The Power of NFT Fractionalization with Benjamin Rameau from Jenny Metaverse DAO

HOST:  Hey, everybody.  Welcome back to the Unstoppable podcast.  I'm Diana Chen, your host, and I'm here today with our guest Benjamin Rameau.  He is the founder of the Jenny Metaverse DAO, and also the founder of Smile Research, and a partner at Three Commas Capital.  Previously he was in finance, Deutsche Bank.  So, he's got a very, very impressive resume, but today we're going to be focused on talking all about Jenny Metaverse DAO. 

I recently had Leia Fisher from Uniquely on the podcast, and Jenny Metaverse DAO is the first DAO and social token built on Uniquely.  So, I'm really excited to chat with Benjamin more about what the Jenny DAO is all about, how it got started, and give you guys a deeper look into what that's all about.  So, Benjamin, thank you so much for being here today, and I'm really happy to have you here.

BENJAMIN RAMEAU:  Hey, Diana.  It's a pleasure.

HOST:  Great.  So, before we dive into talking about Jenny DAO, I want to know a little bit more about your background.  You've obviously been in the space for awhile, you've done a lot of different things in crypto, but I'm wondering what was the first entry point for you into crypto?  What was that thing that grabbed your attention, and then how did you start learning about it initially?

BENJAMIN RAMEAU:  Sure.  So, I started looking at crypto around 2016.  I had some friends who were working at Block One and before developing EOS they were looking at Bitcoin to try to create all kinds of funky stuff.  Then they started getting to EOS, and EOS we know nowadays is not a very good project, but four years ago it did look pretty exciting and it was attracting a lot of intelligent people.

They had a team which was named the Ghostbusters which was there to find bugs in the code, and one of the guys on that team was a 16-year-old high school student called Jae Chung who found a whole bunch of bugs, and he eventually became sort of - - that when they launched Main Net, I don't know if you remember, but EOS was delayed by a couple of days, and apparently the reason was that they needed his help to launch Main Net.  So, I think it says a lot of good things about Jae, but probably also raises a lot of red flags about EOS when you know that the Main Net was delayed because a high school student was not available. 

But when I heard about this I figured that I should get in touch with this guy Jae and we became good friends, and now have been working together on all kinds of stuff over the past four years, and he's become a partner now for the Jenny Metaverse DAO.

HOST:  Such a cool story, and super impressive that a 16-year old played such an integral role in such a big launch.  Cool.  So, when you first got into it back in the day how did you start learning about it?  Because there weren't as many resources back in 2016-2017 as there are today.

BENJAMIN RAMEAU:  Yeah, I think owning crypto 2016-2017 is actually very similar to owning NFTs nowadays, because defi has really changed everything for the way we invest and hold crypto today.  Back in 2017 people were owning assets while they were going up, and when they were going down there was really nothing people could do with their assets, so it was really a race on the way up and a race on the way down. 

It's really during the bear market of 2018-2019 that people built the infrastructure which made it possible to have a second wave which became much bigger than the one trillion dollar market cap wave that we saw in the first episode of the alt coin bubble.  Nowadays, even in the bear market that you've seen over the past month, it's really quite surprising to see that defi TBL has been relatively stable. 

Yes, it has come down, but it's come down only in order of magnitude to the same extent as the compression in Ethereum and alt coin prices, which means that people who are farming are not really taking their assets out of the system, and it gives me the confidence that it's possible to have a rally that's going to continue through the rest of the year.  But in NFTs right now there's really nothing that you can do with your NFTs other than admiring them, and in some cases passing them and taking care of them as you would maybe - - . 

But it's relatively limited, and all the things that people love to do in efi like staking and rehypothecating, and yield aggregating, and using as collateral for loans, and all these kind of things that people love to do, and really forces people to stay over the long term doesn't really exist in NFTs.

When that starts happening, that's all going to happen around fractionalization.  Once you get fractionalization of NFTs then all these things that people like to do like staking and yield aggregating is going to become possible.  So, I think comparing 2016-2017 to nowadays, and NFTs actually is relatively similar, and I hope that the Jenny Metaverse DAO and protocols such as Uniquely will allow us to get a step beyond that and get into the efi revolution.

