Using Web3 to incentivize a better life with Puffpaw CEO & VeChain comms lead

[00:00:03] Jake Campton: This is a kind of evolution of that. You can get rewarded for driving a Tesla.

[00:00:07] Reffo Tse: We know the negative level. We know when you are vaping, using the device. People are thinking, ‘Oh, are you paid then to smoke?’

[00:00:16] Jake Campton: You want to pick up a green energy tariff. Okay. That's now 12% more expensive.

[00:00:21] Reffo Tse: That's not human being. That's not human behavior. That's abnormal.

[00:00:25] Elisha Owusu Akyaw: Hello everyone. Welcome to Hashing It Out with your guide, @GHCryptoGuy. We are taking a new form of some sort with the podcast. We'll be doing 2 to 3 guests moving forward. I want us to do some roundtable discussions around very important parts of the Web3 space. One of my favorite events that used to happen at the very early stages of the crypto ecosystem, or when I joined the Web3 space, was the Satoshi Roundtable. I just liked the concept of multiple projects going to an event, having a conversation about the way forward for the Web3 space. So, hashing it out Roundtable Edition or Roundtable series. And the first Roundtable discussion we’re having is about using Web3 as an incentive so people would take more sustainable action, people live better lives, and people will just do the right things or would nudge people into doing things that we think are healthy and are good for society. Joining me, we have Jake. Jake is the communications lead and community advocate at VeChain. Hello, Jake and welcome.

[00:01:30] Jake Campton: Hello, hello. Thanks for having me, man. It's great to be here. Looking forward to diving into the topic today.

[00:01:34] Elisha Owusu Akyaw: Amazing. We have Reffo. Reffo is co-founder of Puffpaw. Hello, Reffo. Welcome.

[00:01:41] Reffo Tse: Hi, Elisha. Hello, Jake. Hello, everybody. Thanks for having me here today.

[00:01:44] Elisha Owusu Akyaw: Amazing. So, I’m going to ask both of them the boring question that I ask everyone before we get into the fun stuff, which is ‘How did they end up in Web3? What are they building?’ But I think how you ended up in Web3 is potentially an interesting story. So, let’s start with that, and then I’ll ask you about what you are building in Web3 later on. So, let’s start with Reffo. How did you end up in the Web3 space?

[00:02:06] Reffo Tse: Yeah, I’m not an OG. I’m not a, you know, long term, not everybody else getting like 2017–18. I actually got in right during the pandemic. I was in real estate industry for a long time before the pandemic. During the pandemic, there’s nothing to do, and I just get bored. I was just doing some part time advisory for venture capitals and all of those investors. They were crazily looking into Web3 and eventually get me in. I was just super interested with everything. So, really started to trade NFTs and trade tokens during the DeFi NFT summer at that time and had a great experience just being a player in the space. Um, gradually started to find, to figure out how I can build my own project and how to better engage with this industry. So, yeah, it’s really start from the fun side of as being a daily user of the Web3 that got me here.

[00:02:59] Elisha Owusu Akyaw: That’s interesting. Jake, tell us your story.

[00:03:02] Jake Campton: Yeah, mine was, well, kind of similar. I basically was doing a master’s at the time, and then I was in the library one day, and I was reading about Bitcoin price going up. I was like, oh, ‘What's this?’ I started to look into it and then had a bit of fun at the 2017 bull run, and that sparked my curiosity. And then I started kind of looking around at the technologies and what actually was blockchain, what were its use cases like, where was it going? That kind of stuff. So, once I dove down the rabbit hole, I found Ethereum, found VeChain, saw applications beyond just the money side, I was hooked because I instantly thought that this is going to be the future of data sharing, and it’s just continued to evolve since then. So, it’s amazing to see, especially the last kind of bullish wave, all these new startups arriving like Puffpaw [unintelligible], which has been around a long time now. But yeah, really cool to see so many innovative projects like embracing blockchain at their core, and I think it’s the next-gen business model. So, yeah, I’m really excited to be part of it.

[00:04:01] Elisha Owusu Akyaw: Great. So, both of you came in for the tech and not for the money.

[00:04:06] Jake Campton: A little bit of both.

[00:04:09] Elisha Owusu Akyaw: I think that}s true for all of us. So, let’s get into what you are building. This is how I want us to go about it, specifically because of the conversation that we are having. You can mention the project you are working for or working with and then see what the project is generally doing. But I want us to specifically mention how the project is incentivizing people to live a better life with Web3. So, I’ll start with Jake, and then I’ll come back to Reffo.

