Solana Mobile is just getting started | Chain Reaction Podcast

Hey everyone it's jacyn melanic welcome To chain reaction a show that unpacks And Dives deep into the latest trends Drama and news with some of the biggest Names in crypto breaking things down Block by block for the crypto Curious today's guest is Anatoli Yakovenko the co-founder of salana labs Which is the company that aims to help Build out the salana ecosystem salana is One of the most well-known layer 1 Blockchains and has been on fire lately In the world and for its flagship salana Mobile device The Saga phone last week Salana mobile also announced a new phone Called chapter 2 which will be released In 2025 and it opened up pre-orders for It and within the first 30 hours chapter 2 had over 30,000 pre-orders which Signals a lot of demand for the Next Generation phone but the road to this Point was not necessarily an easy one The Saga phone didn't see as much demand When it first launched in mid 2023 at $1,000 and the company soon lowered the Price to 599 in light of that but the Pretty crypto Savvy Community started Eyeing and buying the Saga device after People realized the dog Focus meme coin Bonk provided 30 million Bonk tokens to Saga owners for free which at the time Covered the cost of phone or you got Free Bonk and the phone depending on how You looked at it regardless The Saga

Phone then sold out almost overnight in Mid December and brought us to where we Are today so we wanted to bring Anolon To talk about the new device how things Were for The Saga phone game type and What's next in store with all that said Anatoli welcome to the show thanks for Having me yeah before we get into Everything I wanted to talk about why Salana launched this web 3 Focus Smartphone The Saga phone it's been About a year and a half since you Announced it and for the listeners who Don't know the backstory I just wanted To give you a chance to explain why I Launched this well like there's a couple Reasons one I think is that I spent most Of my career in Mobile right I worked at Qualcom for over a decade and I kind of Understand the industry I was one of the First kernel engineers in the platform Called Brew which was before IOS and Android there were a bunch of feature Phones that ran applications people Don't remember them but like it took a Really long time for phones to do Something else besides voice and that Was like downloading ringtones and then It took a really long time for people to Download their first application but What happened I remember we had this Kind of moment where this Bowling app Jamad bowling had like 2 million Downloads and that was by far a lot at

The time yeah yeah that was the biggest Success in Mobile like I think by a Factor of 10 and then in less than a Year the iPhone launch and everything Changed so I kind of see there's like The current phone market is very Saturated and it almost feels kind of Like the same situation and there's like A bunch of weird things that are Happening with crypto and most folks Probably don't realize this but like the Vast majority of App Store revenue for IOS and an Android it comes from Mobile Gaming and that's like a hundred billion Doll a year industry MH a lot of that is Like basically like loot boxes you know It's stuff that you buy in game these Things have no value much like nfts have No value it's just purely entertainment But Apple and Google take 20 to 30% cut Of that hundred billion Revenue just for Free right if you had anywhere in the World there was somebody that took a 20 To 30% cut of stuff like every Your business just to like have it on Their platform yeah that's like a Massive massive tax right like there Should be competition for this and it it It's really really hard to compete with Those platforms because they have such a Lock in and distribution once somebody Buys a phone they're not going to like Shop around for their loot box that They're buying in the moment in the game

Right like it's not like they're going To go like oh I'm going to go to the web Or some other store because it's cheaper They're like kind of already making that Purchasing decision and it's pretty hard To switch but what's weird with crypto Is that nfts Meme coins think of them as Transferable loot boxes right just you Don't think too much about it it's Digital content for entertainment it's Transferable so that transferability Makes it really really hard to work in An app store the only reason why Apple And Google can take that 20 to 30% cut Is because the developer owns all the Content and the user renting it and Crypto is all about digital ownership It's about you having true ownership of The content that you bought so unlike When you buy a movie on Amazon Prime you Don't actually own it Amazon owns you Have like a lifetime rent as long as They honor it but I'm sure the terms and Services say they can stop at any moment Or if they shut down will but yeah right Like but with an nft or something you Own it it's your content you have Everything that you need to actually Enforce that ownership and that means Like when you sell it magic Heaton can't List it for 30% higher in the Apple Store versus the web store you can't You're not they're not going to take Like a $10,000 nft and list it for

