First Tribe3 AMA Recap - Session 1
Tribe3
0x1Bbd
August 24th, 2022

This voice AMA with Tribe3 team was on Discord on 17 August 2022.

This a transcript recap of all the questions and answers from this AMA. There will be 3 separate recap for these 3 sessions.

AMA Sessions:

  1. Tribe3 Introduction
  2. Pre-selected Questions from Community
  3. Live Q&A Session

Speaker:

  • Leo - Founder
  • Jeff - Product Lead
  • Jo - Growth Lead
  • DavN - Moderator

Session 1 - Tribe3 Introduction

Q1: What is Tribe3?

Leo: Tribe3 is a gamified NFT futures exchange. There are 3 layers to it:

  • First an NFT perpetual futures exchange that allows users to trade NFT collection-based perpetual futures - long and short with leverage as little as 0.01ETH
  • On top of that, two social and gamified features including Tribe Battle and NFT Avatar. I will go into details later along some UI sneak peek

Q2: Why did you choose “Tribe3” this name?

Leo: If we think about different NFT communities, the vibe and sense of belonging we have, we are really just like different little tribes. Each community has its unique story and vibe. Perhaps because of how different the tribes are, these communities tend to stay in their own discord and we haven't seen many satisfying ways for NFT communities to connect / interact with one another other than the fudding we see from time to time.

So we thought it would be ideal to standardize NFT financialization through the use of futures and at the same time creating features that allow tribes to come together and interact socially and even challenge one another. So Tribe3 really is like a campfire concept that hopes to bring NFT traders and communities together and put their money to where their mouth is.

Q3: What is NFT Futures? How does it work? Why do we need NFT Futures?

Leo: That's a great question. Let’s take a step back to define the word “futures” before we go specifically into Tribe3’s NFT collection futures.

What is a futures contract?

Let’s look at it from the context of Crypto futures. A futures contract is like a side bet between two friends. Instead of buying Bitcoin on a spot basis, two friends can bet the BTC price is going to go up or down by entering into a side bet.

For example, Alice and Bob can have a side bet and be on different sides of a Futures Contract. Say Alice longs 1 BTC while Bob shorts 1 BTC at price $10,000 so when BTC price decreases to $9,500, Alice is losing $500 and Bob is winning $500. Although both Alice and Bob actually didn't buy any BTC, in this side-bet contract, one is making $500 and the other is losing 500. Futures is like a way to enable side bets on a large scale without actually having to trade the underlying asset (i.e. BTC in this case).
For example, Alice and Bob can have a side bet and be on different sides of a Futures Contract. Say Alice longs 1 BTC while Bob shorts 1 BTC at price $10,000 so when BTC price decreases to $9,500, Alice is losing $500 and Bob is winning $500. Although both Alice and Bob actually didn't buy any BTC, in this side-bet contract, one is making $500 and the other is losing 500. Futures is like a way to enable side bets on a large scale without actually having to trade the underlying asset (i.e. BTC in this case).
Futures in the traditional sense have a delivery / settlement date where any unrealized gains or losses are realized. Eventually people came up with the idea of perpetual futures and removing the need for settlement, which means this side-bet can be in perpetuity. i.e. Alice can continue to remain in this side bet with Bob until one of them decides they want to exit the position, at which point whoever wants to exit must find another party to take over the side bet.
Futures in the traditional sense have a delivery / settlement date where any unrealized gains or losses are realized. Eventually people came up with the idea of perpetual futures and removing the need for settlement, which means this side-bet can be in perpetuity. i.e. Alice can continue to remain in this side bet with Bob until one of them decides they want to exit the position, at which point whoever wants to exit must find another party to take over the side bet.
For example, Bob has an unrealized gain of $500 and he wants to get out of this position and take profit. Bob then sells his short position to Susan at BTC price of $9,500. At this point, Bob no longer has any exposure to BTC as Susan has taken over as the party in this side bet. On a larger scale, the futures market is a series of side bets between different traders. Exchanges like Binance and Tribe3 provide a marketplace for people and facilitate the trading of these futures contract positions.
For example, Bob has an unrealized gain of $500 and he wants to get out of this position and take profit. Bob then sells his short position to Susan at BTC price of $9,500. At this point, Bob no longer has any exposure to BTC as Susan has taken over as the party in this side bet. On a larger scale, the futures market is a series of side bets between different traders. Exchanges like Binance and Tribe3 provide a marketplace for people and facilitate the trading of these futures contract positions.
On NFT collection price futures, taking BAYC as an example, instead of BTC, we are betting on BAYC collection floor price and the underlying currency for pledging collateral will be ETH. If you are a Tribe3 user and you think BAYC floor price is going up, all you need to do is to enter into a long position in the BAYC futures contract by pledging a certain amount of collateral. Depending on where the BAYC price goes from here, you may incur unrealized gains or losses that eat directly into your collateral amount. When you are ready to take profit / cut losses, you can go ahead and close your position fully or partially.
On NFT collection price futures, taking BAYC as an example, instead of BTC, we are betting on BAYC collection floor price and the underlying currency for pledging collateral will be ETH. If you are a Tribe3 user and you think BAYC floor price is going up, all you need to do is to enter into a long position in the BAYC futures contract by pledging a certain amount of collateral. Depending on where the BAYC price goes from here, you may incur unrealized gains or losses that eat directly into your collateral amount. When you are ready to take profit / cut losses, you can go ahead and close your position fully or partially.