[00:04:34] Jake Campton: Cool. So, yeah, we’ve built a kind of ecosystem of apps — our kind of started in 2022. Just for a brief overview, obviously, we were well-known for our supply chain stuff, and we’ve done a lot of real-world data management stuff. This is a kind of evolution of that. I’m not going to go too deep into the weeds here. We’ll get into the platform itself. But essentially, what we launched was this ecosystem called the better ecosystem. And as you obviously indicated by the the topic of the show, it’s all about applications that incentivize users to perform certain actions and basically getting a reward for that. So, at the moment, we’ve got 10 apps that cover all kinds of different manners of people’s daily lives. And, of course, the aim is to keep growing those. We work actually with Boston Consulting Group. So, what we’ve launched at VeChain is a platform of incentive-based apps called Better Apps. And the rationale of this, they’re all targeting some kind of sustainability-related action in some way. And when I say sustainability, that can be health-related; it can be social, environmental, like sustainability isn’t just about being green or whatever. Essentially, it’s a platform for apps that reward users for doing certain things. So, for example, you mentioned mugshot earlier. If you can demonstrate that you didn’t use a disposable knife receptacle for your coffee, you can get a reward for that or clean a fire where you can use an app that uses AI and photography. Basically, you can clean up the local environment — earn a reward for the amount of waste you’ve kind of removed from the environment. Or, you know, there’s a bunch of apps out there, like [unintelligible] a really cool one. You can get rewarded for driving a Tesla; that will be expanding to other EV cars down the line.

And then we’ve got other ones that just come online, like Green Commuter, that rewards you for taking a sustainable transport through the Strava app. So, it’s a direct API integration there. And you know, if you jog or you cycle to work, for example, you get rewarded for taking more sustainable travel but also improving your health because that is a sustainability objective as well. So, really cool apps that, kind of, they leverage data, then they tokenize it and then they can kind of create an impact report, which could be related to carbon emissions or paper waste or all kinds of different kinds of reduction activities, which have an economic value. Then that gets tokenized onchain, and then the user gets rewarded with that value. So, it’s about creating that incentive layer for all different kinds of things you can do in your day. And the goal is essentially to build an ecosystem where you can use it every day from start to finish. Like, you wake up, you use X app to perform X function. You go to work, you drive an EV, you run whatever. Like, you get rewards. And yeah, it’s just like helping encourage people to create better habits, but also making it so that, like, being sustainable or being green or whatever isn’t a tax. Because I think that’s the current challenge is, like, when people want to do certain activities, there’s sustainable activities that can be an extra cost imposed or all that kind of stuff. So, this is trying to flip that script as well. You perform these activities through these apps, but then you’re actually creating value rather than having to spend more to do those things.

[00:07:36] Elisha Owusu Akyaw: Sounds really interesting. Reffo, what is Puffpaw building?

[00:07:40] Reffo Tse: Yeah. So, for Puffpaw, we started like six months ago, and we are basically using a model vape-to-earn model to incentivize smokers to quit nicotine addiction. I think we’re pretty early in the stage, so there is a lot of things that I would like to clarify, but basically, we’re using a token incentive, financial incentive to help people to quit nicotine. For our main product, we have the vape, for sure, right? We started from the hardware. The best thing about that part is we have the Bluetooth connection, the sensors, chips for each of the pod and of the vape so that we can monitor the smoking activity. We know the nicotine level. We know how many pops. We know when you are vaping, using the device. And we are requiring users to carry that device with his mobile phone at all time, every day, so that we can keep tracking and understand what’s his smoking activity. And based on that data, we can create a file mechanism to help him to lower the nicotine dosage. So, that’s the first part we are doing here. And just to go a little bit deeper into that mechanism. So, there are different nicotine levels. Different nicotine levels comes with different efficiency of financial incentives. So, if you go with the non-nicotine vape, which is our main product now, Nicotine Pod, you can maximize your daily rewards.

But if it’s with 1% or 2% or even higher of the nicotine level, you will lower your daily rewards. So, it’s a game between your financial incentive and your nicotine addiction. So, if you really care about a financial incentive as a, you know, we started from the Web3 users, right? So, smokers in the Web3, if you care about that financial incentive, we will incentivize you to lower your nicotine dosage on a daily basis in order to make more of that token rewards. So, that’s the first thing we do. The second part is that because this device will help us to collect tons of data, instead of selling users’ data, we use the token to incentivize users to provide their data store off the chain. It’s an encrypted vault and put the key onchain so that only user themselves will have the access to their data vault. The data is pretty valuable here — the reason is because right now, in the traditional world, in the Web2 world, there’s no way to collect this type of data, which is, first of all, consumer data from smokers. Secondly, this is health data, respiratory disease-related data directly coming from 1.3 billion smokers subhealth populations. So, all of the data right now, even during or after the pandemic, nobody’s collecting such data.

