Web3 Galaxy Brain 🌌🧠

Nicholas: Welcome to Web3 Galaxy Brain. My name is Nicholas. Each week I sit down with some of the brightest people building Web3 to talk about what they're working on right now. Today I'm joined by Sirsu Haib to learn all about the past, present and future of eSports gaming DAO Blackhand. Sirsu is a prolific Web3 builder and organizer. In 2021 Sirsu co-created the Mint Fund, Crypto Cookout, The Well and the primary subject of today's conversation, Blackhand. Blackhand is an eSports DAO. Its essential premise, put ownership of an eSports team into the hands of the players and fans. At the time of recording, Blackhand's world-class teams participate in Halo Infinite, Apex Legends, Pokemon Unite, CSGO and Rogue Company Leagues. Hand also holds NFT gaming assets, including a significant Parallel NFT collection. In this episode, Sirsu explains the inner workings of Blackhand and we dive into their latest project, Stadium, a Web3 platform for eSports players to create teams and compete together. Sirsu is an inspiring creator who's used crypto crowdfunding tools to launch a series of communities all dedicated to increasing equity and access for participants in traditionally gatekept domains. I hope you enjoy the show. Yo, Sirsu. Everything is good. I'm here in the forest. This is going to be our first outdoor recording of the show. That's awesome. Can you hear the birds? There's a little bit of cicadas or something.

SirsuHayb: I actually can't. So your phone is doing incredibly well with, I guess, like noise canceling.

Nicholas: Dope. Hey, CDT. How are you doing? What's going, Sirsu?

SirsuHayb: Every day is like an adventure. A lot of new things to solve. A lot of different like working bits to organize. But honestly, outside of some of the headaches, it's rewarding and super fun. It's just a lot.

Nicholas: Totally. Yeah. What were you doing before you got into crypto?

SirsuHayb: Design and anthropology has been like my background for the past decade. So tracing all the way back to my internships, I started at AOL as a freshman in college building. I was using, I forget exactly what it was. I was basically building an ad platform with AOL. Like I was kind of like one of the very big in your forefront in design. MySpace growing up and built a lot of sites for folks back in the day like Face or like Guy Online or like a few of those other places where you can kind of customize your own forum pages or profile pages. So I got the bug for it and then just kind of like pursued it when I went to college. And then I worked at Gulfstream for a little bit. I had done some internship work with RGA.

Nicholas: What's RGA?

SirsuHayb: I don't know RGA. So RGA or Robert Greenberg and Associates is like the, it's two brothers. They started this business back in the seventies. They were doing advertising for film and then they branched out into advertising at large. Nike is one of their largest clients. And when I joined back in 2013, 14, I had worked as an intern on multiple teams dealing with the Nike, like Nike com, which was their website. I'd done some Nike special project stuff. So I got really unique look into kind of like the Nike fit watch at the time and then how that turned into the Apple watch.

Nicholas: Oh, yeah. I remember that. I remember when Tim Cook convinced them to stop working on the fuel band or whatever.

SirsuHayb: Exactly. Exactly. Yes. And then said, build a watch for us. And at that time I was doing UX and I was doing campaigns for all the shoes. So like Kevin Durant, Kobe Bryant, LeBron James, I'd worked on some Nike pro stuff. That's like a football gear. I had a lot of different interesting web experiences. So that got me really excited about consumer product and e-commerce. And I was like, Ooh, this is a fun industry.

Nicholas: So all about like branding, sports, tech intersection, advertising a little bit. Is that a good thing? Exactly.

SirsuHayb: Exactly. Yeah. That was like the anchor for RGA. And then I had moved out of that. I had worked for Audible for a little bit. I helped to launch Audible channels back in like 2015. And then I moved to Nashville for two years, worked in healthcare. Apple had a partnership with HCA, Hospital Corporation of America. It was like the second largest privately owned like medical hospital corporation in the States. They had over 240 something hospitals, both domestically and about two dozen internationally. But most of their hospitals were terrible. So we had to build, we were discovering what was the point of failure for patient experience and why folks did not have a good time at these hospitals. There's a myriad of reasons, but some of it had boiled down into some of the tech that was being serviced and how information was being passed between different hospital wings. And how that information sort of like processed and the speed and the immediacy in which it was. And so we worked on a lot of those things.

Nicholas: So you've been around a bunch of different things working on UX and tech. Meeting other industries. I'm curious, maybe we should jump to for people who aren't familiar. So Blackhand is the main subject of today's conversation. Maybe you could dive into a little bit of how Blackhand got started and what is goal is really.

SirsuHayb: Awesome. So Blackhand was a Twitch streaming group between me and my other founding partners. We just wanted to find a way to connect with each other and find and coordinate when we were playing video games. That's just like how we met back when we were kids. And one of the main things that were common about us is we wanted to compete in a lot of those games that we played in. So we needed to coordinate times to like schedule practice or training.

Nicholas: Did y'all meet on Xbox Live or something?

SirsuHayb: Yeah. So two of my co-founders, I met them in high school when I moved to Florida. I've moved around a lot as a kid, but in any case, we bonded over Xbox Halo 2.

Nicholas: Awesome.

SirsuHayb: And became fast friends from there. We were competing in MLG game battles back in like 2007, 8, all the way up to about 2012. We were trying to be professionals and got to like semi-pro status and sort of stayed there. And then my other co-founder, he was my mentee when I was in Nashville and taught him a lot about design and art and such. And so we became fast friends there too. And then we all kind of combined sources and it was like, hey, it's 2020, pandemic's happening. We should stream. We started streaming on Twitch, started to build a following. And then a lot of folks on Twitch were doing, were striking because of the way Twitch wasn't implementing rules in a very lopsided way. And it was harming a lot of different communities and content creators.

