Shayne Higdon on growth of the Hedera ecosystem

0:01I'm Ashton Addison from Block West capital for investment pitch media and today on the Crypto Coin Show we have Shane Higdon the CEO and co-founder of the hbar foundation Shane welcome to the show and thank you so much for taking the time thanks Ashlyn it's great to be here likewise I've been following hedera for quite a while now and a lot of great

0:22projects that are built on the hedera ecosystem have come on the show as well so I'm fascinating to hear about the foundation and how you're helping companies and the hedera network itself grow so thank you so much for taking the time let's just dive straight into it with a high-level overview of what is the hbar foundation and how are you helping grow the hedera network

0:45great question and we have when we started the H bar Foundation we knew that hedera as a DLT was unparalleled technology in the crypto slash blockchain space for a few reasons you know it's speed it's security and the fact that it's the greenish chain out there nine times nine thousand times more efficient than is ethereum and the more used you get out of the

1:12network the more efficient it becomes and so we felt that there was this need to continue to build an ecosystem at the time we did this the technology around adero was still a patented closed source as of the end of last year August 5th it became fully open source and so we have been really expanding the developer community in a big way as an ecosystem

1:38funding infrastructure projects as well as many many dapps and so what we've been focused on is just that we've been focused on incentivizing the builders the dreamers Etc to build on top of what we believe is the best chain out there and you know that's largely through grant funding but it's also we give them technical as well as marketing support

2:01along their Journey we decided to really focus it very much like a venture capital organization in the way that we've structured ourselves so we've got six different funds for Maine funds and then two smaller funds the first one was the crypto economy fund focusing largely on crypto infrastructure making sure that we had wallets and exchange listings and all

2:28the things you know defy as an example that was defy was something that the chain didn't have when the foundation started and we funded several projects there I can go into more detail in a bit the second was the metaverse fund and this really is focused on not just gaming or metaverse in particular but Brands looking to extend loyalty and loyalty engagement of their users we've

2:55got several different metaverse opportunities that we funded there then we've got the payments in fintech fund it is what it sounds like you know anyone who's tokenizing assets and or looking at cross-border payments payment settlement facilitation Etc and then finally we've got our okay this distance

3:29manage all of the carbon credits carbon offsets and we funded several marketplaces this is an area right now much of the team is at the world economic Forum focusing on that and then we've got two smaller funds one is the female Founders fund so we wanted to invest in women who own at least 30 percent of the projects or companies that they are investing in or building

3:52and then finally the identity decentralized identity knowing that's going to be a big element for the future we wanted to fund many projects in that respect so those are the six funds and how we've allocated Capital one more data point and then I'll turn it back over to you and that is that we have over the course of the last year we have funded just about 200

4:18different projects deploying a little over 350 million dollars of funding despite this bear Market wow incredible Shannon thank you for laying that out with all the different funds and I knew there was some kind of pivot you know following hedera for in the years past and in the prior cycle and then all of a sudden seeing like a huge explosion of all these different

4:40decentralized applications and now I'm putting all the pieces together here and like it's incredible to see the growth on the hedera ecosystem as of late especially in the bear Market as well you know as you mentioned just investing so much heads down building during the bear Market it's great to see all the applications coming out in all these different Industries as well I'm

5:00excited to dive into some of them I'm curious from a high level you know in investing and helping all these different projects obviously to have good applications the developers need to develop those applications and hopefully easily to incentivize more people to build on hedera what is the you know besides like providing them grants and funding to start developing on hedera

5:24how easy has as the ecosystem made itself to start developing or to transfer development from other blockchains or from traditional developers to start moving on to hedera and like easily build something to move it into production so when we started as you know as I as I mentioned we worked fully open source we were open review and so now we are 100 open source down to the kernel the

5:51key algorithm specifically for hashgraph and so I think we've seen a significant amount of projects we've seen projects now specifically lately astronova moving from ethereum it's a gaming platform moving from ethereum to us we've seen cosmium which is another AAA game moving from Solana to us some of our projects are building migration utilities to make it easier for folks to

6:19to move from other chains to us we needed some of the infrastructure building blocks Plumbing whatever you might want to call it that we developed earlier this year and I say we I mean we as an ecosystem not just we as a foundation one of our ecosystem Partners swirls labs during the year we had we built those you know building on ethereum to move

6:46that over we continued to extend developer tool support to things like metamask and other developer tools we continue to do that we know we need to make it easier for folks to migrate from one chain to the next the other thing that we've done is we've continued to secure the network so this year we also rolled out native staking and Community

7:08nodes are going to be coming right so as we think about many organizations we are different than most exchange out there in terms of our governance model today we've got 27 governing council members ranging from the likes of Aberdeen which has you know they're a 508 billion dollar asset under management that is looking to tokenize assets they're going to be tokenizing

