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DROPDECK
A royalty & debt financing platform for fast growing businesses
Pure smart-contract & token-incentivized mechanism to evaluate & fund businesses worldwide
Alon Vo, Michael Phan, George Popescu (alon, michael, george (at) dropdeck.io)
For a quicker look at the concept of DropDeck, please refer to h
ttps://DropDeck.IO
Disclaimer: This document is for informational purposes only and does not constitute an offer or
solicitation to sell shares or securities in DropDeck or any related or associated company. Any
such offer or solicitation will be made only by means of a confidential offering memorandum and
in accordance with the terms of all applicable securities and other laws.
August 2017
2
EXECUTIVE SUMMARY
DropDeck is a funding platform that runs on the Ethereum blockchain because it requires this
blockchain's features such as smart contracts, payment, consensus mechanism and its own
digital token named DDD (Decentralized DropDeck).
DropDeck is shaping the most innovative solution to address all existing issues in
cross-border business funding for startups and SMEs, by issuing digital tokens and deploying
smart contracts to incentivize all token holders to collaborate with each other and c omplement
the A.I. development. The outcomes are 1) fundraising companies are as accurately scored
and ranked as possible so that funders can put their money to optimal use, and 2) all
participants in the ecosystem are financially incentivized to help funders get rewarded, so that
funders can keep funding and attract more funders to join the ecosystem.
Companies from all geographies can submit information to the platform according to
standardized funder-centric formats, or local agents called Hunters can help do so.
Funders screen fundraising companies based on scores, and can select local agents called
Delegates in the geography of the interested company to assist in further due diligence. After
conducting full due diligence, the funders are ready to make the loan. The Delegate is required
to enter into a legal arrangement with the funded company in order to enforce the repayment.
Funders then make a payment in DDD to a smart contract. This smart contract involves the
funders, the funded company, and the Delegate, so that the Delegate only gets paid if the
funded company pays back. The Delegate receives either a percentage of the repayment
amount, or a fixed amount held in escrow by the smart contract.
The loan can be paid back in the form of simple amortization with regular payments, or via
royalties or with other amortization schedules for companies who are not generating consistent
cash flow yet. The DropDeck reputation system encourages funded companies to pay back in
order to attract further funding in the future, and encourages Delegates to protect the funders’
interests in order to attract more clients.
The Decentralized DropDeck Token (DDD) will be issued and distributed to serve as the
ultimate reward for all participants in the funding value chain (Delegates, Hunters, Evaluators,
etc.). Since DDD's value reflects the overall success of funders and fundraising companies on
DropDeck, every participant must collaborate in the best interests of each other (e.g.
evaluate companies accurately, enforce repayment) and of DropDeck (e.g. contribute data to
make scoring algorithms smarter) in order to increase the value of their rewards.
DropDeck helps funders allocate capital to the most deserving companies while being informed
of these companies’ “Potential scores”, which reflects the degree of risk and potential in terms of
profitability. For the underwriting part of the loan, the fundraising company and the funders can
propose the terms (interest rate, royalty, schedule, etc.). DropDeck also makes suggestions with
its A.I. algorithms. One or many Delegates consolidate information to make final proposals. The
funders and the funded company who have “skin in the game” will come to a consensus to
choose a proposal and the according Delegate to carry out the terms.
DDD does not constitute a security because funders are entitled to rewards by doing work
and lending their DDD, not by holding DDD. Please refer to Legal Considerations.
3
There are 10 main stages in the funding process with 6 main participants:
● Send DDD to a funding/repayment ● Get rewarded as a Hunter, Evaluator,
smart contract Delegate, or Funder
● Cast an evaluation ● Predict a company's funding outcome
● Pay for score verification accurately
● Pay for premium features ● Borrow DDD from Funders
4
EXECUTIVE SUMMARY 2
THE PROBLEMS 7
SOLUTION BACKGROUND 8
THE TEAM 10
Team & advisors 10
A.I. XPRIZE advisory board 11
PRODUCT DEVELOPMENT 34
FINANCIAL PROJECTIONS 36
Revenue model 36
Revenue projections 36
Future plans 37
LEGAL CONSIDERATIONS 37
APPENDIXES 38
A.I. implementation 38
Trust scores 38
Topical Trust scores 39
Pipeline 40
Development roadmap 40
A.I. technologies 40
Validation 40
A.I. on and off chain 42
Scalability 42
Access Security and Data Privacy 43
Rules, Rationale, and Incentives in the Incentive Ecosystem 43
The mechanics of the Buyback Program 48
What smart contracts do 48
Stablecoin GDD 49
Market size 50
Competitive landscape 50
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“Investable capital [exceeds] the capital required to operate the economy by 2x. [But] the overall
allocation of investible capital is still way off. In particular, too much capital is allocated to
purely financial speculation such as high frequency trading and derivatives trades with a total
notional amount in excess of $500 trillion for OTC alone. Why does this matter? Because these
types of financial trades are largely zero sum trades. They shuffle money around but they don’t
expand the technological capability set of humanity. Only investments in basic and applied
research and investments in the commercialization of new technologies do that.”
- Albert Wenger
Managing Partner at Union Square Ventures
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1. THE PROBLEMS
One of the gravest problems of our generation is the global misallocation of capital. Currently,
out of $100 trillion of global investible capital1, only 1.4% is spent a year on facilitating
innovation2 that is meant to improve the society's overall efficiency and future quality of life.
That problem is in turn caused by the global m isallocation of attention, where information is
arranged in a way that people can no longer know what the most important things to invest
resources in are and why. Even Google who “organizes world's information" has not addressed
this problem. While these misallocations put our future in danger, only a handful of top minds
(e.g. Stephen Hawking3 and Elon Musk4) have repeatedly voiced and taken action.
OUR MISSION is to address the more direct problem - misallocation of capital - by a
ccelerating
capital flow into innovation, or namely guiding more capital to the most innovative and thriving
companies, instead of less efficient ones and zero-sum trades.
Between funders and fast-growing businesses are obstacles that prevent them from
evaluating each other and funding in a fast, accurate and reliable way. These obstacles
include geographical distance, complex legal and banking regulations among countries in
cross-border fund transfers, information overload/scarcity, and lack of means to verify facts and
build trust. Existing startup investment and SME lending platforms have not removed these
obstacles successfully, presenting a huge market of roughly $300 billion to disrupt (see
Appendix).
Existing startup investment platforms have failed to serve VC funds (who barely make money,
according to HBR5 and Kauffman Foundation6) and angels (whose typical return is atrocious7).
Most platforms (see Appendix), even very popular ones, are plain listings, leaving the funders
with the hassle of finding the needles in the haystack. A few platforms provide scores8 but are
not major contributors to decision-making9 because they neither factor in private information, nor
break down scores into verifiable components, nor prove their integrity. Those scores are
calculated by a finite number of people who may or may not have a direct relation with the
scored companies and the people behind them.
On the other hand, most SME lending platforms have to underwrite loans based on rudimentary
datasets, such as social data, that are non-proprietary, and rely on local data partners for
survival10, which barely enable them to scale globally. It's difficult for foreign data partners to
1
Global Invested Capital Market by Hewitt EnnisKnupp
2
A Debate with Peter Thiel and Marc Andreessen
3
Stephen Hawking warns the human race 'has no future if it doesn't go to space'
4
Elon Musk announces his plan to save humanity
5
Venture capitalists get pay well to lose money
6
Kauffman Foundation study “We have met the enemy and he is us"
7
W hy angel investors don't make money
8
techinasia.com/oddup-startup-rating-tool
9
techinasia.com/oddup-series-a-funding
10
The future of alternative lending
8
hand over data about their citizens because of local regulations and because they could have
handed them to other lending companies from their own country.
Furthermore, these platforms operate on siloed data and liquidity pools, have limited
accessibility, and are slow to bring new products to market. Additionally, with centralized
services, the user incurs additional risk such as theft or other failures, and unexpected issues
with payment processors. As a result, we set out to solve all these problems occurring when
funding startups and SMEs.
2. SOLUTION BACKGROUND
At first, we focused on providing the best rankings of individuals in terms of trustworthiness and
of companies in terms of potential profitability. Our plan to use A.I. technologies for that purpose
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passed the 1st round of 4-year IBM Watson A.I. XPRIZE competition12 to become 1 of 146
official teams around the world to be
supported by IBM’s and XPRIZE's network
of mentors13. Since data is essential to
training A.I. algorithms, which can be built in
the absence of sufficient data but are prone
to changes in presence of more data, our
principle is to incorporate exhaustively all
possible sources of data, beyond just data
from human input, in scoring and ranking.
11
bit.ly/DDAIComPlanMar
12
ai.xprize.org/teams
13
ai.xprize.org/mentors
14
1 0 data acquisition strategies
9
2 Data from data partnership Usually abundant, Dependent, costly or exclusive, local,
structured, accurate not always relevant/comprehensible
3 User’s behavioral metadata Free, uncovering Dependent on user’s level of activity ,
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hidden patterns, speculative (usually weakly linked to
authentic qualities being measured)
To overcome those shortcomings, also inspired by the blockchain reward system (contribute
computing power to earn coins), we designed an “i ncentive ecosystem" where each type of
user must contribute expected data in order to satisfy their own needs (e.g. selecting trusted
people in order to see more accurate rankings) or even get rewarded. However, monetary
rewards of fixed value cannott encourage data contributors to serve the long-term benefits of
the data users. Most A.I. companies rely on either in-house hand labelers, which is not scalable,
or data crowdsourcing platforms such as Amazon Mechanical Turks. They pay contributors
based on data quantity instead of quality, which can only be measured by the financial success
of the data users after incorporating the contributed data in improving their algorithms.
To strengthen the incentive ecosystem, we need a reward beyond fixed monetary value.
Interestingly, the Ethereum blockchain enables us not only to streamline funding at scale (with
instant cross-border payments enshrining transparency), but also disrupts lending (with forced
liquidation, monitored spending, crypto-credit history, etc.), and allows us to issue a digital token
that ties the long-term benefits of data contributors and data users together.