Nicholas: Is this the beginning of, what do they call it? Like jacuzzi streamers? What's the word for that? Hot tub streaming?

SirsuHayb: Yes, yes, exactly.

Nicholas: So basically they were like limiting what you could stream, but it was ending up with this kind of like lewd content coming to the top. Is that?

SirsuHayb: That was part of it. And then the other part was if you were a non-white streamer, then you would get a lot of activity during like a holiday that was sort of designated for you. So for example, like Black History Month. Or Juneteenth. Yeah, it's very, it was weird. So it was like, I realized that like I would get a lot of views Black History Month and Juneteenth, but then the rest of the year I wouldn't get anything. That's so weird. It was fucked up. Yeah, it was horrible, dude. It was so bad. Like Chinese New Year, for example, if you were Asian, even if you weren't Chinese, like they're like, oh, it's Chinese New Year. Like we're going to give a bunch of like, it's just like Asian pride. Everybody's going to like watch Asians and then like nothing else afterwards. So it was a very odd time. It's like, wait a minute, like is Twitch like? intentionally like pushing viewership during like these months, but then there is no sustain afterwards? Yeah. So a lot of people were like, this sucks and we don't like it. So at the time we were like, okay, streaming is getting interesting. Twitch may not necessarily be the platform for us long term. We need to figure out like what ways we can push content or at least like build something within gaming that can be sustainable. We all stumbled upon Antiz around that same time. I learned about DAO's. That's kind of like how I got started with like the Mint Fund and everything else related to all the other stuff that I've done in the space.

Nicholas: When was that? When did you get really eath-pilled and really into it?

SirsuHayb: I would say September 2020.

Nicholas: I came in around the same time. That's sweet.

SirsuHayb: Yeah. And then Mint Fund came out February the following year.

Nicholas: You really hit the ground running. So Mint Fund for people who don't know was, I mean, the way I saw it was like collect funds and get people who don't have access to Ethereum either by, for lack of knowledge or for lack of funds to get started. gas wise, especially cause it was getting expensive around that time to just bring on artists from diverse backgrounds. A warrant is represented in the community at the time.

SirsuHayb: Exactly. And then we ended up building an auction method in collaboration with Zora, Mirror and the student Billy Rundkamp. They worked for Dharma at the time. And because that was a open source and permissionless auction method, cause at the time you had to either be approved from SuperRare, Foundation or KnownOrigin in order for you to auction your work off on chain, unless you knew how to build it yourself. So Mint Fund was a conduit for, in a way, a level of hyper growth for a lot of artists to find other ways to sell their work. Because as a result, that sort of base source code led to the creation of Zora's Auction Houses, led to the creation of auctions on Mirror and then obviously all the other sort of like works or platforms that came after that, like Artiva and what have you. So it was very nice to contribute to the canon.

Nicholas: That was the same basis for the Nouns Auctions, I guess then.

SirsuHayb: Yeah, exactly.

Nicholas: So they forked this contract that Mint Fund was kind of pushing for and Zora was supplying the dev talent and ideas around how to architect it, created the auction houses, which was, I guess, Zora v2. That was like the big feature in Zora v2, if I recall correctly.

SirsuHayb: Yes, it was.

Nicholas: Yep, yep, exactly. Because the original Zora, the auctions, the NFTs had, it worked more like CryptoPunks. The marketplace was built into the NFT and inextricable from it. And then, right, too, they shifted to like separating out the auction house, which was awesome because at the time, like you said, there were these permissioned curated galleries and there was OpenSea, but people weren't really doing auctions on OpenSea in any way. You'd have to pay the fee. So this is like a no fee auction house. And it's crazy that it then got bundled into, forked and bundled into the Nouns ecosystem, which has obviously had such a huge impact. So people may not know, but Sirsu at the core, at the start line for a lot of this stuff.

SirsuHayb: Yeah, dude, it's so weird, but like a very like awesome to know that some of that work that we did contributed to the NFT cannon in such a big way. It still blows my mind a little bit that we pulled it off. And then we did the meta where we auctioned off our source code, like using our auction method. So sick. But yeah, those are moments like I'm just like forever grateful for. But a lot of that prepped me to figure out what Blackhand could look like in the space. And so I wrote an essay last July about building a decentralized gaming community and sort of like the thought process behind like what I noticed by being a part of the space, like participating in like the streaming environment and seeing how disgruntled a lot of folks were and being a part of the tournament environment and not being able to get paid immediately because of different tournament organizers or like the lack of visibility and figuring out how to value yourself as a player or how teams can find value or the cost of actually doing business within the space. There's so many kind of like closed doors and unknowns because no one shares info. And when you do share info, it's very hard to validate whether or not that information is true or not.

Nicholas: Because overall, my impression is that maybe it would help to understand because it's so interesting to compare it to that Mint Fund need for the auction house and then Zora coming in and building it with you guys and then putting it out and having this. It reminds me a little bit of way like accessibility features in like iOS are a great accessibility feature is useful for everybody. It's not just for the people who were the original impetus for creating it. And in eSports, it seems to me like it kind of came out of this like graphics card vendors like pumped up this whole idea of eSports. But now it is actually its own legitimate industry. It's not just propped up by those marketing budgets from like AMD or whatever. But players have been disempowered, like essentially disenfranchised is the sense I get. I get the sense that it's the teams which are not owned by the players that have all the power. Absolutely. So as an actually great video game player, you're like shuttling around the world just trying to find like the best possible deal. But you have a system that's. is it something like record labels? or maybe you could describe a little bit about what it's like and what the experience for the players is like.