7:34their money market funds first their real estate funds later all on hedera all the way to a company like service now who is allowing organizations to look at you know ESG reporting and carbon footprint tracking you know specifically on their now platform and everything in between from Google to you know Ubisoft and gaming Etc and so as we think about

7:59those governing council members do you know are here that's who's typically been running those of the networking governing and now we're moving into you know knock on wood you know you know cautiously optimistic in the coming days that we'll have the community knows being run very cool and you mentioned at the beginning about the grant funding

8:23and you know helping accelerate these projects and the fact that the foundation is working it you know like a VC firm it's like make sure you allocate the capital efficiently and properly which I think is great I'm curious if you can dive into that a little bit more in terms of if there's projects that are just in incubation maybe they're not even launched yet or maybe there's one

8:44moving from a different blockchain at What stages or you know what green flags what criteria do you look at in terms of how you're going to fund a project or give them Capital to start launching onto their so we like a VC would look at various project stages now typically you segment your Venture Capital work into seed stage early stage late stage types of

9:12investing we're a little bit doing it all from a grant funding perspective there are some where we are we are funding you know three ladies in a garage to we're funding people that have real businesses generating real Revenue that are later staged and the support we're providing is not just Financial we're also providing technical support and education as well as marketing

9:36support when needed whether that's aligning you know our social channels and discords and telegrams and other things to you know whatever needs to happen to amplify whatever it is that they are building on chain lithos is another gaming example that these guys created lithos they are former Sony PlayStation executive it is that are building a game called asphalt

10:02this is going to bring tens of billions of use of significant growth and user activity towards the end of the year as a result of their efforts and so we're going to continue to see that and so we want to make sure that we cast a wide net in terms of projects some are you know when I talked about investing in Builders and dreamers some of that is just it's a Dream It's someone that

10:29says hey I think this is going to change the way you know this particular industry operates or this particular thing that I can solve uniquely with DLT it's going to change you know the shape of whatever problem they're trying to solve and if you know when we think about how we make investment or Grant decisions we look at a lot of things first is the idea is the idea

10:58strong enough and specifically is the problem big enough right is the problem that they are trying to solve big enough where you're going to get a significant number of users a significant you know market share Etc and some of this is hard trying to determine how big a market is when a market doesn't exist so that's why we try to talk to them in terms of the problems they're solving

11:21then after you look at that you say hey I think the problem is big enough or it's Unique enough and we think that you know there's enough opportunity what's the strength of the product ID itself you know is it unique and specifically what are the areas that I'm focused on because I believe this hinders the broader adoption of blockchain Slash DLT in the non-crypto

11:46use cases and that's user experience user experience is Paramount if people are going to adopt it can't be as technical as it is today it's got to be slick it's got to be drag and drop it's got to be easy for people to use it we're seeing some applications being built on chain that are doing just that are uniquely changing the way that they interact with DLT and that's

12:10exciting to us because then I think you look at adoption and then finally the third area is the strength of the team have they had previous successes are they previous Founders or have they had previous failures because oftentimes failures are just as important because you learned a lot and then we test out how much did you learn you know after your failing company or project Etc

12:31so it's been fun it's been a fun journey and we try to do our due diligence as best as possible and now it is fun and I appreciate that the foundation is even looking at you know the garage Crews and funding people that they want to make a difference but you know it's hard for them to break into traditional Venture Capital so I do appreciate that and what

12:53you mentioned there about the user experience I think is Paramount as well for a company to come out with an amazing web 3 game that's going to revolutionize the gaming industry is great but if it's too technical to get onto then you're going to have a lot of hindrance for mainstream adoption so I think the infrastructure plays already headwinds

13:16yeah and there's already headwinds related to gaming where a lot of Gamers don't want nfts or they don't want any kind of Economics I mean you look at you know epics fortnite right you've got v-bucks you've got I mean there's all kinds of games but I'm just certainly familiar with that playing it with my son but you look at that and you say you know look do I want to really associate

13:39that to real cash or to you know beyond buying skins do I want to do something else a lot of gamers are like no I don't I don't want nfps and so we've certainly given Grant to some projects that are testing out this Theory to see if they can change you know the relationship the Loyalty Associated to mini Gamers on these on these gaming platforms we'll see yeah

14:02great point and I was personally curious about the metaverse fund and gaming and the different aspects of GameFly whether it's just a casual game or it's these intense you know Call of Duty like games and where we're going to see web3 gaming moving forward I feel like the explosions have yet to come we haven't seen a triple a quality game sort of