HOST:  For sure.  So, I want to unpack some of that for our listeners who may be a little newer to the space, and because we're going to be talking a lot more about NFT fractionalization in the rest of this interview.  So, why don't you just back it up a little bit, and for the people that are newer to this space, explain what NFTs are.  What are some of the problems that we're seeing with NFTs that make them not accessible and then how does fractionalization of NFTs solve for some of those problems?

BENJAMIN RAMEAU:  Sure.  I think first in terms of what makes NFTs difficult, buying and collecting NFTs is a very tedious process.  I think it requires a lot more research than just buying normal fungible tokens because there's all these different rarity traits and the fact that they're specifically non-fungible.  Every NFT is different.  It requires you to re-look into every single one.  So, owning and collecting is a time-consuming and difficult process, I find.  We at the Jenny Metaverse DAO have tried to solve this buy bringing crowd wisdom. 

So, there's a lot of NFTs that I have not come across that have gone into the collection, which I think have had a lot of value, and this has really been thanks to our community which has some of the best minds in the space and have been able to make their contribution.  The other difficulty with NFTs is lack of equity.  So, once you own it, it's difficult to buy, but it's also difficult to sell, and in a fungible token model you've got hundreds of buyers and hundreds of sellers, or thousands of buyers and sellers, and you've got transactions happening all the time. 

When you're talking about collectables you need one buyer and one seller, and they need to agree on a time to do the transaction and on the price.  It's really a huge coincidence of wants that has to happen for any NFT transaction to occur.  When you fractionalize NFTs you give people a lot more flexibility into the number of people that they can transact with and the timing that this will occur.  So, I think that the system that we've built really helps people to collect the NFTs that they want, and also to dispose of them when they hope to do it.

HOST:  Yeah, and for people who are maybe thinking the thing that makes NFTs special is that they are unique, and there's only one out there that you could potentially have, and when you fractionalize it and have a collection of thousands of the same NFT, does that diminish the value of NFTs at all in your mind?

BENJAMIN RAMEAU:  Good question.  For some people, it will.  I think for some people owning that one thing that nobody else owns is going to be very special, and fractionalization is not going to be an answer to that.  There's something very special about NFT ownership, because if I went around and asked people to sell their ERC 20s and if I'm willing to pay the right price any token out there, I'll get 20 people to put their hand up and offer me an block sale. 

If I do the same thing for an NFTs it's going to be very difficult to find that person who's willing to sell.  You'll probably find that with NFTs even if the person manages to sell the NFT as a kind of profit, there will always be a little bit of regret.  You'll never find a happy person on Twitter saying I sold this NFT for a very good price.  So, I think there's generally a lot more emotional attachment to NFTs than there is to other types of tokens.  Bitcoin might be an exception.  

I think Bitcoin is a little bit special.  It is fungible, but I think people do have emotional attachment to the Bitcoins.  But you'll find probably with almost any alt coin that you'll very rarely find a sad person who managed to sell at a profit.  So, for that reason, yeah, I think fractionalization on NFTs does create a very different emotional attachment to the things that you own.

HOST:  Yeah, for sure.  So, let's go ahead and dive into Jenna Metaverse DAO.  I want to know how it all started, so tell me the genesis story about it.  How did you get the idea to form Jenny Metaverse DAO, and what inspired that initial idea?

BENJAMIN RAMEAU:  Sure.  So, I've been working with Jae from quite a while back.  He was at Wharton.  He dropped out to focus on this project.  We thought that NFTs would be something very big.  So, we were incubated by a company called Animoca Brands, which is now the kind of NFTs.  2021, NFTs are a very hot topic, but for the past three years, really since the end of crypto case or the bursting of the bubble of crypto case, NFTs have been a pretty boring space. 

But Animoca had a vision and they believed in digital ownership rights, and they thought that the NFTs would become something really big, and they just stubbornly kept on investing in all the major players in the space, to the point where now it's become the dominant player globally in NFTs.