So why do we need NFT futures? As long time retail traders in stocks, crypto and NFT, the Tribe3 team experienced many pain points in NFT trading:

  • There's no way for us to hedge/short
  • The ticket size is really high for something like BAYC
  • There's no leverage available
  • On top of that, you would have Opensea platform fees and royalties. So basically every single time if you want to flip an NFT for profit, you are taking a 5-15% hit.

NFT futures remove all those pain points because you're simply entering into a side bet with other traders without trading any actual NFTs. All you have to do is:

  • Long and short a contract and have a side bet with other traders or the system
  • Bet on prices going up and down, not just diamond hand-holding one NFT
  • Bet with leverage like what you do in crypto trading
  • On top of that, our platform only charges 0.5% on each trade which is much lower than the open platform fees like Opensea and LooksRare. There's also no royalty involved because there's no underlying NFT transaction.

Q4: What is the difference from similar platforms? What are the competitive advantages of your project?

Leo: There are not a lot of NFT derivatives or futures platforms out there. We have seen spot market AMM platforms like Sudoswap and the OTC market gaining market share, these platforms are not really our competitors but are very important part of the ecosystem for us going forward.

The few competitors out there are single layer decentralized exchange platforms that basically is a similar version of a lot of other crypto decentralized exchanges. That means a very defi-driven user interface with technical analysis tools. At Tribe3, we focus on making the UI more simple and user-friendly for the NFT community which is not as familiar with futures trading. Most just want a very easy and efficient tool for them to gain exposure to the NFT market with low entry barrier by simply longing or shorting.

In our mock-up UI here, if you are interested in trading BAYC, all you have to do is really think about whether you think the price will go up or down.

  1. If you think it's going up, you long. If you think it's going down, you short.
  2. Choose your bet size and the leverage level
  3. Go ahead long or short a BAYC contract. Simple

You don't even have to buy one BAYC at the minimum. You can actually bet on as little as 0.01ETH.

The team here at Tribe3 focuses on speaking to users every single day and that people in the NFT community who trades and follows the NFT market every single day.

The feedback that we've gotten is they don't want a boring DEX that is only about trading. They want community features. This is why we have included two gamified and social features - the first being a side battle feature. Remember when Moonbird first launched. There are a lot of chatters that Moonbird would flip Azuki and they eventually did. One of the things that I really wish I could do was to directly bet on which collection would outperform and for two NFT communities to battle with each other instead of just trash talking on twitter.

Each side of the community is saying that they would flip each other in floor price. But they are just talking on Twitter and I was thinking what If there's a way for them to actually directly battle and put their money where their mouth is. The battle feature is a simple and elegant solution, which allows people to bet on different collections floor price relative performance over a specific timeframe.