Furthermore, with smart contracts, our token can even tightly knit the benefits of many different
participants along the funding value chain together, in order for them to not only contribute data
but also collaborate in each other’s best interests (e.g. get rewarded, hunters find and list
promising companies, evaluators investigate and predict winners, Delegates make sure
borrowing companies repay, etc.). Every process is transparent, decentralized and automated
with smart contracts, and is thus instant, readily trusted, and cost-effective.
This element of A.I.-human collaboration is the holy grail in the A.I. field16 and one of the main
criteria in determining the winner of the IBM Watson A.I. XPRIZE competition. By issuing tokens
and deploying smart contracts, we can finally perfect the incentive ecosystem that unleashes
the full power of A.I.-human collaboration, where every participant fills a role and abides by the
coded rules to make the A.I. engine smarter over time and bridge any
online-offline/man-machine gaps.
Now our vision of a perfect funding platform becomes one that d
oesn't need to
do everything on its own (score people, evaluate deals, handle compliance,
etc.), but it should enable everyone to do everything, in everyone else's best
interests (get evaluated, funded, rewarded, etc.).
15
Data generated unknowingly through user’s activities
16
f orbes.com/sites/ibm/2016/08/15/beyond-ai-human-machine-collaboration-for-the-advancement-of-humankind/#6e0263e67d61
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In addition, by delegating offline, manual, locally-specific operations and responsibilities to local
partners, we can scale globally. For instance, our Swiss and Singaporean legal partners are
proposing possible legal structures for funded companies and countermeasures against loan
delinquency. When our incentive ecosystem is in place, they will participate and be rewarded for
their proposals or potentially have their proposals bid for the highest prices.
Furthermore, DropDeck’s principle is to integrate and partner with other DApps (Civic, Status,
Monaco, Steem, Gnosis, etc.) to exchange values and enrich the ecosystem. We also seek to
expand the ecosystem by providing a superior funding channel for the majority of companies
that can neither afford a token sale campaign nor meet a long list of requirements to run a
successful campaign. Most companies will need a less costly and less distracting funding
alternative than a token sale and DropDeck can become their very first choice.
3. THE TEAM
Our core team members have proven track records of entrepreneurial, technical skills and
speak multiple languages. The other team members have expertise in multiple areas including
fintech, A.I., blockchain, investment and lending. In addition, all members have prior experience
in either founding or working for startup companies.
blockchain. Cofounder at PwC's Vulcan Digital Assets Services. Fintech National Leader
at PwC Australia.
k) Dr. Amir Banifatemi - A.I. XPRIZE Lead - "DropDeck has a good chance to win."
m) Dr. Chris Marshall - Analytics & Cognitive Specialist at IBM Watson
n) Dr. Jiamei Deng - Professor of A.I. at Leeds Beckett University, UK
o) Barnabas Szilagyi - Managing Principal, Director of Data at Analytics Capco
Our principle in product design is to save funders’ time by always bringing what
matters the most to them first.
DropDeck scores, ranks and recommends trustworthy investors or entrepreneurs (with high
Trust scores) and potential companies (with high Potential scores) to one another. Breakdown
and evidence of these scores can also be seen on the payment of a fee.
With DropDeck, funders, incubators, competition judges, funds, etc. can source, screen,
evaluate, fund the most innovative and thriving companies in the fastest and most reliable ways.
The most suitable and potential companies are placed at the t op of a funder’s home page.
With DropDeck, entrepreneurs can improve their chances of getting funded, selected, or
winning prizes. Most suitable and potential investors are recommended on demand on the
Recommendation page.
Each company is represented by a deck. Each deck includes different claims, and each claim
represents a different aspect of the company, such as b usiness model, team, traction, etc. In a
deck page, claims are arranged in layers, where each claim is supported by children claims on
the layer right beside it. A claim page contains a summary slide showing key points and all
details that support those key points.
A user can evaluate a claim favorably (Approve) or unfavorably (Deny). For each claim,
aggregated evaluation results are displayed as an e valuation bar. A deck with a high ratio of
Approvals-to-Denials among its claims would have a high Potential score, represented by a blue
evaluation bar, as opposed to a red one. The user can choose to view the evaluation bar by all
evaluators or by only trusted evaluators, which are collectively called a T rust Circle.
FUNNEL DESIGN
c) Claim page: all details on an aspect of the company are listed. Each claim has 5
sections - “Slide,” “Supporting files,” “Evaluation," “Detailed note," and “Comment.” All
information on this page support the key points listed in the “Slide.” Funders can
evaluate this claim by choosing “Approve" or “Deny."
TRUST CIRCLE
DropDeck builds in-house standardized deck templates which arrange information in the most
investor-centric way, in order of importance. If entrepreneurs choose to follow these templates,
they save time (which can otherwise be spent on more productive activities - interacting with
customers, building the product, bonding with teammates, etc.) and maximize the chances of
getting funded. Inexperienced funders can follow guidelines laid out in these templates to
screen companies quickly. These templates are built on the basis of “storyfunding”17, which are
tested, validated, and expected to improve over time.
Our final goal is to score, rank, and recommend companies in terms of potential profitability.
In order to approach the true measure of a company’s quality (called “Potential score"), our
principle is to incorporate all possible sources of data, including evaluation data from people on
DropDeck. A user's evaluation usually incorporates all the available p rivate information about
the evaluated company (e.g. a funder may deny a deck's Team claim because the funder
knows the CTO of that company is, albeit talented, immature), which is o therwise inaccessible
to any kind of data partners or crawlers. However, not everyone’s evaluation can be trusted.
17
StoryFunding deck template
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Existing platforms operate on a one-user, one-vote principle. This creates an environment
where rankings can be manipulated by sybil attacks and the service providers such as Quora,
Reddit, Facebook, etc. must pro-actively identify and block abusers. On the other hand, Steem
operates on the basis of one-token, one-vote. Under these models, individuals who have
contributed the most to the platform, as measured by their account balance, instead of
individuals who have the most perceived credibility on the matter at hand, have the most
influence.
Therefore, we created another score to measure the level of trustworthiness of each user on
DropDeck (called “Trust score"), which would serve as the weight of that person's evaluation
when aggregated.
Both the Trust score and Potential score are essential to building a highly dynamic relational
graph where each entity can be a company or a person, and e ach entity's change in score
would have a ripple effect on all associated entities.
We hand-craft expert models with all feature weights determined by expert opinions collected
via surveys, and build reinforcement learning models to be trained from continuous labeled
data. Then we combine the scores from these models to obtain a final score for each user. The
more data available over time for training, the more scores from the trained models will
contribute to the final scores.
Ground truth data is generated from crowd evaluators (any user on the platform) and expert
evaluators (individuals appointed by DropDeck) through a feature called “Trust" on our website,
designed to collect labeled data. For generating this data, a “trustor" can assign a score that
indicates his level of trust to any “trustee" on the platform. Surveys are also designed to actively
collect labeled data, where evaluators are shown pairs of users who were known to them in their
15
network, and are asked to identify the more trustworthy one in each pair. Each pair of users is
ranked by multiple users to reduce bias. The models are trained for these user ratings and
rankings in the ground truth training set, using reinforcement learning methods to generate a
weight associated with each feature.
After months of research and validation since February 2017, we have selected the following
components for calculating the Trust score and Potential score, list them in order of weight
(importance) and will implement them one by one (not all at once).
● Crowd evaluation: how people rate or vote for the trustworthiness on DropDeck
● On-site behavior: signs of spam, flip-flop, etc. (negative) or moderation, consistency,
etc. (positive)
● Crowd interaction: such as how strongly you spread and attract information
● Venture credentials: trustworthiness of co-investors/co-founders, potential of the
investment portfolio/companies founded
● Associated entities: trustworthiness of the people, potential of the companies related
to the user
● Ratings/rankings: the reputation on a set of reliable websites (Quora, MatterMark, CB
Insights, etc.)
● Social activity: your behavior, interaction on your social networks (Linkedin, Facebook,
Twitter, etc.)
● Linguistics: the use of the language and the people who interact with the user
● Digital footprints: the number of your identities on the web
● Identity consistency: consistency of your information across those identities
● Venture credentials: trustworthiness and amount invested of investors and cofounders
● On-site evaluation: evaluators’ evaluation weighted by their trustworthiness index
● Suitability to a user: based on the preferences, achievements, expertise, and interests.
● Associated entities: trustworthiness of the people and potential of the companies
related to the user
● Ratings/rankings: reputation on a set of reliable websites (Quora, CB Insights, etc.)
● Social reception: reputation on social networks (LinkedIn, Facebook, etc.)
● Linguistics: the use of language of the company and of the people who interact with
the company
● Identity consistency: consistency of the company’s information across the web
Since the Trust score takes into account all user behavior and interaction with other users, it
represents a reputation system to protect DropDeck users, restrict spammers/criminals, and
encourage healthy activity. This reputation system will be present in every aspect of the user
experience, from initial sign-ups to evaluation to comments, allowing users to easily identify
users who may have a history of misbehavior or spamming. Newly-joined users will have to
obviously improve their Trust scores to build trust in the community. This method could reduce
“Distrust" reports handled by oracles. Likewise, the reputation system will enhance the
competitive experience by encouraging users to behave with integrity, be active and build their
reputation. The platform’s oracle selection engine gives higher priority to users with higher Trust
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score. Each individual user will also have the ability to set the minimum Trust score threshold for
the deck’s or other information's visibility. Having a higher Trust score thus allows users to see
more private content on the platform. A global ranking system will be viewable on DropDeck to
encourage competition. Ranks will be rewarded with DropDeck subscription for premium
features or other promotions.
The challenge we faced is deriving algorithms for scoring that most people can consider to be a
fair assessment of the subjective qualities being scored. Moreover, there's basis to judge
whether a definite score is fair or not. Common questions might be “Why is this company 70? 70
to what? Which one is 100?” Therefore, the definite Trust and Potential scores will be hidden
and replaced with percentile scores. Now when you see a company with a score of 70, any
one can know that company has more potential than 70% of the other companies on DropDeck.
It requires further research and collaboration with reputable partners to establish scoring
standards before definite Trust and Potential scores make sense and are public.
As mentioned, there are existing platforms that provide scores but cannot prove their integrity.
We claim to measure Trust scores, but how can we make people trust these Trust scores?
