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**chocolate **litepaper **🍫 **

“Building a safer Web 3.0 future for all.”

TABLE OF CONTENTS

chocolate 🍫

An anti-scam reviews platform powered by the community and blockchain technology.

Chocolate is a reviews-based blockchain platform that aims to combat scam in crypto. The platform integrates three sources of trust to provide a robust and impartial review system for crypto projects through community feedback, machine learning, and substrate-based blockchain technology. Users can submit reviews for crypto projects on the Chocolate platform, similar to Amazon customer reviews. They are rewarded with CHOC, the platform’s native token, for their contributions, and must collateralise assets to submit reviews, ensuring user accountability. Projects receive “Chocolate Trust Scores” based on an aggregation of these reviews, which are awarded in the form of “Chocolate-verified badges”, akin to Twitter-verified account badges. These badges can be linked and featured on the projects’ websites, ICO pages, or DEX interfaces, etc. that the public could refer to just like TrustPilot scores, distinguishing trusted projects from unverified sites. Machine Learning algorithms screen out fake user accounts, bot reviews, and inappropriate content, and the substrate-based Chocolate blockchain infrastructure enables interoperability, forkless upgrades, a treasury, and DAO governance.

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INTRODUCTION

Problem

The crypto frontier is nascent and brimming with opportunity. However, by the same token, thieves and charlatans abound, leaving much to be desired about user safety and wallet security. For centuries, individuals have been forced to hand their assets over to trusted intermediaries like banks, so the concept of reassuming full self-custody of one’s assets may seem daunting initially.

Indeed, one of the largest obstacles to true scalability and mainstream adoption of cryptocurrency, and by extension, access to Web 3.0, is the ever-present risk of scams and the lack of avenues for recourse to justice. People are understandably wary of participating in a new technology, especially if it involves risking their hard-earned savings.

High-profile scams include Onecoin, a Ponzi scheme which made off with $25b in 2017, Bitconnect, an Initial Coin Offering (ICO) scam in 2016 which cost participants roughly $4b, Pincoin and iFan, which jointly scammed people out of $660m to $870m, and Bitclub Network, the biggest crypto-mining scam that brought in $722m by showing misleading videos of bitcoin mining equipment which they pretended to own, and guaranteeing their investors mining income.

As of June 2021, in the US alone, FTC data revealed approximately 7,000 reported cases of crypto investment scams, approximately ten times higher compared to October 2020, with a median reported loss of $1,900. In the UK, scams involving cryptocurrency investments rose 57% over 2020, with a total of 5,581 reports made. Investors lost a total of £113m to crypto scammers in 2020, up from £76.6m in 2019. True values are likely even higher as many cases go unreported and these are localised to specific geographies, whereas crypto scams are decentralised and take place on a global scale. Additionally, because individual scam amounts are small and authorities tend to ignore cases involving less than $100,000 in value, victims are left with little recourse to justice or incentive to go after fraudsters on their own.

Though the monetary value transferred from honest participants to malicious actors certainly illustrates the size of the problem, the real price of scamming must be considered as the cost of reduced and non-participation in the ecosystem as a result of undermined trust and confidence. For a system so reliant on network effects, this cost will be undeniably large.

On the retail side, one estimate from Bloomberg suggests that from 2019 to 2020, the number of crypto scam victims increased by 48% to roughly 7.3m people; almost the size of the population of Hong Kong. Even a small percentage of this number leaving the ecosystem and publicising it to their own networks destroys far more long-term value than the transfer of funds to scammers’ wallets. On the institutional side, a May 2021 survey commissioned by the Economist Intelligence Unit had ‘market trust and understanding of digital assets’ as the most common obstacle to institutional and corporate treasury adoption with 47% of the 3,000+ respondents highlighting it. On the regulatory side, bodies such as the SEC frequently cite scams and lack of trust as reasons to discourage participation and as justifications for stringent regulations to the effect of “you cannot protect consumers so we will have to”.

Types of Scams

Ranked from easiest to most difficult to eliminate.