$113,000 in the iOS store and for $110,000 in the web store so it just Doesn't work like digital ownership kind Of breaks the whole App Store model so This is the opportunity that I thought Was there and it seems like it might be This is kind of like it it's really hard To build a phone it's really really hard To build bu a a competing distribution Channel to Apple and Google but the 203% Is so large that it kind of creates that Opportunity and this is something that We tried to do with the first device and It was a very slow start kind of what we Suspected is that like some developers Want mobile distribution and they're Willing to give away their content for Free to a different Channel because they Can monetize it later so if you know That you're going to get 20 to 30% on IO As a tax but you're going to get zero Tax in this other platform you're going To try to incentivize some of your users To switch platform so that was kind of The idea and it's easy with nfts and Crypto because you can just air drop Your users content and all of a sudden You kind of start creating these Network Effects somewhere else was it Salat Mobile's idea to give out the Rewards or Did projects come to you with that Mention of the tax and be like we want To build to DAP on your dap store and do It that way in hopes to avoid that tax

Or even build something through a mobile Device yeah that was the pitch that we Gave to all the developers look you're Never going to get traction inside iOS And Google they're always they're always Going to try to sandbox you and take That 20 to 30% even if you're getting a Bit more leniency right now in Google Play Apple is very much not giving any Leniency and in fact trying to now Monetize web purchases which is crazy so Like you see those platforms actually I Think build bigger and bigger walls and All the developers that we talked to Anyone that's ever tried submitting an Application to either one of these Play Stores felt that pain it takes weeks two Months of review it's like arbitrary and Capricious like they don't you can't Like we know those lines yeah you get Denied for weird reasons so like the Reason why we built the first phone is Because with developers we had instant Traction and I think when we launched The first Saga we had like you know Roughly 000 sales like on day one I Think that all of those went to Developers were basically our number one Users so we kind of saw that that Traction immediately and some of them Launched and like for every hundred Launches you get one hit right so that Was Bonk at the time when the Bonk Airdrop happened to The Saga V1 was like

Worth 10 bucks on every phone so it was Like very small and that's kind of what We expected like devs would give the Small kind of incentives for people to Go try out what they're building and Because crypto has these like price Dynamics right it's transferable like You have opportunities for things to Blow up and that was you know one of Those things happened to to be a hit What were the conversations like Internally before the Saga phone sold Out what were you talking about to like Generate more demand well like crypto Was going through a hard bare market and I think salana the ecosystem was I would Say feeling the worst of it so we were Just like looking for more devs to go Launch more stuff like it was I would Say like kind of in survival mode Because during that Chasm of Despair you Just need to survive until you have Macro turning around yeah something like Bon yeah not not necessarily even Bon You just need like I don't think Bon Would have happened had the entire macro Didn't turn around both in the ecosystem And globally in crypto at all and during Those moments like you read every Startup book in Silicon Valley you just Have to survive through the chasm that's All so we were basically in survival Mode trying to figure out but we were Still selling like 20 to 30 devices a

Day just not nothing it's not not a ton But like there's still interest from the Ecosystem you can kind of see like People talking about it and getting the Device and being excited about it so it Was still going but it wasn't going at At a pace that was interesting in like Growth way in any way yeah no I guess I Meant by the Bonk comment is that like It went from $10 to 500 600 maybe 700 at One point I don't remember you guys Could fact check me on this but I think That obviously helped as well and Obviously the rewards that the Saga Phone brought even Bonk aside there are Other ones out there you guys can look It up help Drive sales in December and Aside from the monetary aspect why do You think it's important to provide Users with Rewards or even incentives to Check out dobs and all these other Things well I mean like just think of it As developers trying to optimize Revenue If you're building for mobile why would You give Apple and Google 20 to 30% of Your Revenue if you already have a Distribution there and you have revenues There you would want to identify like Especially with mobile gaming usually Like 1 to 5% of your user base is going To generate like 80 to 90% of your Revenue it's huge power law distribution Right move those users over to Saga Sal Mobile and all of a sudden you've like

Increased your Revenue by 20 to 30% it Becomes very obvious and simple thing to Optimize if you can convince those users To switch and that's the hard part is Like giving those users an incentive to Go buy this device and like become Native crypto users in Mobile too the Motivation is there for developers to do This the question is like can you create Like an incentives that are strong Enough for user to change Behavior That's the really really hard part I Think because of how crypto works and Like people are buying these things for The pop right like they're buying Resources in RuneScape for like for fun right like You're looking for like the Opportunities inside like nfds and mem Coins and stuff like that those Incentives I think are maybe easier to Construct in crypto than in traditional Gaming but I suspect that at scale it Would work the same what I would love to See is if eventually like folks like Epic Tim Sweeney or people that are Really frustrated with Apple and Google To just go full crypto and like go start Incentivizing users to use like Salam Mobile yeah well if they're listening That's a a call to action from anatol Yeah do you think the people who are Buying the Saga phone in now chapter 2 Are buying it for like the web 3