Contributors do not want one score to tell them whether a company is good or bad18. Common
questions are “How can I trust these scores?”, “How were they calculated?”, “Based on what?",
and “Who contributed to these scores?". We need a more decentralized method to store data to
ensure the integrity of the data used for scoring, or “score evidence.”
Blockchain can solve this data integrity issue and, at the same time, solve the privacy issue,
where evaluators want their evaluation data to be visible to only trusted parties.
Storing information directly on the blockchain ensures that the information is fully secured by the
blockchain’s properties and is immediately viewable to those permissioned to access the chain.
However, at the same time, storing large data files slows block processing speeds and presents
potential challenges to scaling the system. In contrast, encrypted links (pointers) are minimal in
size and are activated once a user with the correct private key accesses the block and follows
the encrypted link to a separate location containing the information. As an example, the
blockchain cannot directly store abstract data types such as scanned documents and images.
Therefore, our solution involves using the public blockchain as an access-control manager
to score evidence, which are stored off blockchain. A specific set of standardized data were
to be stored directly on the blockchain for immediate, permissioned access, supplemented by
off-chain data links when necessary.
Our system tracks and updates an entity’s dataset each time an event happens. This
information includes standard data, such as an entity’s type (person, company), location, and
other notes. Traditionally, this information is tracked in a centralized database. A standardized
set of information from this flow of information originating from an entity would be directed to a
18
techinasia.com/oddup-series-a-funding
17
blockchain transaction layer. The surface information on this transaction layer would contain
public information such as the number of followers, date created, etc. Information stored on the
blockchain could be universally available to a specific individual through the blockchain private
key mechanisms, enabling people to share information with trusted parties more seamlessly.
The blockchain can strengthen data integrity while better protecting entities' private
information. The blockchain’s inherent properties of cryptographic public/private key access,
proof of work, and distributed data create a new level of information integrity. Each entity
connected to the blockchain network has a secret private key and a public key that acts as an
openly visible identifier. The pair is cryptographically linked such that identification is possible in
only one direction using the private key. As such, one must have the private key in order to
unlock an entity's identity to uncover what information on the blockchain is relevant to their
profile. Therefore, the blockchain public/private key encryption scheme creates identity
permission layers to allow people to share distinct identity attributes with trusted parties,
reducing vulnerabilities stemming from storing private information on all nodes.
Pros Data is immediately visible and Expansive score verification data and
ingestible to all connected people, abstract data types (e.g. scanned documents,
making blockchain the single source images)
of truth Storage of any format and size of data
Cons Constrained in the type and size of Data is not immediately visible or ingestible,
data that can be stored requiring access from related entities and
through a payment wall
Simply asking people to evaluate a company's (deck's) claim would neither guarantee their
honesty nor seriousness in incorporating all of their private information in evaluating. Moreover,
an evaluation is usually meant to only hold for a finite amount of time. Therefore, without an
expiry date specified, it's difficult or rather irresponsible to cast an evaluation anyway.
Inspired by decentralized prediction markets such as Augur and Gnosis, our solution capitalized
on their incentive mechanism, transparency, security, and ability to aggregate private
information, which is otherwise inaccessible. A prediction market is a place where individuals
can wager on the outcomes of future events. Those who forecast the outcome correctly get
rewarded, requiring people to effectively put their money where their mouth is. This is designed
to incentivize people to forecast outcomes as carefully as possible based on what they know.
Among the differences between claim evaluation and prediction market is that it costs a fixed
amount of DDD to cast an evaluation, as opposed to a varying amount of money to buy a share
in the market, so that evaluators feel less biased when casting evaluation.
Besides monetary-rewards, the incentive ecosystem does not always reward users with DDD,
but also satisfies users' needs in exchange for voluntary, unconscious, and incremental data
contribution in various forms (evaluation, users, relationships, etc.). The beauty of this incentive
ecosystem is that it makes people contribute data unknowingly, making their contribution less
susceptible to bias, manipulation or spam. Also, since people contribute data for their own sake,
they are incentivized to provide data with the highest possible quantity and quality.
For more details, please refer to the DropDeck Incentive Ecosystem.
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Contribution Lending
Recipient Mostly technology startups - Mostly SMEs - small to medium
early-stage, fast growing companies companies in mostly traditional
without stable cash flows businesses with stable cash flows and
specific spending purposes
Repayment Receive a percentage of the funded Receive a fixed amount (including
company's future revenues (royalty) interest and principal) on a regular
over a certain period of time, up to a (mostly monthly) basis over a certain
specific amount period of time
Pros Can send DDD in installments to Entitled to a fixed regular payment
minimize risk
Cons Not premised on an expectation of Must send the total amount of DDD
profits immediately
To perfect these funding types, we capitalize on the blockchain advantages at all 4 levels:
b. The consensus mechanism: allows oracles to submit information and cast votes to
arrive at fair and transparent decision-making. If a dispute arises that requires a higher
level of scrutiny, DropDeck's in-house jury system will be activated to adjudicate.
c. The token: serves as the currency for all transactions and as the ultimate reward for
participants in the incentive ecosystem.
d. The smart contract: governs the incentive ecosystem, protects and ties the benefits of
all participants to each other to incentivizes them to contribute data and collaborate in
the best interests of each other.
It is possible for both funders and fundraising companies (fundraisers) to make contact and fund
outside of DropDeck. Therefore, we must add more and more benefits of funding with DDD
20
instead of funding elsewhere in order to attract both funders and fundraisers to adopt DDD as
the must-have currency for funding. The current 11 benefits are:
a. Speed: Instantly fund any company in urgent need, anywhere in the world.
b. Transparency: When a funder funds a company on DropDeck, the funder sends DDD to
its cryptocurrency wallet, through which the funder can monitor its spending activities.
c. Portfolio: Fund many different companies at the same time to minimize risk.
d. Installment: Contribute in installments to minimize risk and encourage the funded
company to consistently deliver.
e. Buyback: DropDeck's earnings will accrue in the DDD Smart Contract, a share of which
is used to buy back DDD tokens on exchanges, effectively increasing the token net
worth of all DDD holders. For more details, please refer to the A
ppendix.
f. Ecosystem: When a funder funds a company on DropDeck, every participant in the
ecosystem (hunter, evaluator, Delegate, etc.) receives value and is thus incentivized to
contribute more to the ecosystem and help minimize risk in future funding endeavors.
g. Reputation: Funding innovative and thriving companies on DropDeck improves the
funder’s and all associated entities' scores; improves the funder’s global ranking to
attract more and better entities (entrepreneurs, investors, employees, service providers,
etc.); grants the access to private information; and increases the accessibility to
DropDeck services.
h. Escrow: Funders’ tokens are held until all smart contract requirements are met.
i. Leverage: A funder might not have a lot of money to fund innovative and thriving
companies around the world. However, if a person gets DDD tokens at the highest
discount during the token generation event, later the person as a funder is likely to have
more value in DDD for funding.
“It’s common to make more money from your single best angel investment than all the rest put
together. The consequence of this is that the real risk is missing out on that outstanding
investment.” - Sam Altman, President at Y Combinator, Co-chairman at OpenA.I..
There is little doubt that today’s most innovative and thriving startups might become huge
tomorrow. Looking backward, between 1955 and 2005, 88% of Fortune 500 companies have
disappeared19. Looking forward, 50% of today's S&P 500 will be replaced in the next 10 years20.
19
Fortune 500 firms 1955 vs. 2015
20
Innosight's 2016 study of turnover in the S&P 500
21
Everyone is searching for the next Google. However, most startups have high risk, short
operation time, no collateral, and little or no cash flow, so most are not eligible for loans.
Funding such startups means the contributor taking a high level of risk. However, if only a
fraction of the funded startups succeed, they might pay back more than enough to the
community.
With DropDeck, we want to address the existing deficiencies in startup funding so that a
contributor can find the most potential startups faster, minimize risk and diversify, and make
sure successful startups give back to the community.
a) “All the good ones": Finding many great startups is not enough if there’s one startup out
there that might become the next Google, who might be too busy solving problems to
marketthemselves. “Hunters" in DropDeck's incentive ecosystem are tasked to smoke
out all promising startups.
b) Further minimization of risk: The tokens used for funding are held in an escrow smart
contract; the contributee that a contributor intends to fund must fulfill a local Delegate’s
requirements; a contributor can contribute to a portfolio of different startups and also can
contribute in installments to constantly motivate the contributee to achieve and deliver.
c) Reward the ecosystem: Without the ecosystem on DropDeck, no one would be funded in
the first place, Thus, it is necessary for the contributee to pay back, and incentivize all
participants to help fund more and more innovative and thriving startups. Local
“Delegates" are tasked to oversee this process.
a) Contributor: the funder who believes in the future of an innovative and fast-growing
startup.
c) Hunter: the one who searches for promising startups, reaches out to get their approval
and consolidate their information to publish on DropDeck. A Hunter is automatically
rewarded when the hunted startup is funded.
d) Referrer: not all Hunters are allowed to or have enough information to publish a deck, so
they can only refer a promising startup and a suitable contributor to each other.
e) Evaluator: people who evaluate a startup's claims for a chance to get rewarded (for how
this works, see Appendix)
f) Delegate: a professional or company local to the contributee who submits proposals of
legal arrangement with the contributee (in the best interests of all parties) to bid approval
from both the contributor(s) and contributee.
a) A contributor can contribute DDD to one or many companies on DropDeck.
wnership.
b) A contributee can only be funded after all founders have verified their o
22
c) When contributor decides to fund a contributee on DropDeck, the contributor sends an
amount of DDD from his/her wallet on DropDeck to a s mart contract address. The DDD
will be held in escrow in that smart contract.
d) A contributee can configure its funding campaign to accept contribution from only one or
many contributors (crowdfunding).
e) In case of crowdfunding, contributee must set a consensus threshold, which is the ratio
of the weighted net votes to the weighted total possible votes at which a decision is
passed. The default consensus threshold is 10%.
f) The contributee must set the number of installments that the total contribution will be
divided into, the time interval between installments, and the r oyalty term, which is the
percentage of the contributee's profit that it pledges to pay back to the DropDeck
ecosystem. The higher these numbers are, the more likely that company is funded.