14:24breakthrough with nfts and as you mentioned there's some pushback and I've seen some other games that I attempted to announce nfts and there's backlash from the community so with respect to the hbar foundation's metaverse fund metaverse versus other types of gaming what are you personally interested in where you where do you see the growth of web3 in this gaming aspect

14:49so to level set the metaverse fund for us was you know one of our largest funds you know and we again while it's titled metaverse that isn't necessarily adequate for all that we are doing there to associate specific brands with their end users some of which is aren't games at all bamboo meta which is a really really unique platform

15:17imagine you've got an nft in your Apple wallet and based on your geo location that nft changes offering you discounted products or Services let's say you're in a mall and you decide you walk into you know a Nike store or then you walk into you know name your your next door a Lululemon or whatever you know and all of a sudden that nft that is in your

15:44wallet in your Apple wallet changes with a QR code based on that location incredibly powerful that's what bamboo meta does and so we're excited to have them on chain not necessarily gaming but is in the metaverse fun in q1 we are estimating based on the data we've got today that we'll have close to 80 projects going live in Cube one about 40 of those are metaverse

16:12related and so as we think about now to your question on game game of five we've certainly seen a lot of games ubersoft is one of our council members we created a co-fund with them to invest in early stage projects you know lithos is certainly a significant project they're building a game Triple A game called asphalt they've done an nft drop they're you

16:35know it's it's been really impressive and throughout this year there's going to be a lot more activity coming from them so we're really excited about that I mentioned cosmium k-h-o-s-m-i-u-m they're moving over over from Solana to us it's a AAA game astronova we just recently announced within the last few days moving over from ethereum that's a triple A game

17:02doing MOBA you know RPG and other types all rolled into one Legends of the past the list goes on and so we don't know which one or all of them are going to be wildly successful but we believe there is transformation happening in that space and we want to be front and center with that and we want to be front and center with the Enterprise adoption

17:27that we're also seeing most recently you know at the world economic Forum we displayed a use case called atma.io from one of our council members Avery Dennison which is taking and they've got their connected products Cloud they've got multiple billions of products and items that they are tracking and then they look at the carbon footprint from raw material to

17:51retail sale and everything in between and so that companies can buy carbon offsets for step one step two step three in the creation of that stead product so if you've got billions of items and those items have multiple stages in the process to bring them to life you get multiple billions of transactions on the network and we're excited to see that come to life

18:18wow that's very exciting and I love how you know you're expanding out in the metaverse and not just in gaming and I think the metaverse might take people by storm when they realize that the world outside of games is sort of being gamified and when you also think about augmented reality spatial web things like that's where you're able to drive more value to people in the real

18:40world they don't actually have to be in a game to extract value from the digital world where they are in the real world well and let me give you another example we are seeing organizations that are building on top of that area for the metaverse that are doing and focused on cost savings so today there's a company that has to fly all of their employees

19:07regardless of where they hired their global company regardless of where they're hired they have to fly them out to a central location for proper training they have created a metaverse environment where that training can happen in the metaverse and once they get certified that training that certificate becomes an nft longer term they want that nft not just to signify

19:32that they've passed a particular course or set of courses but to use that also as an identifier as identity on their badge allowing them specific access to certain areas of their company so it's completely changing the way people are thinking about how to use this technology oftentimes people think you know nfts you know are you know jpegs or pictures and they are and those are

20:00fantastic artistic representations of someone's creative mind but there's so much more out there I'll give you a couple of examples here bamboo meta the one I just talked about just now you know and so we're excited to continue to perform and that's why we exist we exist to incentivize these types of use cases to see whether or not they're going to get Broad and white

20:24adopt them and you know I look forward to the years to come likewise Shane and you mentioned there about really part of the end goal is to build this Foundation to help grow the hedera network and the ecosystem and you mentioned the previous answer about you know the transactions on the network and you know actually having those numbers that grow the network and I was

20:44looking into measuring the success of a hedera ecosystem and actually having more transactions and having more transactions per second as well to see like you know how much are people actually Computing on the network can you talk about measuring the success of the foundation and growing the transactions and then transactions per second on hedera

21:08so they've been growing significantly over the last week so just to give you an idea in the last six days you know we've done over 200 million transactions on the network averaging a little over 500 transactions per second if you extrapolate that out three weeks we will have done more transactions in three weeks than ethereum's done in its lifetime

21:31and so we believe that we're going to continue to see that significant increase with this adoption that we're seeing and we're leaning into that we believe not only is the speed and security and greenness of the chain but it's also the fact that you know we've got the scalability you know right now this is you know there are a lot of change that focus on

21:56their theoretical limits or theoretical you know they're theoretically unlimited you know this is not theoretical this is real transactions running on the network you know and we're excited by that and I think many organizations that are looking to build on chain are also looking at the cost structure that we have that is unique so if you think