For example, depending on the next seven days performance of the floor prize, if Moonbirds floor price goes up by 10%, and versus Azuki floor price goes up by only 5%, then Moonbirds will win this battle.
For example, depending on the next seven days performance of the floor prize, if Moonbirds floor price goes up by 10%, and versus Azuki floor price goes up by only 5%, then Moonbirds will win this battle.
In this UI, there are three collections in this battle. Basically, whoever that actually has the most increase in floor price from a percentage change point of view will win this battle. Moonbirds won this battle and so the users who betted on Mooonbirds would take all of the battle pool of Tribe3 tokens (according to the odds that were established at the betting cutoff).
In this UI, there are three collections in this battle. Basically, whoever that actually has the most increase in floor price from a percentage change point of view will win this battle. Moonbirds won this battle and so the users who betted on Mooonbirds would take all of the battle pool of Tribe3 tokens (according to the odds that were established at the betting cutoff).

Instead of just talking trash, communities can finally put in money and challenge each other on the Tribe3 platform. To our surprise, we have seen more excitement from the community on this feature than the trading feature.

When you trade, you want to keep track of how well you are trading and have a little bit of NFT trading or collector profile as well. What we are creating here is like an NFT trading character that each user will have per wallet. As you trade different NFT collections on our platform, depending on your trading behavior, you are going to win different NFT in-game items on the Tribe3 platform which you can then equip onto your character here. Everyone can win different in-game items, equip different items to customize their own NFT avatar and then in turn, maybe even trade these in-game items with other users as well. This itself is a little bit like an RPG game that users can play around. These in-game items are mostly aesthetic but also a few have utility such as discount in trading fee / battle fee.

We think all these social and gamified features really give us an edge in penetrating the NFT market and increasing user engagement. We are also not just a simple DEX that is single layer and competes purely based on trading fees.

Q5: Who are the team and investors behind?

Leo: I came from a traditional Finance background - started in New York doing investment banking at Citibank and then back to Hong Kong to do leveraged finance. Then move on to a European based private equity firm called EQT Partners doing pan Asia buyout. Personally I have been trading stocks and equity index futures my whole life and got into crypto in 2018.
Really got involved in NFTs since mid-last year where i take more of a trader’s approach and have been really frustrated by the inefficiencies in NFT trading.

Jeff: ​​My background is a mix of finance and technology. I started off my career at investment banking at Citibank then moved over to the technology sector. First as a software engineer, then as a product manager. So mostly recently, I was a product manager with Mark AR, an augmented reality company that was supported by Google. In my own time, I do trade quite a bit of crypto, futures, index futures, also a collector and a gamer at heart.

Jo: I've actually been working at multiple unicorn startups like Uber and Klook. I mostly work on the partnerships, growth and marketing side of things. I got involved in crypto 4 years ago when I worked in OKLink. Since then, I have always been in the market like trading different tokens, getting coins in IDO. Then later on, I was in Huobi exchange working on the growth and marketing side.

Leo: On the investor side, we have an incubator and pre-seed investor in Newman Capital. They are an Asia based venture capital firm / family office. Their portfolio investments include both Web2 and Web3 exposures, e.g. Polygon, SpaceX, Reddit and Dapper Labs etc. On the LP investment side, some of the names are Shima Capital, IVC etc. They have been very supportive in different aspects of our building process. We are very excited and grateful to have their support.

Q6: What is the roadmap of the project?

Leo: It's certainly a very exciting time for the team. On a near term basis as you know we're looking to launch the private testnet with a lot of strong support from the OGs. A trading competition will be in a couple weeks.

Because our platform is a multi-layer platform. There's trading, there is NFT avatar, there's also Tribe battle. So we're looking to focus on trading at the moment. We are targeting to have the mainnet public launch in Q4 of this year. On Tribe battle, that will probably come a little later, probably after public mainnet launch in Q4. But we're trying hard to push it on the testnet basis in Q4 2022 as well, depending on how much capacity we have. So that's sort of like the near-term roadmap of the project. 

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