g) When a contributor wants to fund a company that has already been contributed to by
many contributors, the contributor can contribute any amount of DDD, or pay a b
uyout
amount to remove all existing contributors, effectively end the funding campaign and
fulfill solo.
h) When the funding campaign ends and all KYC/AML o bligations are fulfilled by the
company (including choosing a Delegate, approving that Delegate's proposal of legal
arrangement, and fulfilling the Delegate's requirements), all contributed tokens in its
escrow smart contract would be equally divided into the number of installments, and the
first installment sent to the contributee’s wallet on DropDeck.
i) To be chosen, each Delegate submits their proposal of legal arrangement, and expected
fee in terms of a percentage of the future royalty from the contributee.
j) A Delegate (and its proposal of legal arrangement) must be approved by all founder(s) of
contributee and by the contributor(s) (according to the consensus threshold).
k) If no Delegate is chosen, the funding process pauses. So it's the responsibility of both
the contributor(s) and contributee to find a Delegate from the beginning.
l) The Delegate might be a contributor, and is granted access to monitor the contributee’s
business bank accounts' balance and/or cryptocurrency wallet addresses.
m) According to the Delegate’s proposal, it then may or may not enter into a l egal
arrangement with the contributee to make sure the contributee will pay back to the
ecosystem per its royalty term when it turns profitable.
n) When the date of the next installment is reached, all contributor(s) will vote on whether
the installment will be sent or not. In case of many contributors, the consensus threshold
must be reached for the installment to be sent. Before this date, the contributee can
submit their evidence of achievements to serve as reference for the contributor(s).
o) The contributee will pay back to the ecosystem per the terms legally agreed upon and
signed with the Delegate that involve a royalty smart contract address issued by
DropDeck. When that happens, it sends an amount of DDD from its wallet on DropDeck
23
to that smart contract address, which will be distributed to all participants involved in the
funding process, according to proportions pre-determined by DropDeck.
p) At any time, anyone can send a report to the contributor(s) about anything related to the
contributee or Delegate or anyone else that might jeopardize the benefits of the funding
ecosystem, so that the contributor(s) can take actions accordingly (e.g. replace the
Delegate, pause funding)
Out of Asia’s top 7 invested companies in 2016, whose capital invested accounts for 78% of all
invested capital in Asia21, all 7 of them operate in the lending sector. The online lending market
is huge (more than $2 trillion), out of which the addressable market for business lending is $284
billion22. This market is extremely crowded too, but the challenges faced by most of them are
almost the same. Despite advantages compared to banks such as no excessive overhead costs
(e.g., an outdated network of branches) and operational efficiency (e.g., quick turnaround times
for credit decisioning), online lenders still suffer from high APR for borrowers (stuck with “cream
of the crap” who are rejected by major retail banks), low scalability (because of dependence on
local data partners), and macro-sensitivity (e.g. cannot predict nor avoid macroeconomic effects
such as a national rate hike), among others.
On the other hand, big banks are sitting on troves of data (i.e. account balances, inflows,
outflows), spending (i.e. transaction-level purchases), and risk (i.e. delinquency, write-off) data,
and are thus able to assess a single borrower’s creditworthiness based on metrics captured
from a variety of bank-offered products, underwrite credit with more predictive certainty and
confidence, and price products a lot more competitively (i.e. avoid having to tack on an
excessive “uncertainty premium”). These advantages ultimately lead to better unit economics to
borrowers, allowing banks to cherry-pick the most creditworthy borrowers within each risk band.
Despite these setbacks, for the first time ever with our incentive ecosystem that combines A.I.’s
predictive capabilities with the blockchain's features (payment, consensus mechanism, app
token, and smart contract), DropDeck can aggregate as much quality data as possible to
perform creditscoring and suggest more competitive interest rates over time, attract more
creditworthy borrowers, scale globally and offset local macroeconomic effects, and ultimately
plug financial institutions into the ecosystem.
Other deficiencies in business crypto-lending we want to address are:
a) Thin credit file: not everyone has a credit history with banks
i) Backers: a borrower (borrowing company) can ask trustful users to become
Backers, who will have a part of their DDD balance frozen, and force-liquidated in
case the borrower fails to make a payment for a period of 10 grace days.
21
Life.SREDA's Money Of The Future 2016-17
22
EY's Alternative Lending report
24
ii) Blockchain-based credit history: A borrower can submit one or many
cryptocurrency wallets and verify the ownership of these wallets to improves its
creditworthiness and Trust score.
b) Minimize risk: similar to contributing with DDD, both the lender and borrower must
choose and approve a Delegate's proposal of legal arrangement to prevent loan
delinquency.
c) Enforce repayment: an Insurer can see all loans made (from the newest) and bid to offer
insurance to lenders. Likewise, a Collector can see all loans made (from the oldest) and
bid to offer collection services to lenders.
d) Pressure to underwrite loan correctly: in the absence of sufficient data to calculate
interest rates, DropDeck can allow the borrower to ask and potential lenders to bid (in a
Poloniex-like fashion)
e) Token volatility: a borrower must repay with the same denomination it was funded with,
which is DDD in this case. The token price may rise to the point the borrower can no
longer afford repayment. Solutions include:
i) Ignore rate: the lender and borrower agree upon a fixed monthly payment
amount instead of applying the interest rate suggested by DropDeck.
ii) Buy option: the borrower can buy an option to buy DDD from DropDeck at a
predetermined price within 7 days before the loan matures in the future.
iii) Pawn token: the borrower can pawn the amount of tokens received from lenders
on DropDeck and pay a fixed fee in order to receive that same amount of tokens
when the loan matures.
iv) Issue stablecoin: we can create a seigniorage modeled coin, say ‘USDCoin’ that
maintains its value with respect to the US Dollar, and put them on exchanges to
be traded. If the price were above one dollar, the coin algorithm would print more
coins; if below a dollar, the algorithm would discontinue printing. This allows the
price of the coin to stay relatively close to parity with the dollar. These coins have
the transactional qualities of cryptocurrencies and are critical for mass adoption
as they are pegged one to one with fiat currencies and resistant to day-to-day
volatility. For more details, please refer to the Appendix.
a) Lender: the funder who believes the borrower will thrive for as long as the loan maturity.
b) Borrower: the borrowing company that needs immediate funding for specific purposes.
c) Backer: trustworthy users with a positive balance in DDD, who serve as collateral to the
loan.
d) Evaluators: people who evaluate a startup's claims for a chance to get rewarded.
e) Insurer: a professional or company willing to insure the loan.
25
g) Delegate: a professional or company local to the borrower who submits proposals of the
legal arrangement with the borrower (in the best interests of all parties) to bid approval
from both the lender(s) and borrower. The Delegate can also be the Insurer.
a) A lender can lend DDD to one or many companies on DropDeck.
b) A company can only be funded after their one or many founders have verified their
ownership.
c) When a lender lends DDD to a company on DropDeck, the lender sends an amount of
DDD from your wallet on DropDeck to a smart contract address. The DDD is held in
escrow in that smart contract.
d) Many lenders can lend to the same borrower, which is recommended to minimize risk for
lenders.
e) The borrower must set a consensus threshold, which is the ratio of the weighted net
votes to the weighted total possible votes at which a decision is passed. The default
consensus threshold is 10%.
f) After DropDeck has aggregated sufficient data, it would suggest an interest rate for the
loan, which is subject to change.
g) The borrower itself can propose a different interest rate. At the same time, any lender
who has sent DDD can also propose a different interest rate.
h) When the funding campaign ends and all KYC/AML obligations are fulfilled by the
borrower (including approving an interest rate, choosing a Delegate, approving that
Delegate's proposal of legal arrangement, and fulfilling this Delegate's requirements), all
lent tokens in its escrow smart contract would be sent to the company’s wallet on
DropDeck.
i) To be chosen, each Delegate submits their proposal of legal arrangement, and expected
share of the future repayment from the borrower.
j) A Delegate (and its proposal of legal arrangement) must be approved by all founder(s) of
borrower and by the lender(s) (according to the consensus threshold).
k) An interest rate (or an “ignore rate" fixed monthly payment) must be approved by all
founder(s) of borrower and by the lender(s) (according to the consensus threshold).
l) If neither a Delegate nor an interest rate is chosen, the funding process pauses.
m) The Delegate might be one of the lenders, and is granted access to monitor the
borrower’s business bank accounts' balance and/or cryptocurrency wallet addresses.
26
n) The Delegate then must enter into a legal arrangement with the borrower to prevent loan
delinquency.
o) The borrower will make a repayment on a monthly basis per the terms legally agreed
upon and signed with the Delegate that involve a r epayment smart contract address
issued by DropDeck. This amount will be fixed every month and includes a portion of
both the principal (which increases every month) and the interest (which decreases
every month). When that happens, it sends an amount of DDD from its wallet on
DropDeck to that smart contract address, which will be distributed as to all participants
involved in the lending process, according to proportions pre-determined by DropDeck.
p) Lender(s) can buy an insurance from an Insurer any time, which must be approved by
the lender(s) (according to the consensus threshold). The Insurer must either enter into a
legal arrangement with the Delegate, or have a sufficient amount of DDD in its wallet on
DropDeck, which will be locked upon the approval of all parties.
q) At any time, anyone can send a report to the lender(s) about anything related to the
contributee or Delegate or anyone else that might jeopardize the benefits of the funding
ecosystem, so that the lender(s) can take actions accordingly (e.g. replace the Delegate)
r) When the borrower fails to make a repayment, after 10 grace days,
i) If there is an Insurer, the amount locked in its wallet will be force-liquidated, or
the Delegate will work with the Insurer per their legal arrangement to make sure
the Insurer deposits a sufficient amount of DDD and sends it to the repayment
smart contract address.
ii) If not then, if there is at least a Backer, the amount locked in wallet(s) of the
Backer(s) will be force-liquidated.
iii) If not then, Delegate will work with the borrower per their legal arrangement to
make sure the borrower deposits a sufficient amount of DDD and sends it to the
repayment smart contract address. The Delegate can also contract a Collector.
Our principle is to create an ecosystem where everyone simply does the best for each
other for their own sake, and anyone who goes against that simply finds oneself
detached. Since everyone can only benefit from benefiting everyone else, it's predictable
that everyone would do their best.
