E83: XBorg Founder: How Crypto Gaming Will Change Your Life

0:00Bringing the next millions of people on chain is truly something I'm interested in. Why did you choose to build a gaming protocol? We saw the big announcement from Telegram with USDT becoming natively on the chain. That's going to be huge, but gaming is going to change the life of so many people. Louis Regis, the founder and CEO at XBORG. The world's largest player identity protocol in the gaming world. What is XBORG if you had to explain it to your mother? So what we do is we're building your online CV. The number of games you've played, the number of kills you've made on a specific game, we combine into one specific tool, which we call the Xbox ID, your online CV, if you want.

0:35Why is it so valuable to have an identity online? It's a proof of identity. If your identity is tied to your profile, you know, okay, this person is legit because he has such and such accounts connected and different communities vouch for him. So I know as a game developer, this person is legit, he's not abusing my game. What does it take to make money trading in crypto? So you have to be able to understand who is leading narratives and understand how the capital flows. What's the truth about exchanges and exchange listing? The truth is, like most of the tokenomics you see online today are guided by exchanges.

1:09But the exchanges have huge leverage over you. That's been my biggest disappointment in crypto. What's your biggest prediction for the next 12 months? I think meme coins are... What's your ultimate goal with XBorg?

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2:04And Astar Network, a scalable network connecting people to Web3 through entertainment, blockchain development, and community events. Amazing, man. Welcome to the podcast. Well, yeah. Thanks so much for having me. It's a pleasure. Yeah, it's been some time we've been talking and it's great to be able to make this happen. Who are you? I guess Louis. I'm French. 26. Been in crypto for quite some time. You know, for the, I guess, the best part of my life was just studying initially hospitality. then I've came to understand what finance was and then came to understand what crypto was and how big crypto was to finance and could disrupt the space and then that's I would say when it all started so I got super deep down the rabbit hole 2017 to 2021 onwards more so as a trader big meme coin participants and then came into the builder side in 2022 with XBORG.

3:10So yeah, I guess the person I am is today super committed to the crypto space, very passionate about the space, about building and adding value to the space. And then yeah, on the side, just I guess addicted to crypto. Trading. Well, you know, to be honest, my life these days is just 100 % crypto. And some gym here and there. Yeah, and gym, and gym running. But that's, yeah, crypto, as you know, is very consuming. Absolutely. You studied hotelry in EHL, right? École Hôtelière de Lausanne. Yeah. So you have a hotelry and business background, your first year there. I know that because my ex-girlfriend, my sister, they all went to hotelry school.

3:56the first year you spend literally cooking and you're making beds and all that stuff right so you start with that but you're building a crypto gaming company now like how is that even possible um you know i think that's my mindset of um so if anything you you want to do is uh somewhat achievable um you know first year at that school you have an internship uh funny enough that internship was in Abu Dhabi. So, you know, we, we, we actually here in Dubai, but like, um, Abu Dhabi and Dubai is roughly the same in terms of workforce. And I was very, uh, you know, I was at the really bottom of the ladder working with Indian people, you know, Filipinos, people that now serve, you know, us essentially, the guy that deliver food, et cetera.

4:46And, you know, I came to understand that, uh, it's not really the life I want to live. And, um, I also came to understand you have to be very humble because, you know, no matter your outcome today, you know, sometimes you can have bad days, but if you compare it to other demographics, it's, you know, I guess it's a whole lot different. And, you know, I've learned a lot from this, just working super hard because the experience that these guys go through and that I went through was very intense. And then from that point onwards, whether, you know, I came to understand that nothing can actually is out of reach today.

5:22Like you can, and I came from learning nothing about coding to actually, you know, coding, actually the first platform we built at Xbox, I was the only developer in this. I also came to contribute to like some large DeFi protocols like MakerDAO or like some other smaller protocols. And that came just purely out of, I guess, just hard work and being very curious. And yeah. there's something in Europe Switzerland Singapore it's less the case in US and UK but I would say like in countries that are known to be a bit where people are taking less risk which is whatever you study is going to define your career right yeah yeah that's I guess the thing I've learned is that the biggest risk you can take is not taking risks.