22:18about the transaction types that execute on the network the consensus service we've got three the consensus service the token service and the smart contract Service the consensus service every transaction costs one one thousandth of a penny the token service costs one tenth of a penny and a smart contract Service roughly one tenth of a penny and so when you look at these services

22:42and you're trying to build a business one of the factors in building a business is understanding your costs so when you know the type of user adoption the amount of interactions with your application that they're going to have you can estimate how much it's going to cost you to run that app on us and that's very promising to organizations looking to build real businesses because

23:05that's something it's fixed to the US US dollar and it's something that they can at some level get insight into and control wow that's incredible amount of transactions just this past month and I think 2023 is going to be a great year hopefully for hedera that will also just continue to increase and to hear that businesses are able to forecast their expenses and not have you know a

23:31blockchain network where all of a sudden the transactions cost five times more than they did and you don't know that's something that can ruin a business so I appreciate you know the business aspect of that understanding you know where your costs are so that you can ensure that you're staying in profit and you're not going to fail as a business so very cool and

23:51now speaking of 2023 well I mean I did it yep yep go ahead I'm sorry I was just going to interject you know I did it I mean we were running a cloud business and you know we were hosting things and a lot of the cloud platforms that show remain unnameless and as a result of that I ended up getting a bill that was like you know we didn't anticipate you know this type of

24:13building and so we had to we had to refactor and understand you know how we were going to pay for that it would have been great at the time for us to be able to estimate what those costs from a cloud perspective were going to be so we want to provide a little bit more transparency and ability to understand that here 100 and I think that's part of

24:34the reason that so many businesses are are moving to hedera to understand they understand what they're getting into and you know the benefits of it when they start now looking forward to 2023 as I was mentioning as the network continues to grow and the foundation is you know looking for other ways to help its current projects and more projects

24:53what are some of the main initiatives that you and your team at the foundation are are setting out to achieve in 2023 in 2022 we were really focused on moving quickly casting a wide net on projects and letting everyone know we're here and we mean business we're here to build this ecosystem around hedera and in many cases other chains and other foundations were you know well ahead of

25:22having started and having been investing in this in their own ecosystem and so we knew we needed to get started so that's where we were focused that's why we did you know almost 200 grants this last year we believe going into this year we can be a little bit more choosy we can look for things that are really projects that are really going to move

25:43the needle and so we're going to do that it doesn't mean we're not willing to make the smaller Branch we're still going to continue to invest and make sure that the dreamers the builders with Incredible ideas that have great potential see funding but we also want to look for things that are really going to have an impact and move the needle and as specifically we need

26:07to make sure that these you know almost 200 grantees and go live on the network so a large portion of our focus is on is going to be on Grant success making sure we're following up with these projects funding was just the first step what else do you need either operationally or from a marketing perspective education you know to make sure that you've got

26:29everything you need to be as successful as you can in some cases we need to introduce them to NSI partner we'll do that in some cases they may be raising a series A or a series B we've got Investment Partners that we can introduce them to and so we're going to continue to do that and that's really going to be the focus that's why you know stating there's almost 80 different

26:50projects going live in q1 we want to make sure that you know as many of those projects go live we know it's software so there's things that are going to slip but you know that's a large percentage and we just want to focus on wrapping our arms around all of them to make sure they have everything that they need to feel successful and to go live incredible I'm looking forward to

27:15following some of those projects that are launching just in q1 so for the viewers that want to learn about the different applications that are launching what's the best way to follow along with those and also if there's projects that are interested potentially in moving to hedera as well how do they get started yeah so how do they get started

27:36ranges from you know people reaching out to me or to the H bar foundation on social channels like Twitter dming us or you know emailing us you know they can go to hpartfoundation.org for a lot of information in terms of we've got a lot of blog content a lot of content on the grants that we've made the dollar per month Etc and or they can go to hedera.com

28:01there's a lot of information around the chain specifically itself a lot of product related content as well and so or just go to Twitter I mean our social channels we have several folks that are all over Twitter making sure that we're monitoring the content as that's a pretty active Community as well as telegram so there are multiple ways they shouldn't have an issue and making

28:26sure that they get to the right folks to be considered sounds great Shane and I can leave those links in the description box below as well to make it easy for the viewers I appreciate all the information on the foundation and the hedera ecosystem it sounds like the ecosystem is growing in a very healthy way and I'm excited to see how it all plays out in 2023 and

28:48I will be following some of these applications as well they sound really Innovative so I appreciate you taking the time and helping grow out web3 to the real world and make a difference and make people's lives better so all the best with hbar Foundation moving forward and let's follow up in the near future sounds perfect actually thank you for

29:07the time this morning and getting to discuss all these things I look forward to the future as well