So, what we do here is to use token to incentivize users to create that data vault. And using our platform, they can determine which third party they want to sell their data to. So, our thesis is that retail users, consumers really don’t care about privacy. They really don’t. It’s more for a tech or infra perspective, like people say, ‘Oh, data sovereignty.’ But the truth is that people more care about monetization. What if we can help them to control, to manage their data, as well as to monetize from that data that will create so much value in a 100 times better way to incentivize people to keep doing it, to keep behaving in that way so that they can monetize from their data by selling it to different data consumers over and over and over again? And the most important part is this is dynamic data. Every day you are behaving differently. You are smoking differently. Your health condition is different. So, with our hardware and also pairing with our mobile app, we’re collecting tons of these dynamic data and also their background information to put in the same data vault as his more comprehensive profile picture of this user, so it can keep earning not just from the gate to earn game to lower the nicotine, but also to monetize from his own consumer data.

[00:11:43] Elisha Owusu Akyaw: Okay, so one of the biggest takeaways from both answers is how building an ecosystem that incentivizes people to do better with Web3 technology also involves bringing in other forms of technology or things that come from other sectors. So, for example, with VeChain, there’s an AI component. With Puffpaw, there’s a hardware component. How has it been combining various components that are outside the Web3 space, or traditionally are not in the Web3 space, to build these different applications or these different ecosystems? I’ll start with Reffo.

[00:12:24] Reffo Tse: That’s a very good question. We are in the deep-end sector decentralized physical infrastructure network. So, we have to use our own hardware device in order to pair with the blockchain, to use the blockchain technology, to give it more value on the Web3 side of the mechanism. So, for the hardware, it’s coming from the traditional world, it’s coming from that manufacturing that traditional Web1 industry, Web1 business. And to be honest, like our team background, we are coming from the [unintelligible]. We know how to build apps in-house. We have that manufacturing production capacity so that based on the traditional hardware, we did a lot of innovation, we put a lot of structured adjustment, and also put a lot of additional components in order to protect users from Sybil attack. When you carry the hardware, it’s actually even harder to make sure that everybody is using this product on a very fair level, comparing to the DeFi to any other onchain applications because that is fully onchain, and you can easily access to all of the data and fully control. But for the hardware, you never know. User carry that hardware, no matter what type of hardware, you just don’t have access. You don’t know where he is, who he is, and what he is doing with that hardware. So, a lot of the innovation or the hardware we do is to build a lot of tiny components into the hardware so that we can monitor.

We know that nobody else can copy paste, can do this type of their own version of the device, so that only us have the full control of that device made by ourselves. For example, there’s a chip on each of our Pod and on each of our [unintelligible]. It’s encrypted. It doesn’t make sense for any of the people out there trying to do the Sybil attack by creating their own paths and try to match with our vape because they don’t have that chip, and our mobile app will not recognize that vape or Pod that is not produced by ourselves because they don’t have that identification number. So, a lot of that application level, that type of feature, we have to make sure the software is connected with the hardware on the encrypted level so that we can make sure it’s our users buying our product, getting into our game, and to compete with each other on a daily basis, try to help them to quit smoking. And it’s not for the smoking cessation process. So, yeah, it’s really a collaboration between Web1, the hardware side and Web2, the software side, the mobile app, and then with the blockchain technology, which is the onchain smart contract for the incentivization.

[00:15:06] Elisha Owusu Akyaw: Sounds interesting. Jake, what about the VeBetterDAO, VeChain, AI and other components you need to add that are usually not Web3 components?

[00:15:16] Jake Campton: Yeah, I mean ours we use a lot of existing tech. We haven’t had to create our own in that sense. Hardware wise, we obviously leverage AI. I mean, very popular tool. Anything image-related nowadays obviously has a lot of power, and we use a lot of existing, kind of, IoT stuff. So, mobile phones, people already have them to hand. Trying to merge the Web3-Web2 experience is our approach. I guess the same tough parts. Yeah, using things like social logins and the expected app flow. Yeah, it’s more about for us merging and synergizing what exists. I don’t speak from a technical perspective, so I can’t necessarily comment on the nuances of how it was to integrate those technologies. But I know that from an observational perspective and output perspective that they work very well together. You can set one of these apps to your home screen very simply, and you know that all the kind of software components run in the background. So, I mean, from a user experience, which is probably I’m more on the lay side than the actual user side, the dev tech side, these things have come together very seamlessly, and there’s always tons of new, great tools coming to market. I mean, I see our dev team was sharing stuff, and it’s quite impressive the pace of new tools that are kind of emerging at the moment. So, making the blockchain integration experience with daily life certainly a lot more seamless. I mean, it used to be a lot more clunky, but now use an app. Have social logins, have your guest fees delegated. Not really. No, you’re using a blockchain app necessarily. You just get these points which do have monetary value. But it’s not, like, ‘Hey, this is crypto. It’s all abstracted away.’ So, I think from that perspective, this synergizing of blockchain with the traditional toolset we’ve come to have in our daily lives is a pretty impressive thing to see and has come a long way for sure.