6:21And, you know, to me, you know, having no choice but to follow a given career path was super depressing to me. Like having your normal 9 to 5, although it's suitable to a lot of people, to me it was just, I could not do it. And so I had to find ways out of this. and I think if you look at some of the opportunities you have out there learning how to code to me was sort of boring freedom because it's today it's something that's hugely in demand and I knew following like a carry path in hospitality it's first you know everything is in real life like you have nothing online so you were bound to go to that 9 to 5 and to me you know quickly came to realize that true freedom can only be achieved in my opinion it was being achieved via being online and closest pass to getting there was okay software engineering is going to be super important and that's how I came to learn it basically leverage right you want to build a certain type of leverage Naval Ravikant talks about that right there's four main forms of leverage human capital It's kind of like the least efficient or least good one because the more you hire, the more you can kind of scale yourself, but it's kind of hard.

7:48You need to manage a lot of people. Then you have financial leverage, which is also kind of like, I mean, there is a lot in finance, which is why people make a lot of money, but it's also kind of not the new types of leverage. And then you have code and media. Media is basically what we're doing here, right? And then coding. Yeah, and I think... The bigger picture is I, from 18, I started my first company and quickly came to realize if you don't know how to code, you'll be limited. And that's why I refer to Freedom is because if I want to start a new project now, obviously I can't do the next like AWS.

8:29like you know there is a degree to which i'm not competent but like i'm doing any virtually any kind of marketplaces or or like just you know just basic computer science i can do it and back when i was 18 it was super i was super limited because every idea i had although they were great i could not execute on them or it was like super hard to find someone that you could trust and then you always had bottlenecks or like you would go to an agency and be like yeah yeah i want to i want to do this startup and then it's going to cost you this much and this much so at one point i was like you know i'm very tired of this i just want to do my own things and then you come to realize it's actually not that hard um with the tools we have online it's um and now we have like chat gbt and all it's like it's become super easy to actually do this stuff do you think it's possible to outsource the technological part when you start a company?

9:26Well, you know, you've discussed about leverage. I think if you want to have some big leverage, you have to have your in-house capabilities of building technologies. Because most likely when you build your own stuff, first attempts will be a failure. So going through an agency, they're not very agile. And their interests are not aligned. Yeah, definitely. They want to make the money and then be done as well as possible. Of course. I would say if you're non-technical, that's somehow the lowest hanging fruit. But then all of the companies I've seen doing this, then they come to a stage where either they don't have capital, so they can't pursue any technical developments, or the things that they've built was just not great and then they're stuck.

10:15And when I look to invest in projects, so I would never invest in a project where it's outsourced. Because, you know, first of all, you invest in the people behind. So if they can't ship the product and do it fast, usually agencies are very slow. Plus, the code they ship is of bad quality. So, yeah, to me, it's a no-brainer. You should just do it yourself. You love to trade. Yeah. Yeah, I guess... made a lot of money in trading and then um what do you mean by a lot of money i guess enough to not be able to you know care about working anymore that's uh that's what i would qualify as as big money so the interesting thing is you started as a investor or trader which is what a lot of people start in crypto right and then you came on the building side right yeah I think it's a kind of natural path for a lot of people in the industry.

11:16Luke Belmar was saying the same. Basically, first cycle, you go there, you do your thing, you get wrecked. Second cycle, you kind of invest or trade. Trading much harder, and you make some decent money, and then third cycle, you realize, oh, man, if I'm a builder, that's where the massive upside is. And also, you're doing something that's useful, right? Yeah. Yeah, in the early days, I think the biggest run was like 2021, BSC days. That was insane. Actually, yesterday I met someone I was chatting with on Telegram and we exchanged Telegram contacts. I did not know him in person. And then we were in this super niche alpha group with like 26 people and I met this guy in real life and it was just crazy.