Our process of constructing the laws for such an ecosystem, called the “incentive ecosystem",
was fairly straightforward. We simply listed all types of people we want to serve (a.k.a.
customers), and all types of people who can support them besides us. For each type, we
identified what they need the most (e.g. accuracy, safety). Then we identified what we need the
most to serve our customers the best (e.g. data, physical operation). Then we tried to l ink
inputs and outputs to each other, and designed our product accordingly to incentivize
27
everyone to do something we or someone else needs the most with something that we or
someone else can provide.
To top it off, besides aforementioned non-monetary incentives, our principle is to provide an
incentive of highest possible value to make sure everyone does their best.
A company that sells tokens to its customers ensures those customers are better aligned with
the company’s success. If a participant is buying a token, the participant is incentivized to help
the company’s product and ecosystem expand, bring in other users, maximize the tokens’ utility,
and we hope that demand for the token will increase and it may become more valuable. We are
creating the network and the virality effect with these monetary incentives.
Therefore, in whatever a DDD holder does, be it data contribution or legal arrangements, that
person is incentivized to prioritize DropDeck's long term success. This incentive is as strong as
the value of DDD, which is, as an app token, higher than fiat money and potentially even
cryptocurrency.
a) Value: DDD increases in value to reflect all users' contribution to the ecosystem.
b) Voting: When we survey for the future implementation of new features, DDD holders can
vote for features they need the most. They get the features and we get their satisfaction.
c) Liquidity: As soon as DDD is listed on exchanges after the token, it can be freely
exchanged.
iii) Pay other people in the ecosystem to incentivize them to help you
(Delegates/Enforcers, etc.)
a) DDD is backed by the collective brainpower behind Ethereum and all DApps built on it.
b) DDD is backed by the active value generation from the utilities of the token rather than
just its passive appreciation.
28
If DDD can tie the benefit of token holders to that of DropDeck, then smart contracts can tie the
benefits of different participants in the funding ecosystem to each other. Simply put, the
conditions for someone to receive DDD include one or many others receiving DDD. The result is
everyone’s effort is rewarded, almost instantly after all conditions are fulfilled, growing the
awareness and appreciation of everyone’s efforts behind those conditions and encouraging
future efforts.
d) A global ecosystem: there is no longer a barrier between funders and fundraising
companies from different countries since there will always be local stakeholders to take
care of physical and local-specific operations.
Since every token holder holds tokens, DropDeck can effectively enforce a state of c
ommunity
policing, where each token holder look out for any Hunter, Delegate, or funded company who
collude against the benefits of the funding ecosystem. This solves the “who watches the
watcher” problem.
As long as DDD holders collaborate in the best interests of each other
→ Contributors and lenders would see positive results from their funding and repeat funding.
→ DDD’s demand would increase and more tokens would be traded.
29
→ DDD holders would continue to get rewarded with DDD for any kind of collaboration and
increase their token net worth over time.
Voting is common on DropDeck and on each instance of voting a different number of people will
be chosen from a different pool of possible voters by a weighted random selection process. If
chosen, a voter will be notified and may submit one vote to influence the outcome of the
decision-making. Once the desired quorum has been reached, a decision will be made.
A voter’s probability of being selected will be proportional to his or her DDD share of the total
DDD supply of the pool of possible voters. Specifically, DDD share is calculated as (user DDD
balance) / (total DDD supply). In order to do the random selection, the smart contract will
provide a function that hashes a random seed provided by DropDeck, the user’s address, and
the block number. The smart contract will use this hash to extract a random number from 0 to 1.
The random number will then be scaled by the desired number of possible voters. Finally, the
random number will be compared to the user’s DDD share. If the random number is less than
the DDD share, then the user is chosen as a voter.
b) Approving a change of the funding deadline made by the deck's founder(s)
The launch of DropDeck, and the corresponding Token Generation Event (TGE), are organized
around smart contracts running on Ethereum. The TGE will commence at 1
3:00 (Greenwich
Time), on November 21th, 2017:
● Only ETH and BTC can be contributed and turned into DDD.
30
● The TGE will be soft-capped upon receipt of 29,999 ETH.
● 50% of all tokens to be sold during the TGE.
● The tokens will be sold at a discount to early buyers at a sliding rate, starting at 1
5,000
DDD: 1 ETH (50% bonus, during the Power Hour - first hour of the sale), 1 ETH =
14,000 DDD (40% bonus - Day 1), 1 ETH = 13,000 DDD (30% bonus - Week 1), 1 ETH
= 12,000 DDD (20% bonus - Week 2), 1 ETH = 11,000 DDD (10% bonus - Week 3), 1
ETH = 10,000 DDD (no bonus - Week 4).
● If the soft-cap is reached before the end of the 30 days, we will continue to sell and
create DDD for 7 days. This will protect those who wish to participate in the event if all
tokens sell out quickly.
● DDD tokens are expected to be distributed at most 31 days after the TGE, and
transferable at least 7 days after the end of the TGE.
50% of DDD created during the TGE will be allocated to the public contributors who send ETH
and BTC to the smart contract address. This amount is DDD is non-transferable for 7 days after
the TGE ends.
12% of DDD created during the TGE will be allocated to Founders and Advisors, with a
36-month vesting period, and a 6-month cliff as follows:
- 25% of DDD allocated will be transferrable at the same time as for the public;
- 25% of them will be locked for 12 months;
- 25% of them will be locked for 24 months;
- 25% of them will be locked for 36 months.
When someone leaves, his/her unvested DDD will be distributed proportionally to the remaining
balance of the others.
7% of DDD created during the TGE will be allocated to a pool reserved for future key hires and
advisors. DDD in this pool will be allocated later when a key hire/advisor is confirmed and will be
activated with the same 36-month vesting period, and the 6-month cliff as above.
31
1% of DDD created during the TGE will be allocated to early contributors according to a list of
weighted contributions (including referring advisors, investors or key members, helping with the
smart contracts, helping with legal arrangements, helping with the marketing campaign, etc.),
and will be transferrable at the same time as for the public. After allocation, the remaining
amount of DDD will be added to the Reserve.
5% of DDD created during the TGE will be allocated to pre-TGE marketing and referrals during
the TGE (5% referral commission). After allocation, the remaining amount of DDD will be added
to the Reserve.
25% of DDD created during the TGE will be allocated to a Reserve, locked and released
according to the following rules:
- 35% will be allocated for data acquisition costs, development, marketing, promotions for
new features, rewards for prominent users, and other corporate needs.
- 45% will be allocated to acquire other companies, patent needs and IP needs;
- 10% will be allocated to external partners and bug bounties, if needed;
- 10% will be allocated to a DropDeck fund dedicated for funding the most innovative and
thriving companies on DropDeck that fall short of their funding goals. DropDeck will use
its own resources to evaluate these companies, and will also co-fund together with other
funders in order for them to be assured DropDeck also has its skin in the game.
As the cryptocurrency ecosystem evolves in the coming year, there is no doubt that DDD tokens
will be easily traded and spent by both the funders and the funded companies.
● DropDeck has plans to get DDD listed on major exchanges with help from our advisors.
● It will be possible to integrate through APIs with Monaco Card and TenX Card, which can
be topped up with ERC tokens, such as DDD.
● Companies funded in DDD will have access to more and more online service providers
which accept payment in cryptocurrencies as more advanced and user friendly
cryptocurrency payment gateways become more available.
32
Funds raised during the TGE will be used solely for the development and benefit of the
DropDeck Ecosystem. DropDeck is the first ever funding platforms to prioritize scalability and
sustainability in business funding, and capitalize on the synergy between A.I. and blockchain
implementations, and should be considered an R&D project involving bleeding-edge protocols.
Product development includes improving the end-user experience, ease of inputting data,
building the A.I. engines, and creating smart contracts. The budget is spent on hiring full stack
developers, A.I. researchers, data scientists, smart contract engineers, financial specialists, risk
analysts, marketing managers, security specialists, etc. and building the technological
infrastructure.
Since we posted our jobs on AngelList, we have received more than 300 applications as of
August 30, 2017. Depending on the demography of the applicant pool following our serious
hiring campaigns, we will decide to form a Product team in Singapore, Switzerland, Silicon
Valley, or Shenzhen with approximately 10-20 engineers.
The marketing budget is not significant compared to the target number of customers we intend
to acquire. The key source of new customers is going to be word-of-mouth, as the product gives
users a very strong commercial incentive to invite others. There are natural network effects built
into the product which will lower the average customer acquisition cost (CAC) substantially.
Before DropDeck reaches the critical mass and the incentive ecosystem is in full power to
significantly reduce CAC and bring our business development efforts strictly online, it's still
essential to spend on spreading words about DropDeck as widely as possible and conducting
physical business development processes with customers and partners in each foreign country.
Compliance is key to the long term success of the DropDeck Ecosystem, and our budget
allocated to legal costs ensures that we fit within regulatory parameters in any new markets we
enter. There is a substantial cost associated with integrating all of those partners, acquiring all
the necessary licenses across multiple jurisdictions, building out compliance teams, legal fees
and general technical architecture setup.
To ensure that day-to-day operations continue running smoothly as the organization expands, a
greater focus will be placed upon processes, and the hiring of additional operations managers.
DropDeck has been under development for 8 months starting at the beginning of January 2017.