[00:17:05] Elisha Owusu Akyaw: Let’s get into some reactions. What has the reaction been? And I want you to look at this in multiple dimensions. And there’s the reactions from consumers or users of these platforms. But what about, like, in for VeChain, for instance, the developers that are building in the ecosystem enterprises or partners? What has the reaction been generally to this approach of using Web3 technology?

[00:17:32] Jake Campton: When you show people these apps in person, I think we’re still at a stage, especially in the enterprise traditional environment, where most people have not encountered blockchain apps, and they still only know of it maybe through Bitcoin, and they might have heard of Ethereum, but it’s still a very, very abstract. The actual knowledge base in the real world, let’s say, in the background here, but the penetration is tiny. So, when you take an app like this to a business, let’s say who, especially in the Europe area where I am, they’re getting mandated to go towards ESPR. So, things like digital product passports and the circular economy directives, like, basically sustainability, it being embedded at the core of business processes, when you can show an app that can tokenize the reduction of waste and then demonstrate the monetary value and impact of that waste to them, that’s like a really ‘Oh, wow’ kind of moment. Because for them, when it comes to auditing, for example, something really dull like that, it’s very difficult to actually prove you did anything right now. We all understand public blockchain has this ability to trustlessly, kind of, relay data, but a lot of businesses are still catching up, so this is a real eye-opener for them. For example, in their supply chains where VeChain is best known for its work, this is a perfect tool to, kind of, create that transparency in auditability. So, you know, when we work with Boston Consulting Group, and we go to institutions and potential clients and partners with this technology, they’re very interested because it has a lot more benefits than just the app. It’s kind of got this extended route of potential into their business operations, and it, kind of, synergizes a lot of their needs and, and wants and upcoming regulatory demands as well.

It meets a lot of objectives. So, definitely, the perception there has been really good. We’ve, we've been meeting with a lot of potential clients in Europe and got a lot of great feedback so far of how they can visualize it working with their stuff. So, that’s a really cool perspective from that. The devs, I think, yeah, the VeChain community have definitely embraced it. I think initially, there was a bit of like, ‘Oh, this seems a bit out of the blue,’ but actually, now we’ve had a chance to explain the story more of the why is making sense, and everyone’s, kind of, uh, enjoying taking part and being part of this kind of new extension of what we do. Like, the old stuff that VeChain is famous for is still carries on, you know? That’s going on outside of the foundation but still being developed there. So, this is, uh, us building into a new technological need, which is based around sustainability predominantly. And yeah, I think now people are understanding the story and the why and the blue skies picture and where it’s going. And then when you can tell the story of scale a bit more about why this is gonna be so impactful, then people get it. Yeah, I think initially, it was a bit like, ‘Oh, I don’t really get this,’ but thankfully, it’s, everyone’s onboard now, and we’re seeing the numbers of engagement on the platform grow, which is great. What we want to see.

[00:20:23] Elisha Owusu Akyaw: Sounds interesting. Reffo, what has the reaction been on your end from users, other blockchain projects and partners?

[00:20:33] Reffo Tse: That’s a question I’m gonna sweating a little bit because it’s, essentially, it was very controversial initially when we announced about ourselves, about fundraising and just introduced us to the general Web3 world. It’s actually a lot of debates. It’s a lot of challenge for us, a lot of confusion. People are thinking, ‘Oh, are you guys incentivize people to vape more? To smoke more? Are you pay them to smoke?’ So, a lot of that confusion and I guess that’s why we’re here today, right? Yeah. Initially we got a lot of that kind of questions. And even our early community members or our partners don’t know much about our mechanism, which is to help people to quit nicotine. So, I would say, in the early days, there was challenge. But as time goes by, we are introducing more about our mechanism and introducing our device. We brought our device to HTC and also [unintelligible] to show people to show the real smokers, vapers that this is a new device that will help you to lower nicotine and also help you to make some return in a Web3, native way. People are excited. The people that have questioned on Twitter or social media, it’s actually pretty different from people or users that we get in touch with in the real world. So, when they are getting our vapes in hand, they see, ‘Oh, you can monitor, you can counting how many pops you are doing every single day,’ which is a good thing.

And the juice, the whatever the ingredients is actually healthier. It’s actually organic. It’s actually non-artificial ingredients. So, that feedback it’s very authentic. And that’s the feedback or response we get from our users, from our partners, from the ecosystem, other builders out there. And also because this product is a direct-to-customer, direct-to-consumer product. So, a lot of our feedback should just come from users who really are chain-smoker, heavy smokers for a long time. And we’ve met so many people come to us. It doesn’t matter if it’s a consumer or developer because developer or DeFi folks or infra folks or anyone, for us, they are either smoker or non-smoker. It’s pretty simple. And they’re just coming to us saying, ‘Hey, this is genius. Like, I’ve tried so hard to quit smoking. It never works because it is addiction.’ When you are talking about addiction, using some free gift, or just use some slogan, get some, one page or there to do some marketing, that way will not work to help people to quit, to push people, to quit any of the addiction. Financial incentives, it’s actually one of the best way to help people to quit any type of addiction other than just put them in jail.