12:03but um yeah it says bsc had like amazing opportunities where you could put in a thousand bucks next day you know one one day i was like up 36x in just one day it was like you know damn like what kind of opportunities that's unbanon smart chain yeah 2020 2021 yeah that was that was the that was the most insane run and i've seen it just a complete madness and how similar is what we see on solana now with no days well solana is very concentrated towards meme coins bsc was completely like it was complete insanity it was you know to me it's like at least an order of magnitude like 10x what we saw on solana um it was the early days were i i don't think we ever gonna see something like this where you literally had i mean i started with like, you know, 10 ,000 bucks and scaled it up to some crazy multiples.

13:07And that was all on BSE. But initially, like I'm not, so my background after this university was traditional finance. So I really wanted to understand finance because I do think that part of being free is being financially free because then you can do, or at least you don't have to to be bound to other persons and be stuck to your nine to five and and to me that's contrary to freedom but i'm i was not bound to be a trader like i'm i'm not actively trading the stocks market it's just i saw the opportunities and i also saw that there is huge asymmetries in the market um if you know the market the like the ins and outs of markets and you get to understand it, you get to understand the flow of capital, they are truly exceptional opportunities where it's not risk-free, but they are opportunities that gives you a certain edge and where you can have the best returns on any market.

14:14What does it take to make money trading in crypto? Because there is a huge... I think most people, they join that thinking, that's, hey, how I'm going to leave my 9 to 5 or I can go to the beach or I can just work from Bali or whatever but almost no one makes money trading in crypto. We have to be very honest. So what does it take to make money trading crypto? I think first is you have to lose it to understand what it is that you can eventually lose. So your podcast where you're talking about BitMEX, something similar happened to me. but you have to understand that first you have to be very humble to the market market can take you take anything from you in any moment um you know bitcoin going to zero tomorrow could happen um you know if you have like a nuclear war everyone could be deleveraged and we would all just i guess be down to zero if you have leverage but then you come to understand it's a lot of work um mostly today how the flow of capital can be understood is on crypto Twitter is there are huge influencers that essentially direct the market.

15:28And so you have to be able to understand like who is leading narratives and understand how the capital flows. So for example, recently the flow of capital was really directed to by events so for example the ai tokens did super well close to the nvidia earnings but also to the gtc conference which is the largest ai conference you also have gaming tokens that were doing very well up to the gdc conference and i think part of being very good at crypto is understanding how the capital flow at least in this part of the cycle because that you know we refer to like um sort of pvp we don't have retail investors yet so it's mainly the same sophisticated investors that go from one project to the other so if you want to how can you say that we don't have retail investors yet well you have metrics like um um coinbase ranking um is is is nowhere near where it was um you look at the number of views on on youtube of like patch called influencers um retails it's just simply not there and you don't have we don't have remotely any kind of euphoria outside of a meme coin market but a meme coin market is was purely directed by sophisticated sophisticated market participants not uh you know not the normies.

17:01Do you want to elaborate on meme coins? Do you think meme coins are a flavor of the month, a flavor of the cycle, or a new digital asset class? You know, I think meme coins are very... I have a lot of respect for meme coins. SHIB was my best trade ever. That's why you have a lot of respect. And, well, no, you have to... I think what you come to realize is you have to stay very humble. It's like you took something out of the markets. You need to understand the market can take it back from you anytime. And you see it. We had like a huge deleveraging event. And I saw a lot of friends that are like some of the biggest traders, you know, some managing more than nine figures.

17:49well like nine or like mid nine figures and just got completely blown up on on on like actually just a few few days ago i think meme coins at least the the way i view it this mark at this market is is saying we're tired of the usual vc um vc setup where you have a low float vcs at the end of the day are the ones that win and plus the team um so to me meme coin is a is a movement where you're saying retail investors it's like the people's coin it's like the retail investors can actually win um and and that's why i like meme coins it's very fair to a degree is it is it really um because i had look at it on the podcast yesterday we talked about how even a lot of these projects, MemeCoin included, he was like, man, I can't tell people out loud what's going on behind the scene, but it's disgusting.

18:47Yeah. Yeah, it's... So, well, funnily enough, I'm not sure I can actually mention it, but I had a conversation during token 2049 with a team that want to launch a big token, a big MemeCoin with like... It's likely going to be the biggest MemeCoin on a fairly known L1 that has no big meme coin yet. And so we'll be able to discuss about the inner works of this. But coming back on just meme coins, I think those are interesting. Another reason for it is the way the SEC is going after securities. I think if you look at meme coins, at least the way people view it is these will not be qualified as securities, at least for the most part.