Since then there have been multiple iterations of the business model, A.I. models, and user
experience of DropDeck. Our principle is each implement should feed to, support, lay the
foundation for, lend its impact to the next implementations. Some specific strategies are:
a) The DDD token sale helps us acquire funders, who are token holders. This jumpstarts
the whole holy positive feedback loop. This initial amount of funders should attract an
exponential amount of fundraisers (fundraising companies) onto DropDeck.
b) Since funders would be already on the platform, fundraisers would be attracted next and
we would focus on creating premium features to serve fundraisers first, who are the very
reason that funders join in the first place.
c) There are many premium features that are planned and have been validated, but we will
roll them out one by one, not all at once. At each step, we would survey token holders,
who can vote for features they want the most. By building features that token holders
want the most, we can put resources to optimal use and serve token holders better at
the same time. The subscription price for these features would increase accordingly.
d) There will be a lot of functionalities being planned, but only TWO at max will be
developed at the same time in order to guarantee our focus and product quality.
e) Our principle is each implementation should feed to, support, lay the foundation for, lend
its impact to the next implementation.
f) It's difficult and disadvantageous to pursue big data partners (big banks, Apple, Google,
Facebook, Amazon, AngelList, Crunchbase, MatterMark, etc.) right from the beginning,
so we must pursue small data partners first, who have data with higher resolution on
regional scale.
g) Even though more revenue will come from lending than contribution in the long run,
“Lending with DDD” will be launched after “Contributing with DDD" for the following
reasons:
i) Contributing to the most innovative and thriving companies without seriously
expecting a return has been part of the ideology of the cryptocurrency
community, evidenced by the adoption of TheDAO and DASH. We want to offer
that opportunity to the community ASAP, while minimizing the risk of contributing
to the wrong companies with our technologies and ideas.
ii) In order to calculate and propose accurate interest rates of borrowers for lenders,
to minimize default rate and protect the benefits of lenders, it requires a higher
level of precision and much more data, which takes more time to accumulate.
iii) After the token sale, DDD price may fluctuate more than expected, rendering
DDD not suitable for lending yet. “Lending with DDD” should be launched when
its price and the public expectation of DropDeck have stabilized, or solutions
such as stablecoin GDD, “ignore rate", “buy option", or “pawn token" is ready.
34
35
We have a short operating history and a new business model, which makes it difficult to
evaluate with accuracy our prospects and future financial results. Despite the risks and
uncertainties frequently encountered by companies in rapidly evolving markets, we are offering
a likely scenario to help those participating in the TGE to anticipate different levers and possible
outcomes for the project.
Our revenue will include the following recurring and nonrecurring streams:
DropDeck intends to add additional recurring revenue streams according to the roadmap chart
above within the next 30 months.
Additionally, we will partner with innovative legal companies and data partners around the world
to provide customers with the best services and most accurate scores.
Since January 2017, Ethereum and the Token market have grown at a value-weighted average
of about 300,000% annually (or 6.7x per three months). We do not believe this growth rate will
continue over the next five years. We have therefore taken a range of growth from 40% to 100%
per year as our range for
projections. For each scenario,
we also assume that the
Ethereum economy grows - by
around 5% monthly for the
next 5 years, which equates to
around a 60% annual growth in
assets backing DDD. Our
revenue forecast is as follows
and subject to an exponential
learning curve after 3 years
when the product is almost
fully developed:
36
The future plans for the DropDeck Ecosystem extends far beyond our incentive mechanism. Our
principle is to make the DDD token redeemable for goods and services within a partnered
network of retailers, DApps, and other participants associated with DropDeck. The team aims to
be proactive in scouting synergetic projects that share the same values of funding innovation. In
forming more partnerships, we also collect more diversified data to refine our A.I. algorithms.
Integration and partnership with other DApps: Status, Civic, Monaco, TenX, Gnosis, Augur, etc.
Customers will be allowed to top-up their Monaco Card or TenX Card with DDD. DropDeck will
depend on uPort for KYC/AML requirements where required, as a completely optional step, for
users who wish to interact with regulated financial tools and DApps within the application.
Oraclize will be an external oracle provider to be integrated into DropDeck. Oraclize aims to be
the privileged data gateway between blockchain protocols and the world wide web. Oraclize’s
main goal is to provide a way for smart contracts to break free of their constraints and provide
them with the ability to access all the data they need from the web without compromising their
trustless nature.
DDD tokens are functional utility tokens within the DDD platform. DDD tokens are not securities.
DDD tokens are non-refundable. DDD tokens are not for speculative investment. No promises of
future performance or value are or will be made with respect to DDD, including no promise of
inherent value, no promise of continuing payments, and no guarantee that DDD will hold any
particular value. DDD tokens are not participation in the Company and DDD tokens hold no
rights in said company. DDD tokens are sold as a functional good and all proceeds received by
Company may be spent freely by Company absent any conditions. DDD tokens are intended for
experts in dealing with cryptographic tokens and blockchain-based software systems.
When funding a company, the funder sends DDD to a smart contract - not receive DDD in
return. Other participants in the incentive ecosystem are incentivized to make sure the funded
company sends back DDD to a smart contract, which distributes DDD to all involved participants
including the funder. Therefore, funders are entitled to rewards by involvement in a smart
contract, not by holding DDD. In order to get rewarded, a funder’s work includes filtering
companies, inviting trusted people to cast evaluation, building a Trust Circle to see more
curated evaluation results, building reputation to attract private deals and to be added others'
Trust Circle, voting on several occasions during the funding process to ensure its success, etc.
The Overall Risk Score (likelihood of being security) of DDD is 10 (unlikely)23.
Due to our aspirations for what DropDeck may one day become, the DropDeck Core Team have
exercised legal diligence in the lead-up to our token sale, involving consultation with our
advisors, and legal experts in Singapore, Switzerland, China, and more.
Due to the retrospective nature of regulatory action, the DropDeck team can make no
guarantees regarding the legality of the platform or launch in any given jurisdiction. Regardless,
we are confident in, and proud of, the work we have done to shape DropDeck into what we
23
docs.google.com/spreadsheets/d/1D4iD_u7t3QBaUts77RbHHs6itSILyrhaO13wkOBs0bs
37
hope is a model of regulatory compliance for decentralized applications and token sale. We will
be responsive and collaborative with any regulators as necessary going forward.
Additionally, in response to SEC's conclusion on Ethereum tokens24, we have remodeled our
business concepts and disclaim that we do not promise return, while maintaining the benefits for
token holders. Specifically, we can shift the "rights to return" of funders to the "rights to
commission" of intermediaries so that intermediaries must benefit funders in order to earn
commission. Contributors may or may not get rewarded a result of the rules coded in smart
contracts that drive other people in the ecosystem to make the funded companies give back to
the ecosystem. So, in effect, there is no promise of a return, rather incentivization for people to
work towards rewarding all participants in the ecosystem in order to grow it stronger.
13. APPENDIXES
While trustworthiness is a broad and subjective concept, we can quantitatively describe it in
terms of observable behaviors. In particular, we look for signals that exhibit signs of cheat,
spam, doubt, uncertainty, hesitation, rhetoric, contrivance, impulsivity, thoughtlessness,
contradiction, etc. which correspond to a low Trust score and, on the opposite, signs of
decisiveness, conciseness, consistency, etc. which correspond to a high Trust score. In our
definition, one’s Trust score is a predictive score that measures one's probability to make
or back claims that would be true or accurate above a certain threshold.
Personalized recommendations for investors, entrepreneurs, and service agencies would be
derived from users' Trust scores generated using machine learning models trained with 1000+
features. These features also incorporate factors that provide a proxy for real world or offline
trustworthiness such as the ability to attract information (and resources) from other people. For
example, the most trustworthy venture capitalists usually get connected to the best deals
by entrepreneurs and other investors who trust them.
1) information propagated by that person has a high accuracy or probability of being true of
accurate
2) it's more likely for people to share information with that person
● Absolute TS (ATS - indicates user's objective level of trustworthiness), incorporates:
○ Permanent TS (based on personal information, behaviors that indicate long
lasting traits)
24
sec.gov/news/press-release/2017-131
38
○ Dynamic TS (based on behaviors that indicate temporary traits within 90 days)
○ Scalable TS (based on variables that scale with the number of selected “Dow
Jones decks”)
○ Attractive TS (based on user A's ability to attract information)
● Relative TS (RTS - indicates your subjective level of trust placed in user A)25
incorporates:
○ Conversational TS (based on conversations between you and user A)
○ Propagational TS (based on your acts of propagating user A's information or
sending information to user A)
User A also has many Topical TSs (TTSs) each of which indicates user A's trustworthiness or
expertise level on one of many predefined topics (e.g. industries, funding stages, locations).
To generate one's TTS on a topic, we must predict one's expertise level on that topic, based on
one’s biography texts from DropDeck, Twitter, Quora, and tuple (Company name, Job title) from
Linkedin and AngelList. We use multi-class classification, with each class being a bucket on the
expertise spectrum. We use learning models such as logistic regression, random forests, and
gradient boosted decision trees; features such as n-grams, list of named entities, cosine
similarity between topic name and biography text. Training data sources include hand labeled
data and label propagation. After generating a TTS for every topic for each user, we can further
refine them with the following insight: since trust in expertise is transitive (A→B, B→C, then
A→C), it propagates through the network.Therefore, we create a graph where each node is a
user and its TTSs, each edge is a user-trusts-user relationship weighted with the value which
the trustor has assigned to the trustee. Then we apply graph algorithms like PageRank to
update all TTSs at each node.
13.1.3. Pipeline
When a user registers on goDropDeck.com, he associates his identities on different social
networks with his DropDeck profile. For Twitter, public data is collected via the Mention Stream,
and data for other social networks is collected via REST APIs on the user’s behalf, based on the
granted permissions. All collected data is parsed and normalized to protocol buffers that encode
user interactions, graph, and profile information. Data is continuously collected from interactions
in a trailing window of 90 days using Django, Celery, Redis, etc. The collected data is written out
to a distributed file system. The batch processing pipeline derives features for each user,
normalized against the global population. Feature weights from the reinforcement models built
using ground truth data are then applied to generate scores.
Because the system was built to be extensible and flexible, the Trust score will evolve to
improve granularity and incorporate new sources of information, growing more accurate over
25
Measuring Behavioral Trust in Social Networks
39
time. Since a user’s online persona typically spans multiple social and professional networks,
the Trust scoring engine must be able to scale across these different networks to unify the
available information for a user.
1) Phase 1: generate a Trust score for each user on our platform as a reference of
trustworthiness for investors and entrepreneurs to choose the right partners.
2) Phase 2: generate a Potential score for each deck on our platform as a reference of
evaluation results for investors to fund the highest potential companies.
3) Phase 3: recommend potential, suitable startups and investors to each other.
5) Phase 5: integrate with other technologies and systems to apply our trust scoring engine
to businesses in other domains and refine our own results.
6) Phase 6: create an interface for businesses to integrate with our engine on demand.