SirsuHayb: Sure. Yeah. So for example, like if you're in eSports or typically you in a way hold a lot of the power when you sign players, players do not own anything related to the process. They're there, you know, obviously strictly to just play. Most teams hold most of the negotiation cards, especially if players are not in and in a well oiled eSports engine. So I guess we can look at it in two distinct ways, right? Playing video games has been around forever, like 50 years at this point, right? But playing video games competitively in a way where it was commercially viable has not really has only been around for maybe 15 years at most. You can say like early days, 20 years ago, 22, 25 years ago, there obviously were tournaments. It's not like they didn't exist, but you couldn't necessarily earn a living off of it until maybe a decade ago, right? Where you're starting to see players like Faker, for instance, like play for South Korea tier one and they're getting paid hundreds of thousands to compete. Right. And now we're seeing salaries where some of the highest paid players are getting paid $6.4 million a year to compete in video games, right?

Nicholas: Crazy. What games pay that kind of salary?

SirsuHayb: League of Legends, Dota, CSGO will pay like these massive amounts.

Nicholas: So these are games that are popular in Asia, especially or all over.

SirsuHayb: Yes, all over. But the thing is, these games have a long standing history. They've been able to sustain themselves for over a decade. And that's the reason why their competitive scenes are incredibly strong because they have the type of environment or their game has lasted long enough to where whether you're a third party or you're the main developer or publisher of the video game, you can bank on this very large and still rapidly growing fan base of people who want to play your game.

Nicholas: I guess the competitive, like I know from the Magic the Gathering world that the competitive scene is sort of giving people something to aspire to, to keep these very rare games that last more than 10 years in terms of having an engaged player base. I imagine having that competitive echelon of players keeps new players coming in and aspiring to be that good. Whereas if you don't have the e-sports element, then maybe the game gets more tired more quickly.

SirsuHayb: Yeah, I mean, and I think the thing too is there's like they are able to position themselves in a way that fits more of how we see traditional sports and sports media. e-sports cannot, it does not fit that general schema at all. Like in aggregate, you can't build for every game title the same way. you would approach the NBA, the NFL, right. The MLS, Premier League, so on and so forth. Right. These things have like, not just like the longevity of over a hundred plus years for me for some of these games, but they have very unique infrastructure that penetrates the youngest of people.

Nicholas: And schools even.

SirsuHayb: Exactly. And so like you can do similar things from an e-sports perspective in aggregate. Like you could have young kids train in digital athleticism and kind of like everything related to like preparing someone to have an e-sports career. But it may not necessarily be within one particular title unless it's a one of those massive titles that we just like listed. And that's you can only count maybe like 10 or 12 of those in total that actually have that type of impact.

Nicholas: I'm just putting like five year olds through a gauntlet of like taunts in chat.

SirsuHayb: Exactly. It's like we're gonna train your little baby fingers in dexterity so that by the time you get like a mouse and keyboard at age 12, you're gonna be a beast at CSGO.

Nicholas: You've already heard the worst 4chan can do. You're not, you're unfazed by chat.

SirsuHayb: Exactly. At this point, like chat is nothing. Let's say like a new title comes out and this is the thing that like for Web3 games that are very, that's interesting, right? Like let's just say, and I'm not gonna use a game like Parallax. I think they come from the background of folks that have worked on Magic and so they know what it takes to kind of build something that like has that sort of longevity. Let's just say like a typical like Web3 game. I might even use Axie for this example. So Axie Infinity, if we were to take that game and we were to put it really in the competitive gauntlet, because I don't think that it has a real large competitive scene, right? I don't even think it has like a competitive scene. that's compelling because...

Nicholas: Yeah, I don't know. I saw they had some conference recently, but I don't know. the actual player scene is like...

SirsuHayb: You need a mix of three core things. You need a great game, you need great players, and you need great viewers. If the game is not watchable, it is not an esport. Like it's dead upon arrival, right? You can have the best game in the world, but if nobody wants to watch it because it's not fun to watch, it is not an esport. Because the main thing like folks don't necessarily get is esports is entertainment, right? Same way that like NBA is entertainment. Anybody can pick up a basketball and play the game, right? Like that helps proliferate just the idea of basketball being in existence and being a cultural maven or a cultural part of society, like maven of society for years to come, for decades, for centuries, right? That helps keep the retention. But the watching of it, the spectacle of the sport is what makes basketball compelling to watch, what makes basketball compelling enough to where people are paying players hundreds of millions, if not billions of dollars to compete on a world stage or even in your local community because it's just that damn good to

Nicholas: watch. So I'm curious, it's easy to confuse if you're not super deep. To someone like Ninja, are they an esports player or just an influencer who streams, like a streamer and is a crossover?

SirsuHayb: So Ninja was a crossover because Ninja did compete. He wasn't the best competitor because it's not like he won everything. I think that's okay, right? This is the difference between sort of like basketball and esports. Esports has like this very unique blend of being, you could be a professional competitor, but also a really unique and dynamic entertainer outside of just competing, but you still use the games as the conduit for both ends. It's hard pressed to find someone who's a basketball player that uses both basketball as a point of reference for their competitiveness, but also as a way to build general content around themselves. You see LeBron James play basketball, but he's not playing basketball also from a form of content creation. But he uses his status as a superstar basketball player to branch out into other forms of media.

Nicholas: Right, Steph Curry's doing like recipes or something. He's not playing on YouTube also. It's just the professional gaming is where you see him play basketball, and then the content is a completely different type of content.

SirsuHayb: Right, whereas Ninja can compete in a Fortnite competition and also casually play Fortnite and build content around that too. And it works all the same, where I could be engaged watching him play as a competitor, but I can also be engaged watching him play casually and just shooting the shit with his fans on Twitch.

Nicholas: So it means that there's like from that gaming desk or whatever, you can be doing both types of content competitive for prizes and whatever the distribution that your eSports streaming distribution gets, as well as having your own channel where you're playing casually or whatever, playing other games even.