19:34There is a big chunk of meme coin projects that are completely rigged, and we'll discuss about this. But I think, for example, Doge, there's a pretty high likelihood of Doge getting an ETF, just because there is no argument for Doge to be considered security, because there were no initial token offering. And lastly, what I will say on meme coins is, to me, this reflects how aggressive or how risk on the market is at the moment. So to me, it's an index, almost like you could view the NASDAQ as a proxy to risk on demands in the traditional markets. I think meme coins is, if meme coins go up, that means the market is willing to take some risks.

20:20So to me, it's a proxy to how risk averse or risk on a market would be. What would people invest in if they were not super risk on in crypto? In meme coins? No, you're saying basically that meme coin is a benchmark of risk-taking appetite, right? In crypto. Yeah. What would you see? What would we see if the appetite was not that big? Because I'm kind of tempted to challenge here a bit and say, maybe I'm just dreaming, right? Say, the big brains or the mid curves, let's say, they would say, oh, look, yeah, MemeCoin is like the big, it's a proof that it's a risk appetite. That's huge, right? I would maybe say, hey, maybe MemeCoin is becoming something like kind of new.

21:19Obviously it's going to go through like booms and busts, but that might attract more interest from people than the next AI coin or the next gaming coin or, you know, like, because you need to make all this research. As you said, there is VCs involved in most of them. You don't really have access to early deals. There is all these influencers. I mean, meme coins too, but like, at some point, I'm just thinking, for me, I'm just thinking very simply. People love to play lottery, you know, right? Or gamble since like many, many decades or probably, you know, more millennia. So meme coin is that, but it's much more fun.

21:56And therefore it might be just a new trend that started a bit with GameStop and then Dodge a couple of years ago, but now it's just... Yeah, well, yeah, and I guess that makes sense. I think an argument for this is also crypto is inherently very complex. And people like to discuss about the next, aka infra, or like, you know, parallelly VMs. And when you talk... People in crypto like that, but most of the others are like, what the fuck is that? So that's why, yeah, I mean, the average sort of market participant, like the retail investor if you talk like just basis trading or anything that's like sort of mid-advanced in crypto no one really understands so to them like at the end of the day they end up following what influencers say um and i think a big like big portion of them then just end up being like okay i invest in meme coins you know my dad is a good example of this where he would just trade those tokens and he has like you know he's a dentist um sort of very stable life and then he would just because they assume crypto is anyway gambling exactly what's the what's the you know what's the like meme cause is just another layer on top but like it's more fun but it's also like if you go in crypto as a retail and like you want to you're there to actually make a lot of money um like as a retail participant sure there is a a chunk they're like okay it's it's going to give me better um risk adjusted return so i need one percent of bitcoin but like here talking for example but but my friends like they want to have the the best return and so historically just meme coins are the one that outperform and so So sure, like AI stuff is sexy, like ZK roll-ups or whatnot.

23:54That's very sexy. But then if they want that, like if my friends ask me, okay, what token is going to yield the best return? It's likely going to be a meme coin. Now you're taking huge risks. But like if you were in 2020, 2021, like Doge in one day went up like 7x. It was a billion dollar token. Like it's just crazy. yeah i think to be extremely practical and honest to ourselves most people don't understand most of these like layer ones layer twos even me to be very honest and i interview most of these founders but i'm like yesterday again luca he was like man all these layer ones all these areas too but we're not building anything we're not building application yeah that are used going to be used by people we're just building this infrastructure here and there and so so people don't care so like especially in retail so they're just gonna come and yolo and what do yolo on meme coins and what's really interesting is i really see people were early in nfts they understand this thing really well luka had yatsu and all these guys they're like yeah but then i see big brains i see antony for example i'm sure he's gonna watch that and he's been always saying yeah for me i'm not really involved in that because he's almost too smart yeah to kind of accept that you can at least for him his own money right be like oh i'm gonna invest in that because there's no kind of like this there's nothing that's the thing and it's probably why he's gonna outperform right yeah well i know anthony does a bit um doubles a bit um but obviously not you know you don't you don't do you know half of your portfolio on this so meme coin is this thing where it's supposed to be very very fair distribution right which leads me to something i wanted to talk about because you have some experience there investing primary markets right so let's start first what's the difference what's the primary market and what's the secondary market well primary is everything that's before a TG.

