p1GIFTOThe Universal Gifting Protocol for Global Content Creators “GIFTO Protocol” November2017Version2.0AuthorsGIFTOteamReviewersLoiLu,CEOandCo-founder,KyberNetwork,SmartpolChrisMies,erCFOTenX,FounderICONICCapitalDannyYang,CEOandfounder,Blockser2Thispaperisnotanoferofsecurities.Pleasereadthisdocumentinfulandperduediligence,inparticularthesectionentitled“RISKSANDDISCLAIMERS”.Nothinginthisdocumentshallbeconstruedasadviceorsolicitationtomakeanypurchaseandifyouareinanydoubt,pleaseconsultyourlegal,financial,taxand/orotherprofesionaladvisors.3TableofContents1.Abstract..............................................................................................................................42.cutiveSummary............................................................................................................53.MotivationAFirst-HandExperience.................................................................................113.1WhyCurrentContentMonetizationModelIsBroken...............................................................113.2ABeterMonetizationModelVirtualGifting...........................................................................143.3WhyDoVirtualGiftsGenerateHighRevenue.........................................................................153.4BlockchainDecentralizedVirtualGifts.....................................................................................194.GIFTOProtocol-TheUniversalGiftingProtocol.................................................................204.1EnableVirtualGiftingOnAnyContentPlat.......................................................................224.2TheEcosystemOfVirtualGifting..............................................................................................234.3CommunityParticipationIncentives........................................................................................264.4TheGiftPortal..........................................................................................................................284.5SmartVirtualGifts....................................................................................................................314.6GIFTOToken.............................................................................................................................324.7GIFTOWallet............................................................................................................................324.8HybridOf-Chain/On-ChainArchitecture..................................................................................334.9TokenEconomy........................................................................................................................345.RoadmapandAdoption.....................................................................................................385.1UpliveBrings70MilionGlobalUserReachToGIFTO................................................................385.2MigratingUpliveFromDiamondsToGIFTOs.............................................................................405.3PhasedAdoption......................................................................................................................416.GIFTOLimited....................................................................................................................427.Team.................................................................................................................................438.Advisors............................................................................................................................489.AsiaInovationsGroup’sInvestors....................................................................................5210.Risksamp;Disclaimers..........................................................................................................5341.AbstractThispaperoutlinesthecasefortheimplementationofadecentralizedvirtualgiftingprotocoltoincentivizeandmonetizecontentgenerationbyindividualcontentcreatorsworldwide.Theprotocolmaybedeployedonvariousexistingcontentpublishingplatsontheinternet,suchasYouTube,Instagram,andFacebok,amongothers,andcanbeusedtocomplementconventionalrevenuestreamswhichareprimarilyderivedfromadvertising.AsiaInnovationsGroup“AIG”isaleadingmobileentertainmentcompanyinAsia.Ithasdemonstratedthatvirtualgiftingsystemisahighlyefectivemonetizationforcontentcreatorsonitsflagshiplivevideoplat,Uplive.VirtualgiftsonUplivenotonlydrivesignificantrevenueforglobalcontentcreators,butalsoenhanceinteractionsandrelationshipsbetwencreatorsandtheirfans.SinceitslaunchinJune2016,theUplivecomunityhasrapidlyexpandedto20milionglobalusers,andtheplatwilgeneratemorethanUSD10milioninrevenuefor2017.InSeptemberalone,over25milionvirtualgiftswerepurchasedandsentonUplive.TheUniversalGiftingProtocoldrawsfromthepositiveUpliveexperience,andsekstoenablecontentproducersacrosanycontentplattoreceivegiftsfromtheirfans.Thesevirtualgiftswilexistindependentlyfromanyplatandretaintheirpropertieswithoutanycentralizedcontrolingmechanism.EachvirtualgiftwilbeimplementedasasmartcontractonEthereumblockchain,enablingthevirtualgiftstoexist,beowned,andbetransactedindependentlyfromanyparticularcontentplatorsystem.Thiswilservetoreducethedependencyofcontentproducersontheirpublishingplatstosecurerevenuefortheirwork,and,byextension,relianceonadvertisers.TheproposedcurencyfortransactinginthevirtualgiftsisGIFTOTokens,whichwilbedeployedasanERC20-standardtokenontheEthereumblockchain.GIFTOTokenswillalsobeusedtoincentivizeandmotivateanecosystemofparticipantstohelpcreate,curate,andredemvirtualgifts.TheAlphaversionofGIFTOProtocolwilbetestedbyendof2017,andtheBetaversionistargetedfortestinginQ12018,withfulcomerciallaunchinQ22018.GIFTOProtocolwilleverageonUplive’sexisting20mlnuserbaseand60,00contentcreatorstotest,iterate,andjump-startmassadoption,towardsthevisionofempoweringmilionsofcontentcreatorsworldwide.52.cutiveSummaryThePainPointforContentCreatorsGlobalsocialmediaandbroadcastingplatssuchasYouTube,Instagram,Facebokhaveallowedanyonetoeasilycreatecontentandbuildafanbaseoffolowersandconsumers.However,thebulkofrevenuegenerationonsuchplatsremainsheavilydependentonadvertisingrevenue.Asaresult,theincentivemodelwhichdrivestheecosystemislargelycentralizedanddominatedbyeithertheplatorthepayingadvertisers1,oftenattheexpenseofcontentproducersandconsumers.Sinceadvertisersandmarketerstypicallyplacegreatervalueonreachingasbroadanaudienceasposible,thepresentincentivesystemendsupdisproportionatelyfavouringthemostpopular1ofproducerswiththelargestviewerbase,subscribers,or“hits”.Solongaslespopularcontentproducerscontinuetobedeprivedofrepresentationandoportunitiesatthesustainableendoftherevenue-splittable,themonetaryincentivesgeneratedpurelybyadvertisingrevenuewilcontinuetobeswallowedbythetopfewpercentageofcontentcreatorswiththemosttraffic.Theoverallqualityanddiversityofcontentontheplatmaysuferbecausethevastmajorityofcontentcreatorsaresimplynotabletocomandareliableincomestreamunderthepresentincentivescheme,regardlesoftheirvaluetotheusers.Theconsequenceisthatduetothemassiveinfluenceofadvertisersonthetypeofcontentthatendsupbeingrewarded,alargecatalogueofhighqualitycontentmayendupneverbeingproducedsimplybecauseitwouldbeunsustainablepurelybyadvertisingrevenue.Thisrepresentsacriticalproblemforboththeplatandaudience.TheSolutionUpliveTheideaofgeneratingrevenuethroughvirtualgiftsorassetshasbenusedextensivelyinthedigitalgamingindustry.However,AIG’sflagshipproduct,Uplive,hasdemonstratedthatasophisticatedvirtualgiftingmodelcanalsoworktocreateasustainableecosystemainstreamcontentcreators.Asanattestationtothispoint,theUpliveplathasalreadybengeneratingmilionsofdolarsofincomeforover60,00contentcreatorseverymonth.Thisconstantincomestreamisgenerateddirectlyfromtheever-increasingdedicatedviewerbase.AIGhasenabledthe“gigeconomy”astermedbytheSouthChinaMorningPost,wherea1http/ Thereisnouniversallyimutableandtrustedledgerrecordingvalues,transactionsandcharacteristicsofvirtualgifts,whichareassetswithsignificanteconomicvalue;● Virtualgiftsaresusceptibletosabotage,suchasduplicationofalimitededitiongift,falsifyingtransactions,unauthorizedchangingvaluesoftheirproperties,amongothervulnerabilities;● Thereisnoorganisedframeworktomanagethehighnumberofparticipantsrequiredtocreate,categorise,controlandrunasophisticatedvirtualgiftingsystem;● Withoutsuchacohesiveframework,itisdificulttoattractandretainthenumberofparticipantsrequiredtoservicecontentcreatorsandtheirfansonaglobalscale;8Creatinghighqualityandlargevarietyofcreativevirtualgiftsinvolvesacombinedandsizeableteamefortinvolvingmanyparticipantsfolowingapre-setworkflowwhichhasbenimplementedinternallyatUplive,asilustratedbytheprocessbelowThisprocesworkswelforUplive,however,itreliesonafewkeycentralizedfunctionsandoftenresultsinbottleneckofthespedandqualityoftheendproducts.Forexample,ourcuratorshavetomanuallytestandtrialeachvirtualgiftforeachcontentcreator,andfromanideatoahighmonetizationandpopulargift,itoftentakeswekstocreate.Thereisalsolackofdirectincentivesforparticipantstoapplytheircreativitytothegiftsasitisdificulttotrackhowmuchoftheirownefortcontributestotheendresultofthegiftcreated.Finally,combinationofvirtualgiftsandcontentcreatorscanhavediferentrevenueshares,i.e.,agiftwithanIP,suchasMercedesvirtualcar,wilhaverevenuesharewiththebrand.Andmoreexperiencedcreatorscancomandhigherrevenueshare.ThiscomplexmatrixofrevenueshareiscalculatedbyUplive’sinternalmanagementsystemandverifiedbyateamofanalysts,andtheefortincreasesasUplive’sscaleexpands.Therefore,wehaveidentifiedthenedtobuildamoredecentralizedecosystem,thatinvolvestheonlinecomunityinallaspectsofcreatingandmaintainingthesystem.Wenedtoimplementclearrulesandanincentivesystemthatresultsself-governance,withminimalcentralizedmanagement.Ourmodelmustalsomotivateitsparticipantstocreatehigh-valuevirtualgiftsforcontentcreatorsinsuficientquantitytomettheexistingdemand.Giftcreators,ascrucialcomponentsoftheecosystem,wileventuallyproduceawholynewcontentinteractionexperienceforcontentproducersandaudiencesalike.Asilustratedintheabovediagram,eachpartyinthe9ecosystemwilbeincentivizedtoparticipateandcontributeintheworkflow.Forexample,theGiftCreator,Reviewer,andContentCreatorwileachreceiveashareofthueofthevirtualgiftsthathavebenpurchasedbytheFan.Thisway,thisecosystemisabletoscalemoreorganically,withoutbeingsubjecttothemonopolizationordictationofrevenueflowbyanycentralizedentity.TheSolutionGIFTOProtocol-TheUniversalGiftingProtocolpoweredbyblockchainBlockchaintechnologyoferstwocapabilitiesthatarecriticalforourneds● Blockchainenablescreationofavirtualassetthatholdsvalueacrosanyplatandisimutable.● Blockchainenablesrulestobebuiltintoadecentralizedsystemwithdefinedrolesthatcanbeutilizedbycomunityparticipantstodriveaworkflow.Theiractionscanbeincentivizedandenforcedbytheblockchain,creatingaselfgoverningecosystem.Inparticular,revenueshareofthevirtualgift’svaluetodiferentparticipantscanbewrittendirectlyintothegift.GIFTOProtocol-TheUniversalGiftingProtocolaimstoutilizetheabovetwocapabilitiesofblockchaintechnologytocreateadecentralizedecosystemwhereacomunityofparticipantscancometogethertocreate,curate,andcustomizearichvarietyofhigh-qualityvirtualgiftsforglobalcontentcreators.Insekingtomakeavirtualgiftimutableandindependento/p