SirsuHayb: Exactly. There's a sort of like a mutualism in being able to do both because the game in and of itself like ends up being kind of like the anchor point to get folks to watch, right, to get people engaged in what you're doing. Whereas in basketball, for instance, like even though the game itself is the grounding point, you can follow the career or the superstardom of a particular player outside of it. It's almost like if you don't like basketball, you got to watch the player. But in eSports, you end up usually liking the game and then you end up discovering players that you like as it relates to that. We have not necessarily seen an aggregate where you could not like the game, but you just like the person playing the game.

Nicholas: That's true. Once you follow them on Twitch or whatever, once you start following their gaming channel, then maybe you start discovering games through a person. But it does. Also in traditional sports, it does seem that there's like this element of the soap opera, the drama of what's going on in their lives relative to their performance in the game. So once you get into it from whichever angle you end up following this drama, it does seem like there's a chance for player owned teams in eSports in a way that would be difficult to, it's going to take a long time to get that kind of logic into something like the NBA where it's so entrenched already. What were the tokenomics of Blackhand or what was the idea around giving players a share of the team?

SirsuHayb: Well, so the thought around giving players a share of the team was so that what I don't like is I don't like empowering, right? Because it still just means that I have the power and I'm just giving power to other people to use for a particular purpose. I wanted folks to discover their own internalized agency. The fact that they have the ability to chart their own path with what we're providing them and to do so in a way that felt good to them. I think the one thing that we can all attest to in crypto is that it's a very active environment. It's very hard to be passive here. Like you can, it's not like you can't. You can dollar cost average on Coinbase and then yeah, you can say you're in crypto because you're passively like investing in it and that's fine. But if you're building in this space, then it requires you to really exercise like the agency of being a part of this framework like on a daily basis, right? It really requires you to kind of go after and get and set things up.

Nicholas: Yeah, we saw that with people like Blau, for instance, who as a musician is of a certain level, but in the NFT scene and in the crypto scene, because he was spending so much time on CT and directly engaging had like a way bigger representation within that community's music scene than maybe in the traditional music world. So tell me a little bit like what does Blackhand play and tell me a little bit about the players.

SirsuHayb: Cool. Yeah. So Blackhand, we have a Pokemon Unite team, which we had won Worlds World Championship in August.

Nicholas: What kind of game is that? for people who haven't seen that? Is it like a traditional Pokemon PVP kind of game?

SirsuHayb: So Pokemon Unite is a mobile online battle arena, which essentially is like you have two teams and the premise is you're on an island where you have to capture EOS energy. You have to capture this energy. The team that scores the most points or obviously banks the most energy and the opposing teams, I guess zones wins the game. Right. Each game is 10 minutes and you have a team of five. So you get to pick five Pokemon within this roster of I think maybe 30 Pokemon right now. You have three lanes. You have your top lane, you have your bottom lane and you have your middle lane and you have sort of like your jungle zones, right? Areas where there are wild Pokemon that you can defeat to capture energy because you don't want to necessarily like have everyone take up all the lanes. There's some part of a strategy. It's similar to how League of Legends and Dota work where they're both battle arenas as well and you have to capture the opposing enemy's nexus or like zone area by defeating your opponents.

Nicholas: So it's like Pokemon spin on Dota or League. We may be slightly simplified or structured, more structured.

SirsuHayb: Yeah, it's simplified because the games are supposed to be rapid. You shouldn't be spending 40 minutes like with Pokemon playing this game, but 10 minutes like creates like this level of like you could really get through a lot of games playing in a day, but it also like reduces kind of like the level of effort you may need to exert or like knowledge you may need to know early before you get into a game and really start to find your rhythm. So it's a very fun, like easy game to pick up, but very hard to master, which I think is really good with games like these because when you go into comp scene, everyone can follow along very easily, but it's in the macro play when you really start to learn about the moves and all the different items you can equip for your Pokemon and like what type of meta strategies that you need to set up. Then it gets really, really exciting to watch professionals kind of like play this game because you're like, oh wow, I didn't realize you could like strategize around this object or this Pokemon or like this lane. That's really, really fun there. So Pokemon Unite is one of our games. We have a CSGO team. We were just competing in Fragadelfia, which is one of the largest amateur CSGO competitions, I think globally. It's a 100K tournament. We placed, I believe, 13th. We had to do a last chance qualifier because obviously our team is in EU, so they couldn't compete in the regular circuit. So we had to do a last chance qualifier, had a very insane loser's run because we got knocked out the first round and then we just climbed through, clawed our way through to get into a pool play or to group stage for the actual main event and then got knocked out after that. But very fun for our team because they had never played in main stage before. So it was really cool to kind of have them like have that first ever experience and so they'll be back for sure.

Nicholas: So okay, so we got Pokemon Unlimited, you said it's called?

SirsuHayb: Pokemon Unite.

Nicholas: Pokemon Unite. CSGO. And I know you have a Halo team too, right?

SirsuHayb: Yes, we have a Halo team. They will be en route to Orlando to play in the last major of the season. If they manage to grab top 12, that means we qualify for Worlds and then we will be playing in Seattle in October. So hopefully we can make that happen. Our team is definitely good enough to get it. We're just going to see how we stack up with everyone else.

Nicholas: Because I know your Halo team is like really well ranked globally, right?

SirsuHayb: Yeah, yeah. Our EU team, our Halo EU guys are third in Europe and I think when we played in Kansas City, we were ranked 18th in the world. We're definitely in the top 20. I think we're definitely better than what we showed in Kansas City and I think we have what it takes to qualify for Worlds. So just got to get out there and be locked in.

