is wrapping up its ICO, we thought we would get its founder Ameen
to highlight some of the interesting things they have done in the process.
As way of background, SpankChain is re-architecting the technical and economic infrastructure behind the adult industry, a $100 billion global market where intermediaries still get away with extracting preposterous value, censorship and discrimination. The industry feels ripe for decentralization via blockchain-based applications and, as pointed out
by Kyle, SpankChain could onboard millions of new users to crypto.
So let's get on to it.TE: How did you and your team end up working in the adult industry?
AS: So after leaving my year-long job as the ConsenSys expert on payment channels, I started out looking for the best payment channels use-case, which turned out to be live cams and payments for the adult industry. As we did more more research on the industry, we started to learn about the scale of the discrimination against the adult industry embedded in our existing financial infrastructure, and then we become even more committed to helping adult industry performers and businesses migrate their funds to Ethereum.
TE: You’ve run your ICO with a rather innovative way price discovery mechanism. Can you explain briefly how the token sale has been structured and what you’ve optimized for? How will you ensure transparency in the strike price reveal phase? Anything you’d do differently now that it’s done?
AS: So the token issuance was structured as a custom, blind, same-price, state channels auction. With our design we were optimizing for the flexibility to select the quantity of tokens issued and the token price after receiving all the bids, instead of before. We still operated within pre-determined constraints, because we committed to selling between 30-60% of our tokens and raising between $5M-$69M, but we were able to respond to the market within those constraints.
As for ensuring transparency, the final strike price will be public and the set of signed bids that we ultimately select will be sent to the smart contract to be verified and will be public, so our community will know exactly which bids were accepted and the price offered in each.
Now that it's done, I don't think I would do anything differently, except maybe ask BCH and BTC to wait until our ICO was over before having their civil war.
TE: You have architected a multi-token economic model a la Gnosis: a utility token plus a usage token. Can you elaborate on the need for two tokens for your economy to function? Where does that leave you from a regulatory perspective? At the risk of over generalizing, which types of network should consider a dual token structure?
AS: The "two-token" system we used is helpful because it allows us to decouple platform usage rights from the price fluctuations of our utility token. Holding 1% of SPANK allows a performer or platform business to use 1% of SpankChain infrastructure fees, regardless of the price of SPANK. With the proof-of-spank verification game, we're pretty confident that we fall firmly in the "utility token" regulatory framing. Generally speaking, application networks with shared, public infrastructure could use our token model to help subsidize usage by early adopters and to act as a dynamic license to use the platform.
TE: How will you attract performers away from existing highly trafficked sites where presumably the overall economics are superior, despite paying higher fees? More generally, what’s the biggest risk factor in the success of this project?
AS: We'll attract performers by offering them better rates, access to our valuable clientele of the newly crypto rich, and shared ownership in the network. Over time, we think the best ones will help attract their existing users as well. The biggest risk factor to this project is probably us spending ourselves to death marketing before the consumer market is ready to adopt crypto in earnest. It's really important for us to get the timing right.
TE: From a tech perspective, you have implemented payment channels. Can you briefly talk about what payment channels allow you to do?
AS: Our payment channels allow us to have scalable transactions with no gas costs with all the security benefits of the blockchain, without having to wait for sharding or plasma. Through our in-browser payment channel wallet, Vynos, they allow our users to pay in tips to our performers and to watch pay-per-second private shows. TE: Tell us a little about vynos.tech. What is is and what’s the plan for it?
AS: Vynos is our in-browser payment channel wallet and allows our users make micropayments for both live and static content. It will integrate with our camsite, clipsite, and third-party applications across the SpankChain ecosystem to allow users to seamlessly move between all our apps. In time it will be expanded to include token transfers and hashlocked atomic transactions, which will allow SpankChain to make instant payouts to performers and businesses.
TE: Tell us a bit more about the SpankFund, what’s the plan for it and who should reach out to you about it?
AS: The SpankFund is a way for us to subsidize usage for early adopter performers and platform businesses and help accelerate the development of core services and applications on our platform. If you are interested in building at the intersection of p0rn and blockchain get in touch!
Disclaimer: one of us personally participated in the ICO.