And we’re not talking about that kind of addiction. We’re talking about this like consuming nicotine addiction. So, it’s a very innovative, very experimental way. We are still facing a lot of challenges, of course, in the space, try to introduce, try to tell people who we are. But I think just based on the short amount of time, based on the past two months, we’ve done a great job telling people really about who we are and what we are trying to do in terms of getting people to do healthier. And that’s one thing I was looking at VeChain’s white paper, and they mentioned a lot about sustainability. And I think it doesn’t matter if it’s for ESG or on a personal level; I think more we care is about how to make our lives, make our social society more sustainable, not because we are using this device. It’s definitely much better than disposable vapes because it causes a lot of pollution. Even the UK government, they ban disposable vapes. There’s a lot of pollution there environmentally, but also to help people to create healthier, change their life habits or behavior. So, I think this is what we have so far, and we’ll see what’s going to happen in the next three to six months.

[00:24:27] Elisha Owusu Akyaw: So, I’m of the opinion, and it may be a controversial opinion, that Web3 platforms or projects that seem to create some controversy at the start are exactly what we need in the Web3 space. Hear me out: I think the entire space exists to disrupt, and I don’t see any other sector where experiments can be made and to the same extent at which they can be done in the Web3 space, maybe AI. But even with that, like it’s very sensitive. So, I don’t know. I think it’s interesting to hear, like, that it was a controversial response, or people saw the project as a controversial one at the start. Did that push you to rethink your decision of building Puffpaw?

[00:25:12] Reffo Tse: I would say never. We never doubt ourselves about doing this because me and my other two co-founders, my other two co-founders, actually they were in the vape industry since they graduated from college. We were in the same college, so I also helped them many, many times even before I got into Web3. So, all of us, we know the problem with that industry. We know what’s the challenge for smokers. So, we know that our direction is the right direction. If any of the other way to quit nicotine, to quit smoking cigarettes, if any of the ways work, why we still have 1.3 billion smokers in this world? There are tons of ways to help people to quit smoking, but none of them works. We know how hard it is, and we are trying to do a new way, a fun way, a Web3 innovative way, using the blockchain technology, to try the new methods, to help people to gradually give up their addiction, to change their daily behavior. So, we know what’s that problem is. And I don’t want to go too deep into the problem. But basically, there are very obvious problems with the vaporizer industry. It’s a huge industry, and the CAGR is like 15%–20% over the past five years. And that’s the trend for the Gen Z, for the young generation. The biggest problem is that there’s no way to quantify. There’s no way to know how much you are vaping, you are smoking on a daily basis. People holding that vape from day to night keep vaping non-stop, playing video games, trading tokens, having fun with friends and a club outside, talking, chit chatting. They just keep puffing. So, at the end of the day, they are taking more nicotine than going with a traditional cigarette.

That’s the worst case, and that’s why we are trying to do a new device. First of all, to quantify, to help people to monitor your smoking activities. Let’s just start from there. We need to help people to understand how much they actually smoke, how much nicotine they are actually taking in. It’s not because people don’t know. People know it’s a bad thing, but people have no idea. Unintentionally, they’re taking in too much nicotine, and vape brands, traditional vape products, they don’t care. They are a consumer brand. They’re a consumer product. As long as they can sell more devices, they can make more profit. They do not care, even though they’re marketing themselves as a better solution than smoking cigarettes. That’s the first problem. The second thing is that it’s a very sensitive, highly regulated industry. There’s no way to do pay promotion online. It’s tobacco product. You’re never going to see any ads of vape or cigarettes on YouTube or any other social media. So, it’s heavily reliant on distributors and smoke shop. They are taking over 80% of the profit from that retail price. That’s why smokers, when they’re walking into the smoke shop, they pay tons of premium to buy that very cheap device. And it’s actually also not healthy, right? So, that’s the problem we are trying to solve here. It’s a very traditional industry still running in a Web1 business. There’s no e-commerce in that industry, and there’s no data. There’s nothing. So, we’re trying to use Web3 way to revolutionize this very old traditional industry. And, of course, there’s going to be a lot of challenges. There’s going to be a lot of noises and controversy. That’s the thing we understand when we start six months ago. So, yeah, no pressure there.

