Blockchain technology has been developed so far, and there has been such a discourse as
“Blockchain+” and “+blockchain”.
The “blockchain+” represents the decentralized products that are born on the chains of major public chains. Such as DeFi, GameFi, NFT, etc.
The “+blockchain” is often based on the blockchain empowerment of traditional projects. Such as logistics blockchain, on-chain deposition, IoT blockchain, etc.
There are often great barriers between blockchain products in these two different fields, and the reasons for such barriers are not only related to technology, but also to business models and the so-called “culture”. Native blockchain applications often face great scalability problems, for example, DeFi products are difficult to access users’ personal data because of the decentralization requirement, so they cannot be compared with Internet financial products in terms of credit value utilization. This results in DeFi products often being less capital efficient, a situation that is particularly evident in the lending scenario. The lack of various supporting products and data makes DeFi products more demanding in terms of risk control, so a slightly clumsy model like “overcollateralization” is widely adopted.
The founding father of Ether, V God, tweeted some time ago: “Ether should not be only DeFi”.
This further proves that if “blockchain+” wants to further expand its territory, then new application scenarios must be very important, otherwise, it is easy to enter the strange circle of “self-enrichment”. Unless aggressive strategies like “liquidity mining”, which overdraw future profits, keep emerging, it will be difficult to maintain higher valuation expectations.
Therefore, we will focus on new projects that are not fully understood by the current blockchain world users in our research process. We aim to bring more undervalued projects to our team and to the users who read the research report.
02 Project Analysis
I. The track they are in
Narrowly speaking, Verasity, like BAT, should belong to the attention token. The track is the attention token. Through decentralized identity authentication and economic incentive model to reduce the fraud problem of digital advertising, and enhance the engagement of advertisers and advertising revenue of channels. This track used to attract a lot of attention in the market during the period from the end of FY17 to mid FY18. Among them, projects such as BAT, Verasity, Prop, Flixxo, etc. had more attention in that time period.
Eventually, Verasity raised nearly $20 million at $0.0078, fueled by the I.CO boom. Using the I.CO price as a baseline, Verasity is currently returning over 500%. While Prop and Flixxo are not far behind in terms of fundraising size and market fervor, their project returns are currently below the industry average.
This may be due to a number of reasons.
- Attention tokens. Attention tokens are essentially traditional internet platform products + blockchain economic model and governance model. So these products often need to compete directly with traditional internet products. The problem they need to solve is not just more marketing, but even the mission to reshape the already more mature industry. This kind of track is often very appealing when it comes to selling the “vision”, but in the actual operation process requires more effort than DeFi, GameFi and other native products on the chain.
- Both BAT and Verasity hope to improve the conversion of display ads through the unique economic system of blockchain. However, the “incentive volume” itself has the characteristics that although the volume starts quickly and the fraud is low, the conversion is very poor. Most advertisers are not interested in the number of exposures and dwell time, but in the conversion ability after placement. Therefore, the effect brought by pure economic incentives is often not as satisfactory as it should be, and the dominant ones in the whole industry are those with traffic and quality channels that can achieve accurate placement and improve conversion through big data.
- In the past two years, the blockchain industry has not provided enough internal circulation environment for the products of this track. Unable to generate enough source power for the products of this track within the blockchain industry. This resulted in these products having to go for bayonets with traditional vendors, naturally facing great competitive pressure, and it was difficult to generate actual profits after the ICO, and the high expenses eventually made them unsustainable.
Faced with these problems, there are still products such as Verasity, BAT, and Theta that have survived and have achieved most of the original roadmap. All of their releases have seen steady growth in numbers.
This is also largely due to.
The potential of the track itself is huge, and it is one of the largest and most imaginative tracks to land besides DeFi and GameFi. According to Verasity’s research, the online advertising market is nearly $400 billion and 40% is completely wasted by bots, and advertisers are often willing to spend 5 to 10 times as much if they can eliminate fraud.
Prophet Research Report｜Verasity: Watch to Earn Feasibility Analysis
II. Product Ecology.
Currently, Verasity has a rich product ecology, which includes.
This is an eSports game store where sponsors can initiate private tournaments, public tournaments or third-party tournaments.
Similar to the popular Hao Fang matchmaking platform in China earlier, but Esportfightclub.com does not solve the problem of game connection, but only provides a general competition holding platform for the market, which realizes the one-stop service of tournament holding, tournament dissemination and guided viewing through VRA and EFC points. The product inherits the player, POV proof protocol and other products within the Verasity ecology, providing a good application layer product for the Verasity ecology.
We experienced the platform, which is still in its early days, but the significance of this product is that Verasity is starting to realize that if it wants to really stand out, relying on the economic system and POV proof protocols to reach more traffic is not enough, and it should also build its own channels to both increase revenue and speed up profitability. It can also provide a better example for other advertisers and channel parties.
This is the official portal for Verasity users to enter the Verasity network. VeraWallet provides perfect functions for storing, trading, and earning VRAs, and satisfies and supports account escrow and pledge functions. The VeraWallet currently offers a 25.55% APY for joining the VRA token pledge program, and provides access to dozens of fiat currencies such as HKD, GBP, and EUR for direct VRA purchases.
The app is a bounty app where users can answer various questions or complete various bounty tasks to earn VRA. most of the bounty tasks also come from advertisers’ placement requirements, such as downloading and playing a game, upgrading to a specific level in a game, answering surveys for certain products, etc.
The advantage of this type of bounty app is that it expands the types of ads that Verasity can take, from exposure ads to clicks, subscriptions, etc.