Nicholas: So what's the relationship like with it? Like are these, like say the Europe team, like they're a bunch of friends or are they run by a coach out there? and how do they, you're financing I guess the flights and stuff or how does the whole thing work?

SirsuHayb: So depending on the game, that will determine whether or not you will pay a salary or you will just sponsor their travel.

Nicholas: Okay, I see.

SirsuHayb: So for our teams, most of our teams, we pay somewhat of a salary and we also finance travel. If they qualify for certain events, then travel is paid for by the league. So for example, for most of the time in Halo, our EU team has qualified for every major So flights and hotels, they had been covered by them or had been covered by Halo, like the championship series.

Nicholas: Okay, cool.

SirsuHayb: Pokemon Unite, they gave our players stipends to pay for their travel to Worlds, but we are qualified so we didn't necessarily have to pay for that up front. Same with, we had Rogue Company at one point as well. All the travel was sponsored by Rogue Company. We just had to like make sure that our teams were supplied with jerseys. So it really just depends on kind of like the relationship that the teams have with the organizers and then how the organizers work to incentivize players to compete in tournaments all play a role in sort of like what our cost is or what our expenses are as it relates to the teams and the players and whether or not we give stipends or not. So it all really depends.

Nicholas: And is the goal to ultimately, we should talk about in a minute all the NFT stuff as well, which I don't know. if the games are really like active, we can get into that, but is the goal ultimately to be able to provide like salaries as well as some kind of token position in the team? or how do you think about the long term aims of Blackhand?

SirsuHayb: So long term aim is we want players to have a sustainable income source while they're competing, right? And then the ownership gives them the ability to then further build their and entrench their career in esports after they're playing. If you are playing currently and you're a part of Blackhand, you want to represent us and then you decide to retire, well, you still have Blackhand ownership. So that means you can transition yourself into being a coach, into being a GM for that team. You could find ways to branch out and build your own team through our protocol stadium that we're going to talk about soon. So that would be sort of like why the ownership component is important? because I think for two reasons, right? One is I'm interested in fielding incredibly top tier talent, but right now if I wanted a top tier Valorant team, I would have to pay somewhat close to like $15,000 a month to retain players and coaches and analysts. While Blackhand is still in its early stage and figuring out kind of like all its paths of recurring revenue and building the monetary or the financial treasure chest to make these moves and to then obviously pitch that to our community so that they can vote on these things and then actually approve of these budgets. We have to be able to offer them something a little bit more competitively, right? And so for me, offering ownership is in one aspect a way in which we can attract top talent because it says, hey, no other esports entity except for a few, right? And I can count on my hand, one hand of players that are known to own a portion of the organization they represent. That's Tim the Tapman for Complexity. That is Faker from SKT1. And I believe that's two or three other players from big organizations and that is it, that we know publicly. Now for private, there might be a little bit more, but I think it's still a handful of folks that have anything related to ownership.

Nicholas: Because basically the players need the teams in order to give them the consistent salary that they can't get from Twitch. And it also like increases their profile, I imagine, so that eventually they can get some kind of recurring revenues from Twitch and advertising deals, but outside of their relationship with the team. I take it the team is sort of like the core of this industry that's so young for the players to be able to support themselves. I take it the team is really that core salary that makes it possible, right?

SirsuHayb: Yes, and the teams usually pay out core salaries based upon sponsorship. So sponsorship and media deals are, they cover over 70% of all revenues that come into esports entities to date. It is not from tournament earnings. It is not from merchandise. It's not from other hardware and consumer products. It is from brand deals. It's from sponsorships. Those are the things that pay out and help bank and secure salary for teams and for players for the year. And so without those things, teams do not exist. And teams are still loss leaders. Some of the biggest names, negative $40 million, negative 20 mil, negative 10, negative 12. And obviously, even though esports is a loss leader, it continues to grow because it's one of the fastest growing entertainment sectors when it comes to gaming and culture.

Nicholas: So people are basically banking on the idea that these teams, whether they be traditional style or some like web three style, are going to be bigger and bigger brands in the future and then eventually will be able to be like revenue positive. Is that the idea?

SirsuHayb: Absolutely.

Nicholas: Like 100 Thieves comes to mind. So 100 Thieves has become more of like a lifestyle brand associated with YouTube channels and stuff in addition to the original brand, which was associated with gaming. Is that kind of the prophecy for a lot of these things?

SirsuHayb: So funny enough, 100 Thieves actually started as apparel first. that just so happened to have games.

Nicholas: Oh, really?

SirsuHayb: Yeah. So like the way that they pitched it, when Nadeshot was discovered by a few folks post him being an optic, they were like, you should build lifestyle brands, but centered around games. That's why when you go 100 Thieves website and everything like it's merch focused and that's why their merch outside of ours is the best merch in the game. That's just because of the fact that they really spent time on quality. And of course, like their price points are different, right? Like you do look at any other esports org, their prices for shirts are 20 to $30 and 100 Thieves is 65. That's a big difference because they're going after a different market, right? But they realized because they realized that we needed to up the quality and like the image of gaming and that it didn't have to necessarily just be your mom's basement type of environment, but it could be, you could be open about being a gamer and being proud of that. And it's so weird, right? Like to consider how gaming and the culture around it had not necessarily always been this very positive, empowering, like full of agency type of space, but everybody games. Whether you're like a supermodel or like a regular average person, everybody has played a video game and everybody likes video games, but they will admit or not. Everybody plays them. But by meeting, by changing the landscape culturally through fashion, it allowed more of those folks that normally wouldn't talk about that they play video games to actually talk about video games and it becomes a core part of discussion. So that's sort of like what they had done in a way, sort of like open that up. But in any case, like 100Ds comes to mind, FaZe Clan comes to mind as well. FaZe Clan is, they're like a SPAC at this point. They're like the first thing that like rang the bell on the stock exchange. They're like publicly traded. And I think that's going to be the point of arrival for many of these like bigger organizations is that they're all going to be publicly traded at some point. They're going to be like super large companies that are just media conglomerates and brand conglomerates, which are good.