Features are they using it as a main Phone do you use yours as like your main Device or is it solely for you to do Crypto related transactions things on Whatever you know the dabs yeah I kind Of I use both like I switch back and Forth all our like internal company like Security policies are optimized around Apple so kind of like for business I Would say I use apple stuff right for Nfts and gaming I use Android so I've I've gotten used to using both I've Worked on Android right so I've been an Android developer since the birth of Android so like I'm very familiar with It I think as an engineer it's pretty Easy to use multiple devices I've seen Folks in the ecosystem switch which is Pretty cool from Apple to Android I Think that's maybe the first time that's Ever happened it's like people willingly Switching from uh Apple to Android I've Seen some people full-time give up on Apple but um do you think salana would Have seen a similar amount of adoption Long term if it wasn't for these like Big moments like what we saw with Bon or Even like reward board models in general Yeah yeah I think all adoption is kind Of based on these like step functions You look at growth of any startup it's a Hockey stick right you build product you Optimize and you have very very slow Growth as you're iterating and all of a

Sudden you have like a step function Growth because you like figured out a Perfect formula and all the environment Variables aligned so that's always going To be the case I think the reason why You saw this salano ecosystem take off Is because like during the previous 18 Months all the ecosystem teams were Building Products grinding like Improving uxx and uis and everything Else like one of the best Founders is Like you know meow wolf where meow or Whatever his his Twitter handle is from Jupiter if you talk to him he gave like The best kind of gave me the best spiel About Jupiter is that like they saw During the entire bar Market just like All their numbers were dropping like Week after week and the thing that he Kept telling his team is that like those Things don't matter because macros Contracting like it sucks the bare Market sucks just make sure that the Current users that are still there are Happier so what they optimize for was That whatever the user base was still There just make the product better for Them even if the total user base is Shrinking just optimize and constantly Make the product better and I think That's really what drove adoption across The whole ecosystem and it's kind of Like the goal for us with mobile is like Give developers a platform where they

Can optimize make the product better They have secure signing they have these Guarantees that they can get on normal Devices and they have a distribution Channel that's free and open and Crypto-friendly so it's much much easier For them to do that yeah and on that Note we're going to take a quick break Before we get into all things chapter [Music] 2 and we are back I want to Pivot into Chapter 2 and how the team arrived at The decision to launch this new phone I Know Raj goal your co-founder founder Mentioned to me that it was already in The works but kind of walk me through What the decision process was like for That and why you guys even wanted to Create another one after Saga sold out It felt like there's an opportunity like The timing in the market was right we Were trying to figure out what the next Device is going to look like what should We be optimizing for and I think just The timing worked out right around that Moment what we want to accomplish here Is that like we really need to get to a User base that's big enough for Developers to think of it as their first Distribution channel in crypto and if we Can get to I think 25 to 50,000 active Users that are actively using nft Platforms and Jupiter and all the kind Of daps that move digital assets through

Sal ecosystem that's actually like a Very compelling user base if you look at Magic Eden tensor openc the amount of Users that generate those very large Revenues and volumes is pretty small It's like 5 to 10,000 if we have a very Very target-rich environment of like the Spendest users in the internet it Doesn't matter if it's only 100,000 Users it's much better distribution Channel for devs than the big app stores So this is kind of like that weird Asymmetric opportunity if you have very Small percentage of user base that Generates vast majority of your Revenue You can actually just Target those Directly and build a very compelling Platform and it seems like the timing Was right to kind of capture the Attention of all those folks so the kind Of features that we want to have in this Device is like cheaper and wider Distribution and more more markets that It's available in and like obviously Seed Vault and dap store and things that We'd like to add but we haven't speced Out yet are like cibil resistance and Other like kind of weird crypto specific Features aren't available in normal Phones yeah so for the chapter 2 how Will the device itself be different from Saga will it also be like an Android Device SL smartphone or something else Yeah okay yeah it's definitely going to