A.I. technologies are used in order to increase the degree of convenience, speed, and accuracy
of our scoring engine and recommendation system, which will be used to optimize the decision
making process in venture investment. Our technology of choice is deep reinforcement learning.
We use ElasticSearch as a search engine for indexing, search, and quick analytics. Languages
and frameworks include Python, Scikit-learn, TensorFlow, Theano, and Keras. Learning models
include recurrent, convolutional neural networks for text classification, recurrent Neural
Networks for time series analysis, and deep Boltzmann Machines for recommendation system.
13.1.6. Validation
In order to evaluate success, we have to validate that users with higher Trust scores are able to
predict good investments more accurately and attract more information in a network. Then, we
compare the performance of the score against other scoring/ranking systems and also analyze
the dynamic nature of the score. We examine different topical domains and find that
highly-trustworthy users are correctly identified within these domains through their high scores.
Below, we examine the Trust Score from 5 different aspects to illustrate its correctness and
usefulness.
Each user can evaluate favorably (“Approve") or unfavorably (“Deny") a claim. For each deck,
we divide users who have evaluated its claims into those with high Trust scores (for example,
above 80%) or “High group” and those with low ones or “Low group.” We aggregate evaluations
(weighted by each evaluator's Trust score) by High group to obtain a High score and those by
Low group to obtain a Low score. In parallel, we allow entrepreneurs to report their verified
achievements (investment, admission to incubators or accelerators, won prizes, etc.) and build a
40
learning model to score them (in the same way as generating TTS) and generate a Success
score for each deck.
After one year, we run an experiment: for each deck, we compare its High score (HS) and its
Low score (LS) to its Success score (SS). A higher similarity between the HS and the SS than
that between LS and SS would indicate a higher accuracy of judgement by users with high Trust
scores.
To validate the effectiveness of the Trust score, we will run an experiment to measure the
attraction of information with respect to the user scores. Users with varied Trust scores will be
targeted with perks, which are premium data that can only be claimed under a condition - the
users will be required to send the perks to at least one other user, so that both can claim the
perks. A higher number of perks received indicates a greater attraction of information.
Real-World Rankings: We can compare the Topical Trust score with other rankings that indicate
trustworthiness, such as Quora's topical rankings for top viewed writers on venture capital26. To
measure the ranking quality of TTS, we adopt the normalized Discounted Cumulative Gain
(nDCG) metric, defined in Eq. 4. The Discounted Cumulative Gain upto position p (DCGp) is
calculated as in Eq.5, and the ideal DCG for p is denoted by IDCGp.
p
DCGp (2reli − 1)
nDCGp = IDCGp (4) DCGp = ∑ log 2 (i+1) (5)
i=1
We calculate the IDCGp by using the Quora’s topical rankings as the ideal ordering of users.
We set the relevance rel of a person as p/ rank ideal , where the rank ideal is his/her position in the
ideal ranking. With this setting, a high nDCG, for example p = 10 (higher than 0.7), would
demonstrate that the TTS is able to capture online reputation to a high degree for these
examples.
Since trust is typically contextual, we explore the effectiveness of the Trust score across
different topical domains. Users in topical domains are ranked by their TTSs within their
respective domains. After one year, we will take note of rankings in a few selected topics such
as Fintech, Healthcare, and Robotics. For a topic such as robotics, we should see, for example,
that Elon Musk (founder of Tesla) has a higher TTS than Evan Spiegel (founder of Snapchat) in
order to validate that TTS can correctly identify the reputed figures in a variety of domains.
Every day, for each user, we recommend 5 ranked trustworthy people, and record which of
them would be added in which order after 24 hours. In the order of the ranking, at every user we
compute the precision (the number of added users up to and including that user, divided by the
total number of users up to that user), and then take the average (AP score). Then we calculate
26
Most Viewed Writers in Venture Capital
41
the Mean Average Precision (MAP) across all AP scores for all queries. We check whether our
MAP is higher than 0.5.
13.2.1. Scalability
For us to realize benefits from blockchain, the blockchain would need to function as an
access-control manager for score evidence records and data. The information contained in
blockchain would be an index, a list of all the score verification data. The index is similar to a
card catalog in a library. The card catalog contains metadata about the book and a location
where the book can be found. The score verification blockchain would work the same way.
Transactions in the blocks would contain a user’s unique identifier, an encrypted link to the
score verification record and a timestamp for when the transaction was created.
To improve data access efficiency, the transaction would contain the type of data contained in
the score verification and any other metadata that would facilitate frequently used queries (the
metadata could be added as tags). The score verification blockchain would contain a complete
indexed history of all score verification data, including all data collected on DropDeck platform or
crawled from corners of the Internet.
All score verification data would be stored off blockchain in a data repository called a d
ata lake.
Data lakes are highly scalable and can store a wide variety of data, from images to documents
to keyvalue stores. Data lakes would be valuable tools for research and would be used for a
variety of analysis including mining for factors that predict outcomes. Data lakes support
interactive queries, text mining, text analytics and machine learning. All information stored in the
data lake would be encrypted and digitally signed to ensure privacy and authenticity of the
information.
When the DropDeck system creates a new score component for a user or company, a digital
signature would be created to verify authenticity of the document or image. The score
verification data would be encrypted and sent to the data lake for storage. Every time
information is saved to the data lake a pointer to the score verification record is registered in the
blockchain along with the user’s unique identifier. The entity is notified that score verification
data was added to his blockchain.
A user (individual or representing a company) would have full access to his data and control
over how his data would be shared. DropDeck web interface would allow the user to grant
permission to access his data (by Trusting). The user would also be able to view an audit log of
who accessed his blockchain, including when and what data was accessed.
After a Trusted user is granted access to a user’s score verification information, they can query
the blockchain for the user’s data and utilize the digital signature to verify the scores.
42
Score verification would follow the best practices established by financial institutions and
regulators. Given this model, the user has singular control over his data and the power to grant
access to specific entities (funders, Delegates, etc.) for communication and collaboration in
funding. The decentralized nature of the blockchain combined with digitally signed transactions
ensures that an adversary cannot pose as the user or corrupt the network as that would imply
the adversary forged a digital signature or gained control over the majority of the network’s
resources. Similarly, an adversary would not be able to learn anything from the shared public
ledger as only hashed pointers and encrypted information would be contained within the
transactions.
Contributor (funder) x
Hunter x
Evaluator x x
Referrer x x
Lender (funder) x
Backer x
Insurer x
Delegate x x
1) Trust: When a user clicks "Trust" on one's profile and assigns a trust index to that person, the
user will:
43
● Allow that person to see the user’s evaluation to any claim
● Incorporate that person's evaluation into the evaluation bar of any claim the user sees
and into the D-rankings of decks on your Home page
● When a user creates a deck, the user can set the Funding deadline.
● When the deck is published (the user clicks on "Publish" and the admin approves), if
the "Funding deadline" is not set yet, it will be automatically set to 99 days after that
point in time.
● When a user wants to Clear or Edit your Funding deadline, the user must provide an
explanation and convincing rationale to be approved by the admin.
● If the user clears the funding deadline, all pot money in your claims will be returned to
evaluators.
● If the user edits the funding deadline, all evaluators will be notified.
● A fixed amount of time (e.g. 1 week) before the funding deadline or when the user
lets the admin know about the funding outcome (the user clicks on "Report outcome"
and sends evidence for the admin to approve), no one can further evaluate on the
deck (evaluation is locked for the deck) and the user cannot clear/edit the funding
deadline.
● When a user reports a successful funding event, it must meet a few requirements to
be legitimate, e.g. the amount of funding must exceed or be equal to $10,000.
● The funding deadline can be the result of an announcement date of a competition,
incubator, accelerator, or other funding program.
3) Evaluation:
● When a user evaluates the Top Claim ("the user should invest in [company name]"),
the user wagers an amount of DDD, which is added the pot value of the Top Claim.
When a user changes the evaluation, the user wagers an additional and equal
amount of DDD, which is also added to the pot value.
● When a user evaluate a child claim (any claim other than the Top Claim) or change
your evaluation, the user wagers an amount of DDD, which is added the pot value of
that claim.
● When you evaluate the Top Claim correctly (e.g. you "Approve" it and then that deck
succeeds in fundraising) then:
44
a) the user gets a share of the pot value of the Top Claim (divided equally among
correct evaluators).
b) the user gets your wager in all child claims back (no loss).
● When a user evaluates the Top Claim incorrectly (e.g. you "Approve" it and then that
deck fails in fundraising) then
a) the user loses their wager in the Top Claim
b) the user gets a share of the pot value of the claims that the user evaluates
opposite to your Top Claim evaluation (e.g. you "Approve" the Top Claim but
"Deny" a child claim).
● If a user does not evaluate the Top Claim then all the wagers in child claims will be
returned to you.
● Each user's evaluation data is used in calculating one or many components in one of
many Trust and Potential scores. When a user pays in DDD to look inside one of
these components that include your evaluation data, the user claims a percentage of
that payment, which is instantly processed by a smart contract.
4) Hunting:
● The first person who publishes a deck (click "Publish" and is approved by the admin)
will become the "Hunter" of that deck.
● If there are duplicate decks, or if the real owner of the company reports a deck (and
shows evidence), the admin will contact the deck's creators to resolve the dispute and
delete the less legitimate ones.
● The Hunter of a deck gets a share (e.g. 1%) of all pot value won in that deck for a
fixed amount of time (e.g. 2 years).
● The owner of the company can claim their deck (click "Claim deck", submit evidence,
and get approved by the admin) and request to remove the Hunter's deck
permissions.
● If the Hunter misbehaves or abuses the deck permissions, Founders can submit
evidence to remove the Hunter.
5) Delegate: Each funder before funding a company must approve a local Delegate who will:
● Be authorized to make sure that the funded pay an accurate amount.
● Handle or assist both the funders and the funded in all legal processes per request.
● Receive payment or a share of the reward or interest.
45
13.3.2. Rationale
1) Trust:
● This compels each person to really pick the people he/she trusts.
● You can hide your evaluation from the people you do not trust.
● There is always a goal for the deck owner to achieve.
● There is always a date to conclude the result of a bet, compelling people to wager.