Verasity.tv is a software development kits (SDKs) specifically for advertisers. It allows advertisers to quickly integrate Verasity’s features into YouTube, Twitch, Vimeo, JWPlayer, Brightcove, VideoJS, Kaltura, FlowPlayer, iVideoSmart, and many other video playback platforms.
- POV Proof Protocol
This is one of Verasity’s claimed core, U.S. patented POV ad fraud detection protocols aimed at reducing the problem of ad fraud.
Verasity’s patented system securely validates viewer metrics (number of views), is transparent to the public, and is resistant to tampering. For Verasity, which relies on viewer metrics data, this system ensures the authenticity and integrity of all elements of its ecosystem. Today’s video ecosystem is plagued by questionable (and often false) viewership statistics. These statistics are used to assess the value of content or advertising and are manipulated to generate fraudulent revenue. PoV™ is a system specifically designed to securely validate the consumption of content in the ecosystem, transparent to the public and able to prevent tampering. It is used in the Verasity economy to ensure the integrity of the ecosystem by ensuring the authenticity of audience metrics.”
This is the description of the POV proofing protocol in the white paper, but through our analysis of the details, we found that in reality the role blockchain plays in this protocol is still one of data tamper-evidence and traceability, and that blockchain technology cannot solve the problem of ad fraud.
The real solutions to ad fraud include but are not limited to
1) When a viewer creates an account, they are assigned an anonymous ID and then tagged with the number of video views generated by that user.
2) Viewers who are not logged in can still watch free videos, but there is no way to confirm those views through PoV™. A single user cannot make multiple views at the same time.
3) Most viewers can only really watch one video at a time, and some undesirable people may try to use multiple browsers to watch at the same time in order to increase the number of views. So when a user plays multiple videos at the same time, PoV does not count the number of views, etc.
These solutions essentially hope to reduce the risk of ad fraud by limiting the rules for various types of determinations, and from the official data that has been leaked, it can effectively reduce the risk of fraud by nearly 40%. From the data point of view very effective, but the specific rules of data testing and determination of the dimension and other information temporarily did not find the relevant specific information, you can be careful to judge.
- Product role and development strategy From the product ecology created by Verasity, it is easy to see the role of each product and the overall development strategy of Verasity.
First, it is clear that all products can be divided into three general categories.
The first is channel-based products, such as Esportfightclub.com and Ttiviata, which play a role in the ecosystem by expanding profit channels, providing best practices, and expanding business scope.
The second type of products are infrastructure products, such as VeraWallet and Verasity.tv, whose main role is to provide advertisers with easy publishing, deployment and management tools. To provide users with a fully functional official wallet.
The third chapter is the protocol products, such as POV proof protocol. The main role of this product is to enhance the overall image of the brand, strengthen the hard power of the product in the competition, enhance the basic conditions for channel expansion, and increase the scalability of the product ecology.
Therefore, according to the role of each product above, it is easy to find that the overall development strategy of Verasity ecology is still very clear and unambiguous, their team knows that there are multiple obstacles to this track of the project, in order to stand out, they must first consolidate their own competitive advantage with traditional Internet channels or digital advertising trading platforms, and must influence the entire economy through perfect internal official channels. The team understands that in order to stand out, they must first consolidate their competitive advantages with traditional Internet channels or digital advertising trading platforms, and must influence the whole economic cycle through perfect internal official channels, and then further enhance the competitiveness of their products through excellent examples.
III. Team Qualification
Through the introduction of the whole competitive environment and various eco-products, it is easy to see that a well-established, experienced and creative team is necessary to break out from this track. It is important to point out that the products in this track are not limited to the blockchain industry because of the competitors they need to face. Therefore, the requirements for the team are also higher. Professional developers and marketers are needed, as well as very professional legal support and channel development.
The configuration of the Verasity team is exactly as we judged it.
The core team consists of both professional developers, content, and channel development personnel. The founder is a veteran technologist, and the fund director is a very experienced compliance expert. Of course the publicity of the team is superficial, the most important thing is the actual work performance of the team.
The Verasity team is to be commended for its performance, as we can see from several details.
The legal risk section of Verasity’s white paper is one of the most detailed and complete among the nearly 100 projects I have personally invested in.
The frequency of Verasity’s dynamic updates is also reassuring, which is very commendable compared to the nearly 100 projects I have invested in and worked with over the past 18 years.
The data of Verasity has also grown satisfactorily.
IV. Economic Model
For projects that are already up and running, we believe that the core is whether the business model and economic model are mutually supportive. Therefore, the focus is on whether the economic aspects of the ecology involving the VRA are self-contained in an internal loop.
The total production of VRA is 12,491,500,000 pieces, 50% of which are used for ICO. The current market circulation disclosed by CMC is 6,542,847,233, but in fact the portion held by Foundation is currently sold in 2020, and according to the data published by Verasity, the actual market circulation should be at 8,188,469,457 pieces of VRA, while the total supply drops to 10,356,527,868 due to Verasity’s buyback destruction policy
Current token position allocation (based on last official disclosure)”
From the various usage scenarios that have been shown, the economic system of VRA consists of six main aspects.
Output – Earning – Pledging – Spending – Income stream – Repurchase and destruction
Prophet Research Report｜Verasity：Watch to Earn Feasibility Analysis
It is important to note in particular that the unlocked tokens will be correlated to the current price, with the team tokens unlocked in 2020 due to lower prices. And in 2021 the total supply will be further reduced if the amount of unlocked tokens is lower than the amount of tokens repurchased due to the rise in various figures.
Therefore, the core of the entire economic system finds ways to increase the revenue stream.