Nicholas: Right now in traditional sports, it's like Chamath, like these characters who become like mega millionaires, billionaires are able to buy into a piece of the teams. But in general, teams are not owned by the fans. I guess, are the Patriots or there's a, there is a big team that is fan owned, I think. But like in general, the sense is that it's, you got to be a big, real rich person to partake in that. But it seems like something like Blackhand would be owned mostly by the players, but also partly potentially by the fans. Right?

SirsuHayb: Right. So our community, we've got over like 800 people on Discord. We've got at least over 400 folks that have purchased like our NFTs to some capacity. So there's ownership there from that perspective. There's about 300 or so people who own our token outside of our players. And so there's this good solid amount of like ownership that's been given or has been distributed out to both our community and our players, which has been very fun. And like, we're in the process of kind of like really ramping a more unique set of membership opportunities in like the next like two months. So we're going to have like even more ways for folks to really get into the action here. And then also being able to sort of like directly own our teams and not necessarily just like being like owning our community. But like if you want to own a team specifically, so going back to Valorant, for instance, let's just say we picked up a Valorant tomorrow. I want folks to be able to say, well, I want to buy ownership within this Valorant team because I really like that. I love Blackhand, like Blackhand's cool, but I want to own Valorant specifically. Here's going to be a way to do that, right? We have the team, we through Stadium, like have our team minted as an NFT, and then we can fractionalize those shares. We can fractionalize the ownership of that NFT and then have those for sale for folks to buy into.

Nicholas: Yeah, so tell me about Project Stadium. What is Project Stadium?

SirsuHayb: So yeah, so Project Stadium is like this evolution of everything that we've learned at Blackhand for this past year, but now protocolized for folks to build on top of and to literally kind of do what we do. We realized we were like, look, we built Blackhand as a way for us to say there's a way for equity and fairness and agency to be in the esports environment. There's a way for ownership to impact everyone, and we want to replicate. And now we know how to build a competitively viable engine for this because our teams are starting to win. We've gotten regional championships. We've gotten a world title. We kind of have, we know what it takes to get there, right? But we want to replicate that success and make sure that any community can do the exact same thing. So Stadium is a protocol that enables community members such as yourselves, for instance, to build your own version of Blackhand, right? Brand it however you want, put your own logo to it, recruit your own players, develop a marketplace. If you're a community that wants to represent players, you don't necessarily want to build a competitive team, but you want to represent players. Well, there's arbitrage opportunities now where because of the fact that players and their values are more transparently known and teams and what they're looking for are more transparently known, you can become an agent that connects the dots for folks.

Nicholas: So basically, I can create a team on Stadium, and then I guess it specifies what games or single game the team is our players of? Or how does it work? And what does it allow me to issue? How does it help me generate revenue? Right.

SirsuHayb: So Stadium is like two things. It's a tournament organizer builder. And of course, you play in tournaments on Stadium. And it's also a marketplace and talent directory. Players will create what's called like their player cards. These player cards are now transferable, but they will grab game data from you playing in Stadium tournaments, your earned points, Stadium points, which will be directly used for seeding. So obviously, when you are in a play in tournament, the more you win, you earn points. And then that helps you seed into the playoffs or puts you in regulation, depending on how you set up your league. And then for teams, you can recruit players, add them to your roster, register for games, register for tournaments, register for leagues, buy franchise slots within certain leagues, right? If they're like a closed league, for example. Okay. And then compete for prize pools. So that's sort of like kind of like the main thing there.

Nicholas: So basically, team builder, team management and talent pool where players can have their own profiles and potentially even move between teams.

SirsuHayb: Exactly. And so all that they get to then compete in events. These events are both digital and in-person like LAN events that we're hosting. And we have some really unique core capabilities to enable fans to contribute to the stakes of any particular event. We're doing kind of like called it sort of like our own version of a support pack and it harkens to Dota. Dota was one of the first games to do this, where they sold a compendium where fans could buy like these support packs for particular teams, and it would contribute to the prize pool. They've been able to grow prize pools from $7 million to $49 million for a world tournament. What this does is like everyone who competes in that tournament wins. If you lost all 16 games in the tournament or if you play 16th, you walked away with. That's huge. As a team, for example, like if I own a team and I know that because this title is well supported and we worked our ass off all season to get to the finals, get to Worlds, even if we lose all of that money that we won, that $100k that we won literally pays for next season. Now, as an owner of a team, I could worry about other things. I can say, how do we now build more awareness for our team? How do we get brands and other folks to sponsor us? How can we create really unique content? Because I know now from competing at Worlds last year, my players' salaries are paid for, transportation is paid for, if I need to bootcamp, that's probably paid for. So now I can now worry about proliferating our brand bigger than me trying to figure out how I'm going to provide for my players. How am I even going to provide for myself?

Nicholas: So basically the prize money can fund the sort of core operations which allow you to have the time and bandwidth and hiring potential to expand into merch and other kinds of revenue streams.