Be Android it's too hard to build your Own OS like that's just uh I don't know Maybe it could be like a little like Slide flip phone or something I don't Know no that would be ridiculous but um With a keyboard yeah Right like a little Blackberry phone or Something no to the people listening do Not put that out there but what did you Do to bring the cost down and make the Device cheaper compared to like the Saga Phone if it's the same device what makes It more affordable I mean just time time Is in the side of making things Technology cheaper so like every year There's cheaper chipsets cheaper screens That's true that are higher quality so Like that's basically easier I think When you look at like the flagship Apple And Samsung devices like the top end Ones will try to add the bleeding edge Technologies available and cameras and All those other things and that will Increase the cost of but even there like Their profit margins are huge we're Basically trying to build a compelling Device at break even costs and like at $450 I think we can accomplish that like Build a a really really good device with Like kind of all the features that People expect at that price point plus We want to add stuff like seed Vault and Potentially uh Cil resistance mechanisms And stuff like that what is civil

Resistance mechanisms like one of the Challenges with crypto is identifying Like who your users are versus like Somebody that is farming like a Particular airdrop or incentive Mechanism with multiple identities oh It's like proof of personhood and what Yeah yep and there's stuff that Hardware Can help with like making it more Challenging to sible those mechanisms There's no perfect solution it's never Going to be like completely perfect but You can use the hardware to like make it Harder to do that and we'll see if we Can pull that off is the 450 price a Break even number for you guys or you'll Be profiting on that I I hope it's not a Money Pit like it's really really hard to Build Hardware I think we can break even That's kind of like my hope without Accounting for engineering cost but like Just in the device itself it's pretty Hard to do that at those unit counts Once we get over like 250,000 sold a Year or something like that I think we Can start thinking about like it's going To be a profitable like Revenue stream But building Hardware is just the Initialization costs for a line are so Large that it becomes very hard to do That yeah speaking of number units sold You just said 250 there I'm curious what Is the goal now cuz I remember when you

Were at actually Tech crunch disrupt in 2022 you said the goal wasn't to sell 10 Million units and you'd be very happy With 25,000 50,000 units being sold in The next year and you're honestly kind Of near that number I guess it's 2024 Now but Raj told me last week that it Had about 50,000 total owners which was Across chapter 2 and Saga and those are Like pre-existing ones and then like Pre-orders you know everything but has The goal post for the number of units Sold changed given that the initial goal Was met and what number would you like To hit now is it 250 are we going to That 10 million you know like where we Now no no not yet 100K like is my target So like we sold 20,000 last year and That was great like at the end it was a SLO to get there yeah but that proved Out that there is some interest like That there's nonzero interest it's Enough to go like to the next stage and The pre-orders clearly like I think show That there's demand because the sale Numbers were pretty ridiculous I mean it Sold better than like the top CES device Right they were selling like 10,000 a Day we sold like 30,000 pre-orders in 30 Hours so there's clearly demand I think From the crypto user base for this like New device new platform how big that Demand is it's always going to be macro Dependent are we about to enter another

Bare Market or not a lot of factors go Into that but my target is can we get to 100,000 deployed devices that's a very Compelling user base because it's very Target-rich for developers the people That are buying this are the the same People that love nfts and mcoins it's Exactly like the target set that you Want as a crypto mobile app developer Those are the folks are the spendest Folks on the internet you can make games For them you can do whatever right There's a million ways to monetize that And if we have that Loop going right Devs build apps people have fun with Those apps they go buy the phone right It starts that Snowball Effect then we Can kind of start talking about like how Big is this distribution channel is this Device line can be better than break Even like actually profitable and stuff Like that so what number of units Pre-ordered is it at now it's I think we Broke 40,000 yesterday I haven't checked this Morning but like that's a pretty healthy Number right like if you do that many Like in in week one that's kind of 40% Of your Kickstarter in like the first Week that's a very very very very Healthy number right feels like 100k is Achievable unless macro like totally Goes bad is it direct to Consumer are You putting it on other platforms as

Well uh it's direct to Consumer y would You like consider putting it out on I Don't know Amazon or other networks I Think it's too early honestly like the Thing is that like we don't need random Person to buy this phone we need like Crypto person that uses magic e and open SE like we need those folks right like Mother yeah Right so like I would love to do that I Think for the third one like if the Second one is a success and we see app Developers and all this stuff happening The third one like okay how do we get to A million units then we have to talk Distribution channels and that's like a Real thing there's going to be a third Phone uh only if the second one's a Success I don't Know well it seems like it's going well So yeah there's a million ways for us to Fail like this is kind of like I don't Know if you've seen like the Domino meme Like the guy pushing the little Domino And then the big one Falls right so like The $10 per device Bonk air drop a year Ago is the little Domino is the big one Is breaking the app store duopoly right Yeah I guess you know with that said you know We had this December Boom the sagap Phone sold out you have chapter 2 now How has salana Mobile's strategy changed Or evolved from like the beginning to