  1. “Deep-fakes”: where scammers use imposter websites and social media handles that look like existing legitimate entities. Lowest hanging fruit. To address first.
    ** → Solve by checking directly with core teams via our ambassador networks, and with one-click transparency and **simple ML to direct people to legitimate sites and community members.
    `**

  2. Lack of knowledge: where victims are new to the ecosystem and do not understand Web 3.0 transactions. Low hanging fruit. To tackle next.
    → Solve with verification badge and Community Trust Consensus with little debate i.e. near-unanimous or majority consensus among community opinions. \

  3. Greed for Ponzi schemes: where victims are making less rational decisions for opportunities that are "too good to be true". Future implementation.
    → Solve with complex ML (to identify patterns in typical schemes) and Community Trust Consensus with moderate debate, i.e. there will be some disagreements in reviews and Code Audits. \

  4. Projects that fail and turn into rug pulls by circumstance (not initially designed to be scams). Future implementation.
    → Solve with verification badge with more subjectivity (might require community referendum) and a Community Trust Consensus mechanism.
    → In this case, there will be a lot of activity in the Community Trust Consensus mechanism, e.g. a lot of collateralized opinions. We aim to design the incentives to not punish well-intentioned users who are genuinely trying to help provide reviews on projects they have interacted with or have some knowledge on. Some projects will fail and then the team pulls the rug, to the disadvantage of the investors.

Imagine a safer world…

What if, for any entity you wish to transact with, you could verify their community trust ratings with a single click, have assurance from reputable leaders, and browse through honest reviews from the community with aligned incentives?

Solution

Enter: **chocolate**.
  • TrustPilot for Web 3.0 powered by the people, for the people
  • Instagram/Twitter-esque Verified “Chocolate Trust Badges” provide an easily recognisable and verifiable guarantee of authenticity and trustworthiness.
  • **A User-centric Experience **We built the platform around the user, so viewing and submitting reviews is easy, and users can get rewarded for their contributions.
  • One-Click Transparency We aim to add functionality to our verified badges that would allow users to easily review ICO wallet addresses, token smart contracts and transactions to verify the authenticity of the entity they transact with.
  • **Community Consensus on Trust ** An impartial platform facilitates an open community review process to uncover public opinion on projects and share feedback through genuine user reviews
  • A Pragmatic, Accountable Approach - Our aim is to reduce the overall amount of scams in the community without sacrificing accountability and transparency. No arbitrary decisions or black boxes. We strive to reward all genuine contributions and protect the interests of all well-intentioned community members.
  • Will the White Hats emerge triumphant over the Black Hats? Chocolate aims to tip the favour towards good actors :) 🧙🏼‍♂️

Focus for the Immediate Term

We aim to build out our minimum viable product as a first step. As alluded to above, scams present themselves in myriad forms, and we will target the lowest hanging fruit first: imposter websites that mimic the websites of legitimate high-profile projects, luring unsuspecting victims into transferring crypto assets through fake ICOs, crowd loans, and airdrops.

Our immediate goal is to combat scams in crypto, but in the long-run, we plan to work with corporations, banks, governments and other non-crypto organisations to provide a safe, decentralised solution for a future with fewer scams.

Our Mission

**
“To reduce scams and facilitate mainstream adoption of crypto by providing a safe and reliable ecosystem through chocolate.”**

CHOCOLATE’S INTEGRATED PLATFORM

alt_text

What is Chocolate? - Three Key Features

  1. A Community-Powered Reviews Platform

    1. Harnessing the power of the people: Users submit reviews on our website on whether they found a given project reliable or not based on their experiences—similar to Trustpilot, Amazon product reviews, AirBnB host ratings and Uber driver ratings
      1. Users may also be able to upvote or “like” other users’ reviews
    2. An overall review score is awarded to each project based on community reviews in the form of a “Chocolate 🍫 verified badge”—just like TrustPilot ratings found on many merchant websites—which could then be featured on the project’s crowdloan webpage, initial coin offering (ICO) pages, or decentralised exchange (DEX) platform interfaces, etc. 2. The "Chocolate Score" represents the legitimacy of a given project and may be used to help newer projects secure startup funding down the road 3. 🍫 badges pull data from IPFS, with a reference to it stored on chocolate’s blockchain, so they cannot be tampered with and are publicly viewable. 4. 🍫 badges could also double up as “one-click” buttons for users to verify receiving wallet addresses for ICOs and treasury fundings, or smart contracts for tokens and NFTs, on websites CoinGecko, block explorers like Etherscan and Subscan or exchanges like CoinGecko and Niftex, Singular and Rarible.
    3. Projects that have low trust scores may be identified on a watchlist, and a “heads-up” notification will pop-up upon entry into websites for projects which have been flagged. 5. The latter is a feature we plan to implement through integration with the polkadot.js web extension 6. We have received initial indications of interest for potential direct collaboration with Web3 Foundation.
    4. See: “Identifying the Community Consensus” below.

