Cryptokitties meets virtual gifts. That could be the faster than elevator pitch for one of the hottest ICO which raised $30 million in seconds.
Backed by some respected VCs, it is headed by Andy Tian, a former General Manager of Zynga China and an early member of Google China.
The project already has a seemingly successful centralized live-streaming platform serving 20 million users that generated $100 million in revenue this year from virtual gifts.
But now, its parent company Asia Innovations Group (AIG) wants to decentralize it all by using ethereum’s blockchain tech and smart contracts.
Every virtual gift will be a digital asset, they say in their prospectus whitepaper. But does anyone really pay for these intangible things? Apparently they do, and some are willing to pay quite a lot:
“Our sales statistics have demonstrated that users are willing to pay as much as USD $1,471.00 for an “Around the World” gift, one of our most expensive and elaborate gifts.
Because these gifts have real meaning within our Uplive platform, users begin to attach real value to them, and therefore are willing to pay for them.
This concept has been proven true time and time again in online games, and we have simply adopted this concept to our content platform,” the project says.
Uplive is a streaming platform, like Twitch or Youtube, with millions of users generating millions in revenue through a gifting economy.
The gifts are animated, so once they are sent, there is action on the screen, giving it a sort of touching feel and increasing connection between artist and viewer.
This creates more revenue than reliance on advertising, AIG says, and allows artists to self sustain themselves, with the project stating:
“We have observed that an over-reliance on advertising revenue across many major centralised content platforms has led to the creation of autocratic incentive systems which disproportionately favour mass-market content and “top-tier” producers.
This model has created an epidemic of systematic revenue deprivation, orphaning the vast majority of budding online content creators, and stifling the diversity and quality of content being produced.”
If you ever wondered why you keep seeing the same movie storyline or keep hearing the same music beat, it is probably because of a fundamental problem with capitalism, economies of scale.
A problem identified since ancient times with one of the oldest book of humankind stating thus:
“Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them.”
These economies of scale create monopolies, concentrating resources, power and attention on very few, but human creativity and ingenuity is a very underappreciated wonder.
Surprisingly, Google recently revealed that they still see around 20% of completely unique searches. That long tail, identified more than a decade ago, can not be supported by advertising, but perhaps digital gift assets might be an answer.
The project’s whitepaper doesn’t really go much into technical detail, but we are told the Gifting Protocol is based on ethereum’s blockchain, utilizing smart contracts to allow artists the opportunity to create unique editions of virtual gifts with its own price and value.
Making it tokenized gift assets, which presumably can then be transferred, sold and bought, as one pleases, detaching them from one platform and making them universal, so potentially giving rise to a new dawn of a digital assets economy where rare art is in a way upgraded to rare digital assets.
But can ethereum handle this? That’s a question we might hear more and more as we go into 2018, with that big scalability problem potentially conceptually solved but still remaining practically very much in development.
And while we don’t have many criticisms for this project, we do have a very important one. Revenue numbers say little without profit numbers, which the project doesn’t publicly reveal as far as we can see. It should, in our view, if it does have the best in mind for this space.
But minus that point, it is quite interesting how this space has now expanded from promising to disrupt almost all industries to creating something quite new, digital assets, that like eth itself, are rare and unique.