● If you indefinitely evaluate a claim of a deck and there's no "result date" then it is hard
and even nonsensical to evaluate. But if there's a result date to look forward to, so
that an "Approve" means "Yes this is valid or this company's gonna make it by this
date!" and a "Deny" means otherwise, then it is easy to determine an evaluation.
● We incentivize the deck owner to report the outcome to us as soon as possible, and
NOT to inform evaluators to change their evaluation to win the pot value. If he
succeeds in fundraising and fails to report, his Approvers will probably blame him for
their loss (and probably cease to support him). If he succeeds, there's no reason to
inform/help those who "Deny" him. If fails to raise fund, there's little reason to
inform/help those who "Approve" him because it harms his deck's rating and may
affect future funding campaigns.
3) Evaluation:
● We compel users to evaluate BOTH the Top Claim and child claims correctly.
● For the Top Claim, a user must evaluate based on whether the user really thinks the
company can raise funds or not, so that the user can get rewarded.
● Besides, even if a user believes in the Top Claim evaluation (e.g. the user "Approve"
and really thinks this company can raise fund), the user can also think differently
about a child claim and evaluate opposite to the Top Claim (e.g. the user "Approve"
the Top Claim, but think the product of the company is not strong yet, so the user
"Denies" the [Product] claim) and STILL gets rewarded for that honest evaluation.
● So, even if a user evaluates the Top Claim incorrectly, the user can still get rewarded
for every child claim that the user has evaluated honestly. That means, the user can
HEDGE a Top Claim evaluation by evaluating child claims honestly.
4) Hunting: Similar to hunters on Product Hunt, hunters on DropDeck will go out and hunt down
the highest potential companies even before their founders think of fundraising themselves.
5) Delegate: This should be a respected figure that serves as the only offline link between the
funder and the funded. The Delegate may advise the funded or assist the funder when needed.
46
13.3.3. Incentives
I) For entrepreneur: In order to improve the rating of the deck, the entrepreneur must invite all
supporters and related users to evaluate different aspects of the entrepreneur’s company.
II) For funders: In order to see accurate deck ranking and evaluation (free of bias from
spammers), the investor must invite or add the right (trustworthy) people into your Trust Circle
and rate each person's trustworthiness as accurately as possible.
III) For funders: Also, in order to see more people's evaluation on a deck, a funder must improve
the credibility to be Trusted or invite that person to add you to their Trust circle, by behaving
properly and evaluating decks honestly over time on our platform.
IV) For evaluators: In order to be rewarded with money, a user can evaluate, vote and
contribute data in many ways. When someone pays to view data attributed to the scores
calculated on our platform, all evaluators who contribute such data will be rewarded instantly.
The more accurate the evaluation is, the more successful the funders will become, and the
more DDD evaluators can earn in the long term.
V) For evaluators: In order to win a pot money on whether a deck would be invested or not by a
certain deadline, a user must predict and evaluate that deck honestly. When a user evaluates,
vote and contribute data in many ways, the user must chip in a certain amount of DDD (which is
slightly replenished every day but capped). The final decision of investment belongs to the real
investors. Those who make the right bet (invest/not invest) get a share of the the pot money.
VI) For evaluators: In order to hedge the risk of evaluating the Top Claim incorrectly, the user
must evaluate the child claims correctly.
VII) For Hunters: In order to get rewarded for finding a cool investments, a Hunter goes out and
looks for potential companies and present their information in the most exciting way to put on
DropDeck. Also, within the hunter reward period, the Hunter must attract as many investors and
trustworthy evaluators to your deck as possible.
VIII) For Delegates: In order to get a share of an investor's profit, the Delegate must do
everything within capabilities to make sure the contributee/borrower pays back a correct amount
(instead of an amount lower than per specified in the terms). In order to have a reputation and
attract more funders and funded companies as clients in the future, the Delegate must
collaborate in the best interests of both parties instead colluding with one of them.
A buyback program will be performed in a predetermined manner as follows:
1. 50% of all profit in ETH accrued in DDD smart contract will be used to purchase DDD in a 90
day period.
3. All token repurchases will be performed on open markets.
47
4. DDD tokens will be repurchased at a price that does not exceed the highest independent bid
or the last quoted transaction price. This should not inflate the market price and rather serves as
a price support.
5. Purchase volume should never reach more than 20% of total DDD volume traded in the last
24 hours.
6. All tokens purchased will be added to DropDeck Reserve and locked for 1
2 months.
7. DropDeck will not buy back more than 10% of all tokens in circulation. If the amount of fund
allocated to buy back tokens remains after buying 10% of all tokens in circulation, then
remaining fund will be converted to USD/EUR/CHF to be distributed to the Company's stock
holders.
8. DropDeck will disclose its DDD purchases i.e. total number of tokens purchased and the
average price paid per token in a quarterly report.
a) Buyback: DropDeck's earnings will accrue in the DDD smart contract, a share of which is
used to buy back DDD tokens on exchanges, effectively increasing the token net worth
of all DDD holders. For more details, please refer to the A
ppendix.
b) Reputation: Funding innovative and thriving companies on DropDeck improves your and
all of your associated entities' scores, improves your global ranking to attract more and
better entities (entrepreneurs, investors, employees, service providers, etc.), grants your
access to private information, and increases your limits on DropDeck services.
c) Escrow: DropDeck optionally holds your tokens until all smart contract requirements are
met.
d) Evaluate: when someone evaluates, token is subtracted from that person's wallet and
accrued in a smart contract.
e) Reward based on evaluation: Tokens accrued in smart contract are distributed to correct
evaluators after funding evidence is approved before funding deadline (similar to
prediction markets such as Augur/Gnosis)
f) Other roles: Other users on the platforms can join various roles to support
investors/companies and rewarded along the way. E.g. a "Hunter" is immediately
rewarded when the company that person hunted as been successfully funded.
g) Score verification: When someone pays for data contributed by evaluators, these
evaluators get rewarded immediately.
h) Investment (crowdfunding): Investors can contribute part of the investment amount or
pay a buyout price to invest in a company
i) Verifying evidence of funding: Whenever a company submits its funding evidence, a
panel will be selected to vote for the validity of that evidence.
48
k) Approving Delegates: The funder(s) and funded company approve a proposal of terms
and the according Delegate to carry out those terms.
l) Others: Approving each installment of contribution, approve deck deletion, feature
voting, etc.
The token sold during the token sale is known as the Decentralized DropDeck Token (DDD).
This is the only time these tokens can be created, and therefore the total supply of DDD is fixed.
Fees will be charged to participants for services such as premium features and score
verification. These fees will initially be denominated in ETH and DDD. DropDeck seeks to not
only create interesting software, but also a community of those interested in fostering innovation
through funding companies on DropDeck. To do this, we needed to create a model that lowers
the barrier to entry for repeat users (e.g. having to pay ETH or DDD repeatedly).
GoDropDeck (GDD) can be used to pay fees for services or subsidize the fees of other
participants. GDD will be pegged to $1 USD worth of fees. In this way, GDD acts as a coupon
for $1 of use within DropDeck.
DDD tokens are the generator for GDD creation. GDD can only be created via activating the
utility of the DDD tokens. This is done via a smart contract system. The smart contract works as
follows: DDD token holders agree to “lock” their tokens in a smart contract (30-365 days). A
multiplier is added for longer lock durations. The smart contract determines the user selected
lock duration and applies that duration to a formula that is designed to regulate the supply of
GDD tokens currently in use. Prior to locking their DDD tokens in the smart contract, users will
be able to see exactly how many GDD they will receive as a result of executing the smart
contract. Once users execute the contract, 30% of their GDD will be distributed for immediate
use, and the remaining 70% will be distributed proportionally over the locked duration. Once the
lock duration expires, the locked DDD ceases to generate GDD and the DDD becomes freely
transferable by the holder. There is no limit (other than duration) for how many times DDD
tokens may be used to create GDD.
Problems between startups and funders in finding and evaluating each other cost them billions
of dollars, part of which DropDeck can save for them and turn into revenue. The addressable
market size is roughly $33 billion. Please refer to more details below:
Startups' expenses on deck building & finding investors: $4 billion
Investors' expenses on startup discovery & screening: $1 billion
Time spent on discovery & screening: $2.4 billion (dollar equivalent)
Time wasted on losers: $1.9 billion (dollar equivalent)
49
Besides “Contributing with DDD,” the option for “Lending with DDD" will allow companies to
instantly raise a needed amount of money without waiting for installments, and allow funders to
lend money to earn monthly interest. The addressable market of SME alternative lending is
worth $284 billion.27
Regarding Asian Top 7 financing deals in 2016, capital invested in 7 companies accounts for
78% of all invested capital in Asia ($7,6B =78%). Data from Life.SREDA’s Money Of The Future
2016-17 report is as follows:
APPLY
DATA FUNDING SCORING
*
Crunchbase o
Mattermark o o
CBInsights o o
PitchBook o
AngelList o o
Funderbeam o o o
CrowdCube o
Seedrs o
SyndicateRoom o
FundersClub o
CircleUp o
Seedinvest o
Bnktothefuture o
DealMatrix o o
27
Peter Renton, “Global Overview of Online Lending,” presented at 2016 Lend Academy, SF, US.
50
OddUp o o
F6S o
Gust o
Venture360 o
DROPDECK o o o o
*refers to functions that allow startups to apply to startup programs, competitions
RISK FACTORS
Regulatory risks
The regulation of tokens such as the DDD tokens is still in a very nascent stage of development in
Singapore. A high degree of uncertainty as to how tokens and token-related activities are to be treated
exists. The applicable legal and regulatory framework may change subsequent to the date of issuance
of this White Paper. Such change may be very rapid and it is not possible to anticipate with any degree
of certainty the nature of such regulatory evolution. DropDeck does not, in any way, represent that the
regulatory status of the DDD tokens will remain unaffected by any regulatory changes that arise at any
point in time before, during, and after this offering.
Tax risks
The tax characterization of DDD tokens is unclear. Accordingly, the tax treatment to which they will be
subject is uncertain. All persons who wish to receive DDD tokens should seek independent tax advice
prior to deciding whether to receive any DDD tokens. DropDeck does not make any representation as
to whether any tax consequences may arise from purchasing or holding DDD tokens.
53