[00:28:29] Elisha Owusu Akyaw: Very thorough explanation of what’s wrong with the nicotine vape industry. Let’s get into sustainability, Jake. It’s one of the biggest headlines in our lifetime. Yet we see very little — I don’t want to use the word response — because we see the response, but the response doesn’t seem to translate into real-world impact. What are the major issues with how people approach sustainability now, and how is their view better now and changing that?

[00:29:00] Jake Campton: Hey, that’s an interesting one. I think it’s also, it doesn’t make for very sexy news when you actually do have positive trends. Like the UK just stopped using coal in its energy mix. That’s an achievement. But of course, that’s not all the news headlines are ever going to be like, ‘Oh, the UK is not using coal anymore in a positive step for sustainability,’ I think, yeah, there are definitely still challenges with it. Well, one big challenge is, obviously, it’s quite a polarizing topic, strangely, because it’s become political in certain parts of the world. And at its core, sustainability isn’t just about planting trees. As Reffo noted, it’s like, it can be health-related, it can be socially related. Social sustainability is a thing like the quality of education in the kind of society around you is an example of that. Anyway, the core challenge, I think, at the moment, certainly in the Western world, is often sustainability comes packaged with this, like, premium brand association. So, you want to do something more sustainable. That’s great. You want to take an Uber, but you choose the green version. Oh, that’s now 3 euros extra. Or you want to pick up a green energy tariff. Oh okay. That’s now 12% more expensive. And essentially, one of the problems for people and, especially in these economic times, is that sustainability has a premium that people aren’t necessarily wanting to pay. I think, in principle, most people would say, ‘Yes, I agree with the notion that having a clean environment is good.’ That seems like a universal truth, but people aren’t willing to necessarily pay for that because, firstly, actually, it’s the enterprise and the business world that creates a lot of this burden. So, why is that now shifted down to the end-user? This is one of the big challenges.

Long story short, I think it boils down to cost efficacy. Most people would be engaged if there was a method through which they could be engaged and benefit, and that’s why we would be better down to market. This is after several years of research done with Boston Consulting Group. We started this back in 2022, you know, launched the white paper 2023, product platform out this year. Essentially, the rationale and the research done was around what users engage with products if they’re rewarded. And at its core, like, we already do that in our day to day lives. We have loyalty scheme shops, and you can think of the better DAOs as a next-gen loyalty scheme of sorts, like, we’re going with this user-centric approach initially, but that’s more to bootstrap and create the kind of data we want before we kind of elevate it more heavily to businesses and go in that direction. So, long answer: They’re waffling around the question, but what are the key challenges with having people engage with sustainability is the cost component. There’s essentially a sustainability tax if you want to engage with any product. And actually that can be flipped if engaging with the product becomes a reward. So, I think that psychological flip between taxation and incentivization, that’s where the real power is in terms of psychological engagement and people’s willingness to engage. Because I think if you offer a product that will reward you for buying the sustainable version, it’s a no-brainer. So, that’s kind of where we’re going with this platform.

[00:31:58] Elisha Owusu Akyaw: And the heart of everything we are talking about are the incentives. So, when we are marketing these products, these projects or ecosystems to consumers, how do we strike a balance between telling people ‘Come for the incentives’ but also explaining to people why the specific things we want to change in the world are equally important? I think the other thing I want you both to also add at the end of the answer to that question is how are we ensuring that these systems are not being gamed? So, I start with Jake.

[00:32:34] Jake Campton: It is a very, very good question. And fortunately, you’re never going to get that universal alignment. There will be people that are in it just for the rewards. But the good thing if there's an incentive-based system is if they’re getting the reward, the rewards, it means they’re doing the desired outcome. So, actually, you still further your objective even for the people who don’t care. But yeah, of course, telling the story is very important. And that’s obviously one of my key jobs. But again, it’s very hard to actually, I guess, ensure people can see everything even, when you post on social media, it’s like it’s a snapshot. So, it’s a really good question, and I’m not sure there is a way to get the universally aligned perspectives among users. You’re going to have people that do it for all different sorts of reasons. Maybe their friend told them, and they just like doing the activity, and that’s it. Or maybe they’re die-hard, like, sustainability person, and they found it and like, ‘Oh my God, this is a holy grail.’ Or maybe it is just people that don’t really care. But like you say, they’re all still furthering the goals of the platform by engaging with it. So, it’s still a bit weird in that way, and obviously, the more engaged someone becomes, the more emotionally attached they become, then the more likely they are to actually dive in and investigate and become a repeat user. And, of course, that’s the goal ultimately: driving user growth, driving engagement and usage, ultimately, to validate the product’s efficacy over time and kind of create that data.

[00:33:55] Elisha Owusu Akyaw: Great. Reffo?