  2. Machine Learning 5. A scalable approach that augments user onboarding and user review screening capabilities, subject to human operator oversight 6. To verify that accounts are legitimate and weed out bot accounts 7. To authenticate reviews and isolate false claims, similar to TrustPilot user reviews, or the ML review process used for Amazon customer product reviews 8. Potential strategic collaboration with Phala Network 7. Machine Learning is computationally-intensive, so it is traditionally difficult to implement within the restrictions of blockchain infrastructure 8. TEE (Trusted Execution Environment) is a special computer processor component that preserves the confidentiality of code and data loaded within it. Phala Network combines the privacy of TEE with blockchain technology to form a secure and efficient distributed computing cloud, making it perfectly suited to ML applications in blockchain. 9. This could make it possible for Chocolate to leverage Machine Learning (ML) capabilities within a blockchain-native private cloud computing environment. 1. Specifically: a ML technology called “Federated Learning”, in which data and models are distributed over multiple machines. 10. We have direct connections with the Phala Network core team from our professional network and may establish a strategic partnership down the road. 9. See “Safety Features” below for further discussion.

  3. Substrate-Based Blockchain Technology 10. A token-based incentive system to align interests and encourage positive participation 11. Users can be rewarded in CHOC for their contributions, such as by contributing reviews to the platform, creating educational content for our wiki, producing community content, or even receiving it as gifts from other users for providing helpful reviews as a gesture of thanks and support 11. “Collateralisation” and “staking” systems concurrently align user incentives to act in the interests of the Chocolate ecosystem 12. An immutable and publicly verifiable ledger for projects’ reputational trust scores, user review data, user account track records, and potentially also token smart contract information 13. Leveraging the full potential of Polkadot’s technology, ecosystem and network effects 12. E.g. interoperability—to tap into the capabilities of other platforms like Phala Network for ML, Moonbeam Network for Ethereum/Solidity compatibility, Astar Network, etc. 13. Forkless Upgrades (future-proof infrastructure) 14. Shared security of the Polkadot proof-of-stake architecture 15. Substrate pallets, etc.

    + We may introduce code audits for project codebases as an additional layer of security. This would enable us to verify projects are doing what they claim to do. We have identified [https://rugdoc.io/](https://rugdoc.io/), [https://tokensniffer.com/](https://tokensniffer.com/), [https://rugseekers.online/](https://rugseekers.online/) as potential strategic partners for collaboration.

  4. An Easy-to-Use, User-Centric Interface and Experience 14. Clean, intuitive design 16. A user-friendly interface that embodies clean and intuitive design tenets, adopting best practices from leading crypto projects and traditional Big Tech incumbents, e.g. infinite scroll, search bar, UI/UX and brand considerations, accessibility, etc. 17. An easily-recognisable symbol of trust and reliability: the "chocolate verified badge", which serves 3 functions: 2. Awarded upon verification of projects, proving that they are the core team behind a project. Can be displayed on their websites, exchanges, and events page. 3. To show their average chocolate score, plus number of reviews under or next to the icon/badge. 4. One-click button to show the underlying wallet address (for ICOs) or smart contracts (for tokens). (A stretch goal.) 18. Friendly for non crypto-native users 19. Wide-ranging compatibility with multiple OSes (Mac, Windows, Linux, Chromebook), web browsers (Chrome, Brave, Mozilla, Safari), platforms (Mobile, Laptop, PCs), etc. 15. Highly compatible and accessible 20. Easy to download across a range of internet connections—useful for emerging market user base, e.g. Africa, SEA, LatAm, China where users are mobile-first with unstable internet connections 21. Simple to set up, so onboarding is smooth for first-time reviewers 22. Omnichannel distribution and deployment through: 5. Clean and easily-recognisable "Verified Badge", one-click verification / authentication process to reveal transaction, receiving wallet address, and
    6. Wallet / browser extensions like Polkadot.js and MetaMask, Norton AntiVirus, etc. 1. Leveraging existing infrastructure of Polkadot.js wallet extension makes it easier for scam alerts to notify users upon entry into known scam sites, protects against fake websites which link to other fake websites, and makes it technically more difficult for hackers to succeed as they must break through Polkadot’s own defenses to hijack the wallet extension. 23. Potential mobile-friendly user interface to complement desktop website to cater to a large portion of communities within emerging economies which “skipped” the desktop and went straight to smartphones 24. We also plan to include accessibility features for those who need visual / auditory accommodations, etc.