So, we got a lot of support from Animoca Brands, and we've been looking at the fractionalization space.  I've been doing a lot of defi farming myself, and I've just been exploring looking for the right fractionalization protocols, and there have been a few of them.  They all had some kind of game theory problems, and most of the game theory problems lie around the ability to fractionalize multiple entities at a time while still recognizing that every NFT is different.  The reason this is tricky is not only the fractionalization part, but in the de-fractionalization part. 

So, taking your shards and getting back a claim on the NFTs, and getting a claim on that specific NFT that you want, and no other one.  When you've got millions of shards, billions of shards, and a limited number of NFTs, every one - - is different can cause some very complex game theory issues.

So, we looked at all the different protocols and came across Uniquely, and we came to the conclusion that this was going to be the winner, and we wanted to build on top of it.  So, we issued the token, we raised money, and 70% of that money was used, or is used, for acquiring NFTs.  So, the community decides, makes proposals to buy NFTs, then they go through a vote from the community.  With majority rule, the decisions are passed.  The funds themselves which are earmarked for acquiring NFTs are held by a multi-sig, and the multi-sig is held by representatives of the community who are there to enact the wishes of the community, of which only myself and Jae have a minority of the votes. 

So, you've got decentralization on really three layers: first on the proposals, then on the voting of the proposals, and then on the execution of those proposals. 

HOST:  Got it.  So, basically, whoever is part of Jenny DAO, if they see an NFT that they think would be really good to buy they can submit a proposal saying I think we should buy this, and then the community votes on whether or not to buy it, and if there's a quorum I assume--I don't know what it is, actually, more than 50% or whatever you have it set to, then the DAO will go ahead and--

BENJAMIN RAMEAU:  Exactly.

HOST:  Is that how it works?

BENJAMIN RAMEAU:  The results have been quite interesting.  The first NFT, we just had to kickstart things, and the first NFT I was involved in getting the proposal through.  Not the vote, but the proposal, and this was for an NFT from Steve Aoki and Blau.  They did an amazing job.  They had this song, and the song called "Jenny," it's custom made for the Jenny DAO, and then you've got this robotic voice that says, "Hello, I'm Jenny," and it's a really cool song.  It's actually something you'd like to listen to on a radio or in a club or something. 

So, back then I was active in helping select and purpose the committee, but afterwards I've really been very hands off, and I haven't been directly involved in any of the purchases since.  But what's really interesting is that the community has really taken a mind of its own and has come up with all these other NFT ideas which are very closely linked to the whole Jenny theme. 

For example, the inverted Jenny is a stamp, it's an American stamp but they printed it and made a mistake and printed the airplane the wrong way around.  Back in the days when every color on a stamp had to be done on a new print, and somebody just misplaced the paper and did the wrong way.  So, it's a famous stamp, and it stands for a long time where it's probably the largest collectable assets, and it just shows that every collectable is unique and special, and some are extra unique and extra special because of, in this case, a printing mistake, just like NFTs. 

But the community has come up with all these different proposals which could be tied to the whole Jenny theme.  One of them, for example, was the Yat. It was two emojis, smoking hot, so cigarettes and a flame emoji, and the idea there was that Jenny is smoking hot.  So, that's one idea that they came up with.  Another idea that they came up with was to get the CryptoPunk of the pilot, and the pilot is female and she's smoking like the Yat, and the pilot links to the whole airplane theme.  What the DAO ends up buying in the future, I really don't know, I'm really excited to see.  I think the DAO itself is coming up with much better ideas than I could ever come up with.

HOST:  Yeah, for sure, that is super exciting.  So, I want to talk about your launch, too.  The very first time that you announced to the public that Jenny Metaverse DAO was happening, you guys had a pretty unique launch, and a very successful one.  Can you talk a little bit more about that?  What was the thinking that went into how you wanted to launch, and then what made it so successful?

BENJAMIN RAMEAU:  So, I think it's been unique in a few ways.  One of them is that we did not have a public sale.  Instead of a public sale we had--we didn't have an IDO, we didn't have anything like that.  What we had was the community which voluntarily decided to provide liquidity.  So, we had a community-run liquidity event instead of a public sale, and 80% of the token buyers from the private sale voluntarily agreed to provide liquidity on day one.  I've never really seen this happen on any other token before. 