[00:33:56] Reffo Tse: I think that depends on who our target customers are. So, for us, it’s really smokers, or it’s, like, non-smokers can help their friends or family or anyone else to quit nicotine. So, we don’t want to make it sound like, ‘Oh, we are high-tech. We are facing young generation. We are facing folks who smoke happily.’ They are not interested in technology; they are interested in how to better use the product and, meanwhile, can, can get a little bit healthier on a daily basis. We don’t try to say, ‘Oh, come to buy us, come to use our product because we are this and that and much more innovative than other products.’ We are telling them that this is a new lifestyle with us, with Puffpaw, it’s a healthier, it’s more sustainable lifestyle. And you can also have fun with other folks, with other consumers, or just with your friends because we even built a social layer into our product because people can help each other, people can share the story with each other and to motivate, to encourage each other to choose a better lifestyle. So, for our vaporizer, there’s an NFC chip for each of the vape. And if you are meeting another guy on the stage just randomly in the club or anywhere holding the same vape, you use the vape to tap the other vape.

Both of you guys will add friends, and it will earn additional of our incentive as a reward to make that social engagement. So, it’s like a social incentive. So, we try to stay in the cool lifestyle. That’s just because our users, they probably don’t care about much of the technology. They care more about if they can really enjoy this product. So, we know that at the back end, we try to do a lot to help them to form a better lifestyle, but we never tell them, ‘Hey, you must do this. You must do that because we have this high-tech innovation.’ That’s not our narrative or the way that we tell our stories. So, if you go to our website or our Twitter account, you’re going to find it’s a really degen, it’s really cool, it’s really consumer-friendly, consumer-driven. We try to make it really fun for everybody. That’s the only way you can help people to get better. I don’t think to force anyone to quit smoking is working. Like I mentioned before, it’s the way that you have to be their companion. You have to make it fun. You have to help them to make more friends, to make them feel more valuable in this community, that they will be staying here longer and to keep using our product.

And also, they probably don’t even know, or if they really care about the financial incentive, they will know that we actually have a cap for each day. For example, you cannot puff over 150 puffs per each day, and if you are a average smoker, you probably puff over 1,000 puffs with other vapes. So, we are not telling them, ‘Hey, you cannot do this. You cannot puff more.’ We tell them, ‘Hey, if you puff more, there will be no more rewards.’ So, it’s a very gentle, very mild way to help them to better control themselves. I think that’s more important than just putting the incentive out there or just telling them, ‘Hey, you cannot.’ That’s part of our lifestyle story. The second part of the question: how we protect users from simple tech or from any other farming activities? So, there are two parts. The first part is the hardware. I already introduced that. We have the encrypted chip for each of the vape and Pod. It comes with a unique identification number, unique ID for each of the component. So, our mobile app will identify each of the component to verify that’s our device. So, we know who are using our device and how they are using that device because we monitor every single time when they are puffing.

The second part is with the mechanism. First of all, like I said, we are limiting the puff amount. Every single person can only puff 150, and we are requiring them to pair that vape with their mobile app at all times, unless they are charging it for 15 minutes every single day. So, if you are really a farmer, you probably want to buy multiple vapes. You want to buy multiple phones, like StepN, a lot of farmers there and just carry all of that phone and vapes and just move here and there, keep popping infinitely. So, first of all, there is a cap — 150 limit — even for the non-negative. There is only 150 available puffs. Second thing, if you are carrying that vape, and you are not moving, or your phone is not moving, or if there are two vapes that stays together all the time, that’s not human being. That’s not human behavior. That’s abnormal. Like, we’re going to investigate why and how. You cannot give us your shipping address. We know who you are. We have to ship the device to you. So, if you are ordered 10 vapes and doing the same shipping address, that’s obviously cheating the game, unless you’re telling me, ‘Oh, I'm buying nine vapes for my friends. For the other friends.’

Then get your friends on the platform. That’s how we use Web3 [unintelligible] to onboard more of the real smokers on the platform. And the third thing is that it’s lowered their consumption or their initial input into this device, but it’s not that strong incentive to get non-smokers to buy the device, to start smoking, to start vaping. It’s just the financial incentive. The calculation doesn’t work in that way. So, what we tell the smokers is that ‘Yes, you will lower your cost’ because to buy nicotine product cost so much money on a monthly basis. And with our product you don’t need to pay that much. You are also getting a return, get a financial incentive. So, you are actually saving money and getting healthier with our product. So, in that way, if you are just a farmer, that doesn’t make sense for you to get into the game because, to be honest, it’s not that much financial incentive for you to pick up a smoking behavior, like become a smoker, and also buy a product that you don’t really use in a normal way. A lot of investment upfront. So, that’s the thing, both from the mechanism side and from the hardware side, we’re trying to protect, to make sure that we only carry real smokers on the platform.

