners. See you in 2023, and watch out for those bubble troubles ahead.

Richard Kramer: If you're new to Bubble Trouble, we hope you'll follow the show wherever you listen to podcasts. Bubble Trouble is produced by Eric Nuzum, Jesse Baker, and Julia Natt at Magnificent Noise. You can learn more at BubbleTroublePodcast.com. Will Page and I will see you next time.