You probably expect that kind of behavior from some of the larger funds, people who are really used to farming on defi, but what we saw with Jenny DAO is that even a lot of the KOLs, for example, who are not traditionally known for being long-term holders, voluntarily decided to stake their assets.  I think that was a very surprising experience, and from day one we had about $9 million of liquidity in the pool, which brought the Jenny DAO definitely on the map.  I think there's very few DAOs with that kind of liquidity depth from day one.

The other thing which was very unique in our model was that there was full vesting from day one, and that too haven't - - elsewhere.  So, my personal view is that these lock ups and vesting schedules are not a good thing.  What ends up happening is that you're kicking the can down the road and just postponing the inevitable, which is that dumpers are going to dump, and you end up restraining their behavior and creating an artificial price. 

Over and over again we've seen tokens with extremely high prices on the first days and has the vesting schedules go through, the price gradually comes down, until sometimes it hits zero, and that's really not a good thing, and it doesn't help anybody, and it doesn't help the new virus, either. 

To make a truly fair system, I think that we need to wash out the numbers as quickly as possible and allow the new buyers to come in at a price which is not artificially created by artificial supply demand conditions.  So, I think those two points about the vesting schedule and the voluntary community-based liquidity make the Jenny DAO very special.

HOST:  Got it.  So, if somebody wants to join the DAO, what would be the process?  Would they just go online and buy some UJENNY tokens?  Is that the first step?

BENJAMIN RAMEAU:  So, anybody is welcome.  It's open protocol, anybody can come and join.  You buy a UJENNY, you get access to special events, access to thought leaders, to artists, to all this kind of exclusive content which are being developed, and then you also get to offer proposals, and most importantly, be able to vote on those proposals.

HOST:  Gotcha.  So, what you were saying before is that the price of a UJENNY token stays the same forever?

BENJAMIN RAMEAU:  UJENNY can go up and down, but it will go up and down based on 100% full vesting from day one.  So, it's not a price where you've got X price on day one with only 5% of tokens in circulation, which sometimes the founders control and are able to move in their favor.  At this point, anybody who wanted to sell their tokens could have done it.

HOST:  Gotcha.  Okay, very cool.  Then going back to another point you made earlier, you said that you looked at several different protocols before deciding to build on Uniquely.  What was special about Uniquely that made you choose that over other protocols?

BENJAMIN RAMEAU:  To have a good fractionalization protocol it has to be fair and efficient.  So, fair means that every shard holder needs to be treated equally, and efficient means that no single shard holder can block the whole system.  You have to do this while recognizing that every NFT in the world is unique and irreplaceable.  Some of the other protocols either only let you fractionalize one NFT at a time, whereas Uniquely, what we liked about it was the ability to shard multiple entities at a time.  Some protocols only let you fractionalize collections of multiple entities, but with very, very similar features. 

So, if you've got only CryptoPunks only worth a certain price range then the system works, and Uniquely allows you to fractionalize collections with a whole variety of entities inside, so not just reaching from different contracts, but even, for example, having one NFT from an ERC 721 and another one from an 1155.  One CryptoPunk and one Beeple.  One very cheap entity, one very expensive entity, and this is possible on Uniquely, and I think that really makes it very different from anything that's out there.

HOST:  Gotcha, gotcha.  Very cool.  Then what is the relationship between Jenny and Uniquely now?  Because I know Uniquely has their own tokens too.  Is there some connection now between the UJENNY token and the Uniquely token, or are they totally separate?

BENJAMIN RAMEAU:  The Jenny token from day one was fractionalized on Uniquely.  Even before the vault had entities in it, the utopian cells had been created on the Uniquely protocol.  So, from day one there already was a relationship.  The owners of Jenny are able to stake into the liquidity pool their Jenny tokens with Ethereum, or with Ether, and receive unique mining rewards, and this was not a decision of the Jenny DAO, it was a decision from the Uniquely community.  The Uniquely community comes up with new rewards structures or point balancing every couple of weeks, and so far Jenny has been up there.