[00:40:03] Elisha Owusu Akyaw: Awesome. We are going to wrap up in just a bit. But before we end this podcast, just a quick question. I know this may be a very big question in the sense that the possibilities are endless. But Jake and Reffo, what does the future hold for the use of Web3 technology to incentivize people to live a better life? I’ll start with Jake. You can talk about this from a general industry perspective but also zoom in and also talk about it from a VeChain perspective.

[00:40:35] Jake Campton: It’s a good question. I think we will inevitably be seeing more and more of it. It’s clear the trend from institutional and business level is moving into the space, and as the tech becomes more usable, I think its integration is going to be inevitable. We touched on next-gen loyalty schemes. I think this is how this can come into society in a big way. From the corporate level, like, they’re very much interested in better community engagement. How can I build stronger communities? How can I see what my communities do more, like, how can I create more granularity? Like, even down to maybe some things people might not like, but I guess bespoke marketing, that kind of nuanced level of engagement. Obviously, the benefit in the Web3 world is that you have that data sovereignty component. So, if you don’t want to sell that data to them, they almost have to beg you for your user data in that sense. So, it changes the power balance, putting the power in the hand of the user, but also is a big win for companies who embrace the tech for creating communities and engagement and aftermarket kind of operations, all that stuff. So, it’s a mutual wins, I think, and I do see it as inevitable. I could be blindly biased here working in Web3, but I just think seeing the tech become so seamless now, especially with fee abstraction and social logins, they can perform just like apps.

And I think that’s the key tipping point. Or, you know, you have a hardware device that just, Puffpaw, that just makes sense. It’s a vape, but it has this gamification component. You’re not dealing with this heavy overhead of a new technology, a new thing, and I need to get used to and get my head around. So, I think having the technical hurdles be overcome, I see it as an inevitable upgrade to the day-to-day life. So, I definitely think five years, like 10 years, is going to be absolutely everywhere. That’s my personal opinion. And from a VeChain perspective, of course, we’ve really gone in on this approach. So, like I said, we’re still doing other operational stuff like they were kind of known for, but now the foundation’s focus is this, and that’s based on years of research and working with BCG to go to market, to speak to clients. What are your needs? Where are your targets? What are your goals? Consumer engagement, sustainability, tokenization, all this stuff, this direction is based on market research and what they want to see. So, again, I don’t think it’s a shoot-and-hope-it-sticks kind of approach. This is definitely a trend, and I see it ending with much broader scope of adoption.

[00:43:00] Elisha Owusu Akyaw: Sounds great. Reffo. Same question. What does the future hold?

[00:43:05] Reffo Tse: Jake just mentioned gamification. That’s one of the very cool word I carry. So, I think one of the very positive side of I’m confident with about Web3 is about gamification. You can literally use the financial incentive using the financial way, DeFi way, to gamify everything. You can gamify a business, you can gamify your behavior. You can gamify a brand. That’s the very cool way. We’re going to see more and more and more of the Web2, Web1 traditional business owner, traditional business enterprise, getting into the Web3 world and try to run that game with their traditional business, which has the real business model, business value and the revenue, the cash flow, everything in the real business world sense. I think that’s very attractive, and that’s very intriguing that we can explore more of the gamification, gamified the mechanism, try to reshape a lot of the traditional business model. And I’m not just talking about hardware, even though we’re building hardware, I’m talking about the brands. Like, everything, the IP, the brand, everything — it’s more about how can you build a brand, a name and IP around everything about a project, about a product, about your name, your personal brand, about your community. That’s pretty important.

And I think as we are facing a lot of politically and economically challenge with the whole world right now, people are looking for the new way to entertain themselves. People are looking for new attention. What’s the most attractive thing on a daily basis? How can we catch their eyes? I think gamification using the financial incentive is a very strong method to achieve that. So, that’s the thing I’m really excited about Web3 part. I’m looking at DeFi as a infra. I’m looking at a blockchain or DeFi, even RWA as an infra. For the Web2 real business, everything is infra in their perspective. So, as soon as we have that built out, the next phase is that, how are we getting ready to gamify everything in a more fun way? Even for the very traditional business, there is a chance that we can help them to gamify everything and to get more of the real, you know, the young generation of the new users, the future. They are the future. So, yeah, I think that’s what we are looking for. We can build together in the next three to five years, and I’m so glad that this industry has finally get into that phase.

[00:45:41] Elisha Owusu Akyaw: Sounds really great. I’m equally happy to see the industry get into that phase. Thank you very much, Jake and Reffo. This has been one of my favorite podcasts all year. Thank you very much for joining me.

[00:45:53] Reffo Tse: Thank you, Elisha. Thank you for having me.

[00:45:55] Jake Campton: Thank you. Yeah, great to be here. Thanks, Elisha, and great to meet you, Reffo.

[00:45:59] Reffo Tse: Likewise. Nice to meet you, Jake.

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