00:00Quade Walker joins us right now, the CEO and co-founder over at Bezzel. All right, Quade, explain to me
00:04how this works, right?
00:05Because, I mean, if I go on your site right now, I'm actually on there right now. There's a nice
00:08little Patek Philippe here, the actual calendar edition.
00:12$23,000, $24,000, $19.96. Looks like it's in good condition. That's from your website. What is Kalshi bringing
00:19to the table here?
00:21Yeah, so internally, we recently built a price engine. So like the prices that you were just mentioning, our job
00:28is to build a tool for a lot of the markets to leverage to understand what a market price is
00:33for, say, the Patek that you were referencing.
00:36We built a mathematical consensus, so basically a machine learning model to analyze all of our data, all of our
00:41sales, all of our transactional moments, and then market data to put together what we think is the most thoughtful
00:46understanding of a market price.
00:47And now we're partnering with Kalshi to build markets around that data to make it accessible for folks that maybe
00:53don't want to buy, you know, a $23,000 watch to participate in the market.
00:56They can now participate on the prediction market side that way.
00:59Well, that's what I'm talking about. And I really called out that watch because I was hoping my wife is
01:03listening. You know, Father's Day is coming up.
01:04But in all seriousness, I mean, like, who is using this? So is the idea that are these going to
01:09be sort of watch aficionados who just want to sort of partake in, you know, sort of playing what the
01:16prices are without actually having to commit to buy anything?
01:18Or are these going to be people who aren't necessarily even in that watch community?
01:23Well, we hope it's a mix, right? So I think watch folks tend to be obsessed.
01:27And so this is another avenue for folks to participate in the watches or engage with the watches they love.
01:31We hope they're excited to do so. There's already a remill that spins in the watch world.
01:37And you see folks that are speaking on forums or amongst groups of collectors about what they think is going
01:41to happen in the watch world.
01:43So we're hoping this is another avenue for them to engage that way.
01:45And then we also hope it grows the hobby, right? If you have folks that are trading on Kalshi that
01:50are interested in financial markets,
01:53we hope this brings them to the watch world and brings more liquidity in the space and ultimately just makes
01:58the watch world more vibrant and more interesting.
02:00Quaid, how robust is this market or how robust do you expect it to be just thinking about people who
02:05are willing to wager on the prices of watches and how liquid it is?
02:10It's still early days, right? And so we've seen a lot of interesting activity in the first couple of days.
02:15And so we're monitoring it very closely. I think our job as a business is to provide the data to
02:21Kalshi here.
02:22Our hope is to learn from the watch community and just evolve the partnership based on the response that we
02:28get from them.
02:28And so early signal shows that there's a lot of interest there.
02:31We've obviously intentionally picked a few markets that we thought were representative of models that trade more frequently on our
02:38platform.
02:39And so the one-to-one overlap of interest was ideally optimized there.
02:43And so we're monitoring really quickly. So far, it's a lot of really positive signals.
02:47We'll kind of see how it continues to evolve.
02:48Well, I just remember there was a platform, I think, rally.
02:51There may still be some around that.
02:52The whole point was you're buying shares of an underlying asset.
02:55So at least you can tell your friends, hey, I actually own part of a Daytona.
02:59In this circumstance, though, you're just strictly betting on up or down.
03:03So I'm just thinking through the incentives other than maybe if you're a watch aficionado who believes they have better
03:08insight and can capitalize on that.
03:11Yeah. So I think as far as ownership goes, our interest is, you know, buy a watch on bezel.
03:17We want to make sure that it's authentic. We want to make sure the ownership.
03:20There's no notion of, like, fractional ownership or anything about the partnership.
03:24Our hope with Kelsey is just if I'm sitting here and I'm speculating on directions of the watch going to
03:29move, can I participate in a way without requiring, you know, needing to purchase an entire watch to play in
03:35that market?
03:36Our hope is this is a fun secondary activity allotted for, you know, collectors that are already obsessed with the
03:41category.
03:42But I think as we expand from there, the price engine that we've built is extensible to do a number
03:47of things.
03:48And so this is our first step into the space. We're waiting to see kind of how the watch market
03:52responds to it.
03:53And then our goal is to evolve the usages of it as we scale.
03:57Hey, Quint, I do want to ask you just in general about just kind of the health of the watch
04:01market, pretty much the resale market, if you will.
04:04Have you seen any sort of changes given some of the issues with the economy and geopolitics or is there
04:10not a direct correlation?
04:12Obviously, I mean, the most recent change has been the tariff environment.
04:15So we're a U.S.-only business and we operate, obviously, in the secondary market.
04:20And so the tariff environment affected all goods that were moving to the U.S.
04:25Especially Swiss goods were hit quite hard.
04:27So prices were synthetically moved up for the first time in a long time.
04:31So that was kind of the first order effect.
04:32And then secondary, as the primary brands start baking in the tariffs and the pricing, we saw a lot of
04:38movement happening there.
04:40But that was kind of the last big mover.
04:43We haven't seen any changes in purchasing or anything happening quite yet given, like, the current economic situation.
04:49But obviously, it's ever-evolving.
04:51And the fun part about this price engine is it will give us, you know, a very close look on
04:56things changing as they change in real time.
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