SirsuHayb: Essentially, to answer your question, that's exactly sort of how it works, right? And it makes tournaments a viable revenue source where teams could literally now say, we can expect, not necessarily expect, but on average winning, this means that we could earn X, Y, and Z a year just by showing up to an event. Because that's what sort of that compendium did for Dota players, right? It's like, at first the prize pool, it was small, so you had to really earn to get something substantial. But now that fans can contribute to the prize pool and get something really neat out the deal, and I think in this case, it's like we're using NFTs as that conduit, right? Where folks buy and support the teams that they like, and then there are many different ways we can sort of combine other DeFi elements, for example, to then either it's a share is distributed back to those who contributed or whatever else we decided to do on top of contributing to the prize pool. But now a team that is showing up for this invitational event that's heavily broadcasted now has the benefit of saying, because we're showing up and because people are supporting us, we're walking away with money. So that covers our travel, that covers this, that, and the third. We can now work on becoming cashflow positive at any given juncture throughout the season instead of starting at a negative, starting at a deficit. I think most teams start at a negative. They say, look, we know salary is going to cost us 50K for the year. We know travel is going to cost us maybe another 50K for the year. So we're in the red 100,000. We don't have an engine yet that supports merchandise sales at a high volume. So we may make maybe like 10,000 a year off of merchandise. We don't have brand sponsors. We're fighting for representation. And for most tournaments, if you're not in the partner teams, if you're not a franchise slot, you're not streamed. You have to fight for that. Like for Halo, for instance, we compete in the open segment and we fight every major tournament to get into the main stage or the champion bracket. Because that means now we have a chance to show our brand because we're now being able to be streamed.

Nicholas: How does Stadium help fix this problem exactly?

SirsuHayb: So Stadium helps fix this problem in a couple of ways. So the first is we can't stream every game. Streaming is something that has to be a larger effort across those that are organizing tournaments on our platform. Building resources for them to be able to do this in a decentralized manner, shout out to Live Peer and a few others, will enable us to kind of like really have a very unique way of making sure that any and every game has a chance of being shown on a screen. That's not necessarily the main thing that we're addressing. The main thing that we're addressing is the idea of sustainable revenue sources through competition, because that's the big thing where every brand that you notice has to do everything else outside of just competing in order for them to proliferate themselves or to sustain themselves for the following year. So for Stadium, the goal is through the advent of fan participation, we are able to influence and create prize pool distribution so that every team that competes within a given tournament is able to earn something from the prize pool.

Nicholas: I see. Okay. So try to spread out the prize pool a little bit more so that more teams can have the opportunity to compete.

SirsuHayb: Exactly. That's one. And then two, by increasing the scale of the prize pool, the stakes are higher. An amateur tournament that may have no prize pool, but have a dedicated fan base of people and they want to see these people win and they want to see these people continue to host these really cool amateur events. I could come in as a fan and I think, for example, Smash is a very good proponent of this, where Smash has some of the most dedicated amateur leagues around. It's not sustainable. None of these organizers make money off of this stuff or what have you. None of the players make money off of this stuff. But even though it's fun, they're spending a lot of time and resources to stream and to broadcast and to make this thing awesome. So I want to make sure that they continue to do what they're doing. So as a fan, I would contribute and actually build a prize pool for them. And then now all of a sudden, what became a very fun, sweaty amateur competition now turns into something where money is on the line and folks are like, oh man, I really have to play my best because I want to earn. I want to earn something.

Nicholas: Got it. Not Ronan Wing. Welcome. Did you have a question, comment, something?

SirsuHayb: Yeah, I just want to say, man, Sersu's awesome. I've been following him for a while. He doesn't sleep. I have a question, just a quick. I think a lot of people lack long-term vision that you do, that you have. So I was just curious, what's your vision for The Hand five years from now? Where do you think you'll be? So Blackhand, I wrote a tweet on this. I was saying I was crazy enough to build a tier one organization. And I think I'm crazy enough or bad shit insane enough to use that to purchase a game. I think Blackhand is a brand that is in five years, it's a brand that's ubiquitous because I think Blackhand is eSports for the culture. That's kind of like our tagline that we've been running with recently since our rebrand or at least our site rebrand. When Blackhand wins, I want everyone in Web3 to feel like they won. So when we won the Pokemon Unite World Tournament, I wanted everyone that knows me, I want everyone that rocks with eSports in Web3 to feel like this was their team too. I want Blackhand in five years to be so ubiquitous that people are wearing our stuff on the street, they don't even know that it's an eSports brand. People who look at our merch now can't even tell me that it's an eSports brand. I love that. Because that shows for basketball, people wear the Lakers jersey because the Lakers brand is so large, but everyone knows that it's basketball, even though they're associating it with the players and the culture of the Lakers because it's a superstar winning his team. I want Blackhand outside of eSports to be a culturally relevant brand that people rock with because they're like, yo, that shit's fire. I identify with that. That makes me feel really cool when I wear what they're wearing. Ubiquity is one part of this. The second is I want us to win a lot. I think we can be one of the most dominant eSports organizations around. The way that we're going to approach Parallel, the way that we're going to approach other games like Wildcard and stuff like that within this Web3 space, I think we're going to be a dominant player for years to come. If folks want to bank off of our success, soon we're going to have more ways for you to buy into the hand for sure. We're going to be sitting on Fountains of Prime and all these other types of really awesome, unique tokens and then find ways to distribute that back into our communities so that people can do this on a larger scale. We're going to win a lot. But I also think Blackhand is going to turn into a publisher. I want us to also develop games that we then compete in. I want us to be a part of that ecosystem of supporting other game developers that have really unique ideas because Blackhand is going to be so large that we're going to have an incredible talent and player base. Most people who focus on esports in this industry right now in Web3 are only focused on building the games. But you need players. Without the players, who's playing the game?

Nicholas: Nobody. We talked a lot about more traditional games. I know you have Stacks of Parallel. How do you think about Game 5, game playing on-chain? Is it time yet? And if so, how is Blackhand participating?