26:07So before you launch a token, you have investment rounds, usually pre-seed, seed, series A. And usually it's on either just token or token and equity. Well, equity and token. That's the preferred format. And I would say that's where all projects start. You start with just primary market offering to VCs and then you do TG and then that's when retail investors can take part. The big things about primary markets is usually where the big money is. If you want to do insane multiples and if you invest wisely in the bear markets, that's usually where you get the best deals. And then usually what happens with all the projects launching on Binance is they had super early rounds.

26:55By the time you launch, investors are potentially up to 100x. And then retail investors buy in and then at some point in the cycle, then just because they are vested and locked, as you get unlocked and unvested, then you just, you know, sell. And I think that's a big part in how retails get wrecked is just, it's a dumb fest of just VCs just dumping on you at the end of the day. Do you think it's possible to make a lot of money in primary markets? in crypto, given how it's, especially at size. The reason I'm asking that is Arthur Cheong, the founder, CIO of Defiance Capital. He's done a lot of that.

27:45And they raised a new fund. And he said, we're going to do 100 % liquid token fund. I don't want to do anything with this primary market because it's not that much of a good deal. And he has amazing deal flow, right? Yeah, well, it depends on what. this time of the market is definitely not the work time um you have to because you're locked invested like time horizon of investing is pretty much like three four years uh to get your tokens fully uh unlocked invested um the thing is if you follow the normal um cycle time it you're not gonna have the full bull run to invest your tokens so that part of the cycle is definitely more interesting to raise a liquid fund.

28:29Now, if you were actively raising in the bear market, you know, in the depth of the bear market 2022, but like first part of 2023, that's where you have the big deals. Like you get the, like Athena, for example, you get these deals, Monad. And what's interesting is also when you get those deals early on, then you can sell before you unlock so you sell your claims or you you do otc deals so you don't have to wait for the whole markets to uh uh well the whole vesting periods to to to go as is like a lot of projects actually just selling otc their claims um so if i had to raise a fund now i would definitely do liquid because i think that's where the opportunities are but if we go into another bear market that's where I think the true opportunities are.

29:20And you only need one deal, like one large deal where you can put in size. Because if you want to do 100x on a 1 million placement, doing it liquid is going to be substantially harder than doing it on primary market. So yeah, going from like, I don't know, a valuation from like 50 million to 5 billion is something that's completely doable in the primary market. Secondary market, investing in a token at 50 million and it going to 5 billion is substantially harder. Also because there are issues with equity and all. Hey, when shift happens, family. Time to toast our partner, Devin. They're taking luxury wine to the blockchain with their super fun concept called Uncorked to Earn.

30:08Buy your favorite wines, enjoy unique experiences, and get an airdrop each time you open a bottle with your friends. Cheers to Divin for bringing transparency, authenticity, and exclusivity to the fine one's industry. Let's talk about XBorg a bit. That's why we are here today. Why did you choose to build a gaming protocol? You've touched about this when you mentioned Luca from Pudgy. There are a lot of great infrastructures. we're building it's pretty much like you're building a whole city and you're building the plumbing of that city and the highways you have no citizens or you have no cars and to me if I look at mass adoption I truly we've discussed a lot about trading and meme coins but I truly believe in crypto as a way to empower individuals financially they are 40 % of the population that's unbanked I think that crypto adds so much value in that regard.

31:17And so to me, gaming is going to be the big catalyst. We talk about AI, but AI is still a very big buzzword. But gaming is such a huge space that I think the path to mass adoption of crypto is likely going to be gaming. We saw the big announcement from Telegram with USDT becoming natively on the chain. That's going to be huge, but gaming is going to be changing the lives of so many people. And that's why, to me, gaming was very important. To me, it's the way in which you make, all you're able to make the most impact in the space. And that's why I think gaming really interested me, is bringing the next millions of people on chain is truly something I'm interested in.