HOST:  Gotcha.  So, looking ahead, zooming out a little bit and just looking at the NFT ecosystem as a whole, and the DAO ecosystem as a whole, what do you see happening in each of those ecosystems in the next year that you think is really going to be very exciting for people and that people should take note of, and then I'm also curious to hear your thoughts on where you see NFTs and DAOs being in the long term, like in 10 years, for example.

BENJAMIN RAMEAU:  Yeah, good question.  I think Jenny DAO is in a very special position at the moment because I think we've gone into a mini bear market, or a small correction.  The NFT market itself has partly dried up, and this actually represents a huge opportunity for the Jenny Metaverse DAO because it has funds to spend, and the DAO started off with about $5 million of assets, it spent about $1 million, it has about $4 million left. 

In the world right now there's really very few people who have $4 million of dry powder to spend on NFTs.  But I also think with great power comes great responsibility, and that's put a lot of pressure, and I definitely hope that the DAO comes up with proposals which are really able to support the NFT ecosystem and bring it forward. 

For where NFTs are going to take us, I think it's really going to be extremely exciting.  I'm convinced that NFTs will be a multi-trillion-dollar asset class, and that the main hurdle to get there is NFT infrastructure, and uniquely I think is going to be a pillar of that infrastructure, and that the Jenny Metaverse DAO is contributing to the Uniquely ecosystem.  But once you get the infrastructure I think the potential is going to be massive. 

Right now you're seeing collectables which have already showed their use case properly.  Gaming is starting to get there, so you've got games like - - Delta Time where you race a car and your car is made of different components like tires and engines, and each one of these is NFTs.  I think the whole idea of a metaverse is extremely exciting, so companies like Sandbox, what they're doing is really awesome.  You have to remind yourself there's people still debating whether Bitcoin is real or not, and meanwhile they're missing the point that it's already a whole parallel economy which is being built on, on the metaverse, and that parallel economy is going to be best on blockchain technology. 

So, I think these are all use cases which are starting to become apparent and are really going beyond just the testing phase.  But what's really going to take us to a multi-trillion-dollar economy is not going to be expensive Beeples and CryptoPunks, it's going to be real-world assets and financial NFTs.  Real-world assets, I say that because the best link between representing something in the real-world and representing something in the blockchain world or virtual world is going to be done through NFTs.  I think it's going to be very difficult to do that through fungible tokens. 

The financial NFTs are already starting to take off, and I don't think people are giving enough attention to that.  When you look at Uniswap V3, for example, where every LP position is represented as an NFT, when you look at these quasi-NFTs like compound debt position, for example, which is not represented as a token but is a non-fungible, non-tradable position, and this could be represented in the future by tradable non-fungible tokens. 

When you really put that all together, I think it's really going to be inevitable that NFTs are going to become a multi-trillion-dollar asset class, and will eventually probably surpass the size of the fungible token market.

HOST:  For sure.  I love that.  So, if you put yourself into the future, and say it's the year 2030, how are we interacting with NFTs?  How are we interacting with DAOs?  Have DAOs just completely permeated our ecosystem?  Have they completely replaced companies and our traditional organizations?  Does everybody have an NFT collection?  How do you envision?  Maybe in your ideal situation, what would it look like in the year 2030?

BENJAMIN RAMEAU:  Sure.  So, in 2030 I'll be pretty old, so I think there's probably going to be a proposal from the Jenny DAO to send me to the retirement home.  Yeah, I think our lives in the metaverse is really going to take off.  So, I've got a much younger sister and she plays ROBLOX all the time, and she spends a lot of money on it.  When I grew up I didn't even have a PC at home.  I grew up in France.  We had a Minitel.  So, the Minitel was before the internet became common. 

Everybody in France was issued for free a small computer where it was so slow that when you would type you would actually see the letter spell itself on the computer screen.  So, back then we had no blockchain, no social networks.  But for the new generation I think things are very different, and for somebody who's grown up from the age of 6, 7 playing ROBLOX and spending money on items like new dresses and bakeries for their character, and socializing and interacting in this whole virtual world, it's going to become a very natural thing to have a parallel life and parallel economy all based in the metaverse. 