Now the big vision is the same right we Really want to build this open platform For developers that's crypto-friendly Because there's like a huge opportunity To kind of undercut the fees that both Google and apple charge I think the Tactics have adjusted quite a bit Because I think we see users and Developers and like both take interest In this device because the market I Think has heated up quite a bit in Crypto so we kind of have I think to Move fast to kind of capture the moment Yeah and you kind of mentioned this but I wanted to ask is the ultimate goal With having this phone and the DAP store To continue going up against Google Play And Apple's app store or is it about Something bigger now or is it still that Mission which is Big that's a pretty big Mission Right yeah I just didn't know if there was like Another thing that you guys want to like Focus on like we want to be X you know I Think the the most important thing that Crypto is doing for the world is self- Custody it's the idea that like you as a Human you have keys that you understand What they do and they're secure and you Know how to sign with them I think That's the most powerful tool because It's secured by math it's impossible to Break it's the first time that you can

Say that an individual person has as Much power right in a in like a game as The entire universe which is like a Really really cool thing to empower Everyone in the world with this Unbreakable math so the goal here is Really kind of that bigger broader Vision if because we are kind of biting At the heels of Google and apple and It's just if it gets to a significant Enough bite that they change their Policies and all of a sudden everyone in The world has self- custody and open Platform for crypto that is the the big Change right that's the big shift that Could happen like we don't have to do it Ourselves you know it only takes one Participant in the market even if They're small to change the entire Equilibrium of the market that's the Hope I think is that our efforts change How mobile operates and everyone in the World has like secure signing and like Great uax for it and all this stuff like Becomes just much much better yeah we've Seen this in other you know sectors and Categories with companies that kind of Change the way we operate dayto day so It's definitely possible but looking to The Future the chapter 2 device won't be Out for at least you know another year Or so 2025 which is crazy that's so soon But what can Saga owners or people who Don't have a saga phone people who are

Interested in salana Mobile look forward To in the meantime well if you're a Developer there's an SDK so you can go Download the SDK start building and Start deploying your apps to The Saga Dab store that's easy mhm and if you're A developer go please do that because at The end of the day we need you to build Awesome apps that users love so they go Get this device so there's grants from The salana foundation for mobile apps And like there's tons of help from Salana Labs on getting started and Things like that so please reach out Awesome well thanks so much for coming On the show andat toally was a pleasure And I look forward to checking out Chapter 2 once it's out for sure thank You well be back next week with Conversations around what's going on in The wild world of web 3 with top players In the crypto ecosystem you can keep up With us on Spotify Apple music or your Favorite pod platform And subscribe to Our companion newsletter also called Chain Reaction links to the newsletter And stories we talked about can be found In our show notes and be sure to follow Us at chain reaction on Twitter chain Reaction is hosted by myself Jaclyn Melanic and produced by Maggie stamitz With assistance from Yad karney and Editing by Kell Bryce Durban is our Illustrator and Henry pette manages Tech

Crunch audio products thanks for Listening in see you next [Music] Time

Coinbase
OUR TAKE

Coinbase is a popular cryptocurrency exchange. It makes it easy to buy, sell, and exchange cryptocurrencies like Bitcoin. Coinbase also has a brokerage service that makes it easy to buy Bitcoin as easily as buying stocks through an online broker. However, Coinbase can be expensive due to the fees it charges and its poor customer service.

Leave a Comment

    • bitcoinBitcoin (BTC) $ 67,264.00 5.72%
    • ethereumEthereum (ETH) $ 3,522.32 3.24%
    • tetherTether (USDT) $ 1.00 0.15%
    • bnbBNB (BNB) $ 594.11 4.49%
    • solanaSolana (SOL) $ 170.41 8.26%
    • staked-etherLido Staked Ether (STETH) $ 3,521.88 3.18%
    • usd-coinUSDC (USDC) $ 1.00 0.02%
    • xrpXRP (XRP) $ 0.579311 1.72%
    • the-open-networkToncoin (TON) $ 7.28 0.53%
    • dogecoinDogecoin (DOGE) $ 0.125709 6.16%