32:11how do you build a leading gaming protocol when you have no idea about gaming you know i was i was a big gamer uh still like uh 12 to when i was 12 to like 16 17 gaming's been a big part of my life um i used to like yeah play a ton of games call of duty has been i was pretty much anti-social and um you know you know gaming i still do like gaming but um how much did you improve on the social side well crypto does not make it easier you know crypto gaming and um but like imagine crypto and gaming together my god yeah you know you you you can quickly just spend your plus trading you know trading is very anti-social um it's hard to go out when you have huge positions open but um you know just just a parenthesis here because we talked about that with irene zhao she was trading since two months or three months on leverage obviously you know leverage is ahead of a drug they call it like worse than crack um she was saying man i can't even take a plane anymore or i take a plane to connect to the wi-fi i'm going completely crazy so you said you know when you're trading with the reputation you can't go out yeah no a bit more about that like the negative aspect of okay maybe you make good money at some point because you understand but there is a lot of costs in your life oh yeah well I was the first to be a victim of this.

33:56Like now, like I did tremendously well up to now. Like I never thought I would have all of that. And I still look back at it. We had a small dump. So I also came to realize, okay, that can go. but um downside of of being in uh in crypto and i was doing a bit of leverage is yeah um afraid of being uh on on a plane that's that's that's a big one where i was on emirates and just the the wi-fi was not loading and you could see me just trying to refresh and i go to the portal it was just simply not working and uh when you don't have a project that's fine um I guess your mental health take a hit. But when you have a project, and now we have like 25 people within the team, I'm accountable.

34:53You know, I have to be there. And to me, it's just super silly. But one good example is we were at my apartment with the girlfriend. And I thought, okay, let me order a massage for two. You know, you can do it on the app. And imagine you have a portfolio value of like a million. And I was on average. Within like 10 minutes, portfolio went down. So if you imagine a million, it went down to 700 ,000. So 10 minutes minus 30 % drawdown. And I was just panicked and I was feeling very ashamed because girlfriend is here. So it's not really what you want to show. It's terrible. And the massage ladies came in and I said, yeah, you can just go.

35:45Like, go. I'm not going to have this now. I was just panicking. So that's the downside. And I guess I'm not very proud of this. And you learn every step of the process you learn. And then you also learn to take a step back at it. And I think the worst part is most people, they come in, they make a lot of money. they become very stressed uh like when yeah the red flag is when you want to go to the wi-fi so you won't check how you're doing it's usually a time to go out uh and to to exit the markets but usually people just end up losing the money so they they work super hard for like a year or two you stress a lot you destroy your mental health physical health your relationships all for nothing at the end.

36:35If you like the sum of everything, maybe you were even below what you started with, right? Yeah, well, I had a, it's not a good friend. It's just someone I know. You have one in front of you. Yeah. Who experienced that? He was, yeah, like last diverging events, lost 120 million and that's all he had. He was cross-margined on Bybit. And yeah, big week down and you're down 120 million. That's, and then just, so that's why I say you have to be very humble because even if you're like leverage, like 2020 COVID events, if you were leveraged by what, even 20 %? like let's say you had like spot position and then you collateralize that in leverage with like i don't know 20 uh premium like on top of your spot position you would have gotten liquidated that's how it was and uh that's why now i'm just um my profiles become at least now just risk off um so just spot i i don't i don't look at it so much because um because i want to ask How do you trade while building a crypto project at the same time?

38:02It's almost impossible. I study every, I guess, just every morning. It doesn't take so much time. Most traders just lose time. Looking at the market, looking at graphs, my view is more, I've never taken short-term bets. It's always been, well, short-term as in day trade or trades within the week. I always look at the big narratives and look at the big catalyst and I try to understand where the flow of capital will go within that period of time and for example when I look at memes that were going to rally, that's when I went pretty much all in on Pepe and that's where I made most of the money this cycle Same for me actually best return from Pepe I had the best run of my life on Pepe