When you start getting to those worlds which became very real, governance will also become very real, and will become probably as important as governance we see in in the physical world, but where people actually have a lot more influence.  I think sometimes we feel that in the real world it's difficult to have influence over some important things that control our lives, and we can actually build a new metaverse world where each one of us is a lot more empowered.

HOST:  Yeah, I love that.  I totally agree with you.  I think with the new generation the metaverse, it feels almost as natural as the real world.  So, it's not this huge strange thing that I think some of the older generation is afraid of happening in the future.  I think it will just happen very naturally, and I definitely see the metaverse being a very big part of everybody's lives in 10 years from now.  So, I'm totally with you on that.

All right, Benjamin, this last segment I call Explain Your Tweet.  This is where I go through your Twitter and pull out some interesting or cryptic tweets.  Most of your tweets are pretty straightforward.  There's a lot of retweets of good stuff on your Twitter.  But I did want to call out this one that I thought was really interesting and caught my eye.  This is from May 19, 2021. 

It's a quote tweet of start crypto, which the original tweet was "the world's first physical crypto art gallery will soon unveil in Hong Kong's cultural retail landmark K11 MUSEA" and then you said, "I'm very excited to be working on the world's first visible crypto art gallery at K11 in Hong Kong."  Super cool.  So, I know this is becoming a thing, like physical crypto art galleries, but I think it's still very new.  So, can you talk a little bit more about what is this physical crypto art gallery in Hong Kong, and then how did you get involved with working on it?

BENJAMIN RAMEAU:  Yeah, sure.  So, I've got friends who are starting up this gallery, and I'm not a creative person myself.  I can't really call myself an art critic, but I love surrounding myself by the more creative types.  I think NFTs, I understand the numbers aspect of it.  For me, combining defi and NFTs is very intuitive, but I've got something lacking which is the ability to really put this in an artistic context. 

I've got one person who's an advisor who's helping me a lot with that.  His name is Roberto Straccia.  He's a real artist.  He actually owns real galleries.  I think he owns a gallery in Shanghai.  He's been doing this his whole life, and he really understands the importance of the artistic component in NFTs, and I think when we go through proposals, or in the future when we come up with new proposals, having a guy like Roberto onboard is very important.

But to understand the meaning of an artistic entity, I think it's important to put it in context and how people will be collecting an owning it.  Rather than just looking at these dot com and open sea and connecting to the APIs and trying to figure out what an NFT looks like, I think these friends I have had this cool idea of coming up with the first, or if not the first probably the nicest NFT gallery in the world.  It's going to be using new technology to display it, to show it, and to share the message with people who are not just from the blockchain space, but who are maybe more traditional type of art collectors.      

So, I don't know if you know K11.  It's out on the Kowloon side.  It's probably the nicest department store in Hong Kong.  So, we've got a store right between Cartier and Macallan.  So, if you drop by Hong Kong we'd love to have you for the opening ceremony in a month and a half.

HOST:  I would love to be there.  That would be amazing.  I don't think that's going to happen, but that would be a dream, I would love that.  Love Hong Kong and I can't wait to go back sometime once the world is more open and everything feels a little safer and back to normal.  But very cool story; I definitely am going to go check it out one day.  Good luck with the launch, I think it's going to be super cool.

BENJAMIN RAMEAU:  Thank you.

HOST:  Well, Benjamin, thank you so much for taking the time to come on the podcast today.  Before you go, just tell people where they can find you if they want to connect with you personally, and then also what's the website or where can people go to buy some UJENNY tokens and get involved in the Jenny Metaverse DAO?

BENJAMIN RAMEAU:  Sure thing.  So, the website is Jennynft.io, and my name is Benjamin Rameau, R-A-M-E-A-U, and you can find me on Twitter.  If you want to buy the Jenny token, don't buy it, but if you do buy it, you can buy it on Uniquely.

HOST:  Okay, awesome.  Well, thanks again so much, Benjamin, for being here.  Listening, thank you for tuning in as always, and we'll be back again soon with another episode of the Unstoppable podcast.

BENJAMIN RAMEAU:Thank you.