SirsuHayb: For us, we are shaping up everything that we're doing for year two because we're kind of entering in year two since last month because we've hit a year. But everything for year two for Blackhand is building the infrastructure so that when these Web3 titles come out, we're not only ahead of it, but we are executing all of their competitive leagues. Through Stadium, Blackhand is going to be powering the competitive league for Parallel, hopefully, the competitive league for Wildcard, the competitive league for some of these other Web3 titles. that I'm not at liberty to say yet. And we will be fully enmeshed in this new paradigm of how teams organize to compete within these spaces. Blackhand is fundamentally going to be the bedrock for how esports is proliferated within Web3.

Nicholas: There's been some like DAO stuff around like Dark Forest, like DFDAO and some other DAOs. Do you think Blackhand can be that but across multiple games?

SirsuHayb: 100 percent. I intend on it. I think Blackhand's presence should be felt in many of these really awesome, unique game environments. Because Dark Forest, it's like a non-traditional but still very competitive game.

Nicholas: Very competitive, yeah.

SirsuHayb: I love watching it. I like getting in the weeds of how folks are strategizing for that game. And it may not necessarily be something that folks can broadcast per se and make it a form of traditional esports entertainment. But I think it has a place within the pantheon of esports and competition and entertainment value. We just have to find a very unique way to do it. But I think I see Blackhand, Blackhand DAO, community members coming together and saying, yo, we are obsessed with Dark Forest. We want a budget to compete in Dark Forest. We approve it. And then Blackhand's presence in Dark Forest, right?

Nicholas: Is that how governance works already? Are people already voting on proposals in that model?

SirsuHayb: Yes, to a certain degree, that's how it works.

Nicholas: Is that like snapshot votes? or how do you do it?

SirsuHayb: Right now, it was through soft consensus. Because right now, we had done snapshot voting for our tokenomics and some of our initial things to get some of our DAO components. But when we came out for our first year, when we did our crowdfund, we had mentioned the five teams we're already going to get into. And so we had done like a community vote on chain through Mirror about what our fifth title was going to be and what we were going to build resources around. So some of that had community participation through that aspect. But everything else, we had already kind of specified what games we wanted to sort of like get into.

Nicholas: It was part of the premise of getting involved that those would be the games.

SirsuHayb: Right. And now that we've done that, we know at a very granular level, like what works and what doesn't. And so that's why as we're building Stadium, that's going to be like the new, unique way in which our community is going to self-organize and build teams around the games they care about to where now. it doesn't require governance for us to like. it will still require governance for us to like, let's say, fund some of these efforts. But Stadium is going to be a way in which you could build your own team around whichever title and game that you want without us. You don't necessarily need Blackhand to do it. But Blackhand could be a conduit to help fund the game that you want to compete in, if that makes sense. Cool.

Nicholas: So if people want to get involved or keep up with Blackhand, what's the best place to go and how can they get involved personally if they want to play or be a fan that is an owner?

SirsuHayb: Follow Blackhand on Twitter, follow Project Stadium on Twitter as well. I can like pin those tweets really quick. Yeah, sure.

Nicholas: I'll put them in the show notes too.

SirsuHayb: Because two days we are unveiling our first part of Stadium in which people can become players. And I'm very excited to showcase that in the next day or two. And then that's going to kick off pretty much what you're going to really be seeing for the rest of this year and to next year, because we have a slew of programming, both IRL and URL as far as events go.

Nicholas: So that's at Project Stadium is the Twitter. Yeah.

SirsuHayb: All I'm saying is that it's going to be fucking nuts. We've been so locked in getting all this stuff prepared, but it's hard to compose words, the excitement I have.

Nicholas: It's been a long time in the making, right?

SirsuHayb: Yes, it has.

Nicholas: I remember talking to you, not this last NFT NYC, but the one like nine months before about some of these ideas just as you were getting started. So it's cool to see it come to fruition.

SirsuHayb: Exactly. It's just one of those things where back then it felt very lofty to get to this point. And now that I'm at this point, I'm like, oh, yeah, what's the most crazy loftiest thing ever? Oh, yeah, that's buying a video game title. There are a few games that we have looked at that have recently come out that don't have publishers that are looking for that type of financial support so that they can proliferate and build their game. And I think with these very unique Web2 titles that are looking for non-traditional means of funding, non-traditional means of fundraising and non-traditional means of building a player base, this is where like Web3 I think shines its brightest, where it doesn't necessarily need to be completely native in order for it to really work. But you can use some of like the real cool like value systems and tooling that Web3 have and completely change the landscape of how folks have traditionally built things that are already out. And so I feel like, yeah, so I'm super excited. I want everyone to be a player or to at least like get into this to some degree. And the way that we're going to shape ownership for our teams and teams in the future, I think it's going to be very fun, very unique experiment. It's definitely going to be like a collaborative effort between us and all of our friends across, for example, PartyBid. It's not called Fractional anymore.

Nicholas: Tessera, right?

SirsuHayb: Tessera, yes, those guys. Zora and a few others. There's a lot of really unique things that we have for year two. So I'm very excited to kind of like tease those out over the next few weeks.

Nicholas: So we're going to keep our eyes peeled on everything Blackhand. Sersu, thanks so much for coming through and telling us all about it.

SirsuHayb: Thank you for the invite. Really excited to have had a chance to talk about it. If anyone has any questions, comments, concerns, you feel free to tweet at me, DM me. I'm always open. And Ronan, thanks for your kind words and great question as well.

Nicholas: Yeah, totally. All right. Thanks, everybody, for coming through for this week's Galaxy Brain. Next week, roughly the same time, more esports talk. And keep your eyes peeled for Blackhand's latest stadium platform ideas and new team wins, no doubt. I'm excited to see you continue competing. Thanks, everybody, for coming through.

SirsuHayb: Peace, y'all.

Nicholas: All right. See ya. Look forward to seeing you there.