  5. A Decentralised Autonomous Organisation (DAO) 16. a.k.a. the Chocolate and Community Autonomous Organisation (CACAO) 17. Laying the groundwork for a treasury, self-sustaining scalability and development, community participation, and accrual of value to token holders

IDENTIFYING THE COMMUNITY CONSENSUS: USER REVIEWS

Review Submission Process

  1. See “User Flow Chart” below for an illustration of the process.
  2. Users connect a wallet and set up an account
    1. User accounts will have a wallet-linked profile on the chocolate platform
    2. This ensures accountability of reviews, while preserving anonymity if desired
    3. This also enables users to develop track records for the helpfulness of their reviews that are viewable by the public
    4. Users can also participate in a loyalty bonus scheme for continued positive contributions, including referrals, and enjoy bonus review rewards if they stake CHOC
  3. Users lock up a micro-deposit (collateralisation) 5. Their collateral will get slashed if the review is found to be inappropriate (e.g. discriminatory remarks, hate speech, submit profanities, NSFW content, spam, gibberish, etc.) and the user commits repeat offenses 6. For the testnet, we will use the CHOC token for code simplicity, but the plan for mainnet is to use an external token that is non-native to the chocolate ecosystem. 7. See “Safety Features” below for the rationale.
  4. Users lookup projects on the chocolate platform and submit reviews 8. See below for the "Verification of Reviews"
  5. Verified reviews are awarded CHOC tokens [“carrot”], and the collateral is released back to the original wallets 9. Project profiles that have yet to be listed on chocolate may be created by users, and they may also be rewarded with CHOC for their contributions 10. Users who submit inappropriate reviews are put on notice [“stick”] 1. Principle of Proportionality applies—to ensure a fair penalty system 2. This extends the benefit of doubt in case of well-intentioned reviewers who make genuine mistakes, and we implement a 3. “Sliding scale of severity” for repeat (or serious) offenders acts as an effective deterrent for bad behaviour

CHOCOLATE USER FLOW

alt_text

TRUST & IMPARTIALITY

  1. Chocolate is an impartial and neutral platform that facilitates the discovery of the community consensus about how much a given project is trusted by the public, similar to how Trustpilot works for traditional businesses. While we may implement code audits1 down the road, our core purpose is not to arbitrate between whether projects are legitimate or scams. Instead, we empower users with the tools and platform to provide their collective feedback on their experiences and interactions with those projects.

    1. For example, Chocolate will not assert subjective claims like “This project is legit.” or “This project is a scam.”, but instead state neutral and objective facts like “This project is trusted by 140m users who have collectively awarded it a Gold Chocolate Trust Rating of 3.9/4.0”.

  2. The ideal scenario would be to prevent scams from happening in the first place, but this usually involves very manual code audits which are not scalable as they are time-intensive and costly. 2. Furthermore, there is no guarantee that a white hat hacker would always be able to detect a scam if a technically more-competent black hat hacker were able to bury their motives sufficiently deeply within the smart contracts.

  3. Secondly, as we are rewarding and punishing users with real financial value, the stakes are much higher. So if we wrongly label a legitimate project as a scam or vice versa, it would be very difficult to make amends retroactively. Additionally, we would be setting ourselves up for failure as it would only take one mistake to end Chocolate’s reputation, which is more than likely to happen if we review hundreds of projects.

  4. Moreover, how do we protect well-intentioned users who submit reviews that they genuinely believe are true, but turn out to be wrong? Under a deterministic system, all users who submit “false” reviews will have their collateral slashed. This means that we would be punishing even innocent users and disincentivising people who only wanted to help from participating on our platform.

  5. Regardless of intentions, arbitrating between who is right and who is wrong, and rewarding or punishing people accordingly, is akin to assuming the roles of judge, jury and executioner. In a decentralised platform, this would represent a single point of failure with an intermediary, little accountability and unchecked power.

  6. While this may not protect everyone from getting scammed, it would reduce the overall number of scams in the community, and makes it much harder for scammers to operate once one person reports them.

  7. On balance, the current approach we propose is a pragmatic solution that addresses scam and encourages community participation without compromising on fairness or accountability.

  8. In the long run, we are considering potentially using user reviews to not only weed out toxic projects, but to also help legitimate projects improve their service offerings through user feedback analytics, similar to how FBA Aggregators (Fulfilled-by-Amazon) are designing improved products using insights gained by trawling Amazon Customer Review data (also see: Trustpilot’s freemium-premium two-tiered business model).

  9. We may thus be adding value through a dichotomous feedback loop and contributing to a safer and more robust crypto ecosystem.

ONBOARDING NEW PROJECTS: A SUGGESTED APPROACH

How do we onboard new projects and identify their initial “Chocolate Trust Scores”?

  1. To incentivise active community participation and honest behaviour when bootstrapping a new project’s review score for the first time:
    1. Two-thirds Supermajority consensus of reviews - “community consensus”
      1. Two-thirds consensus is preferred to a 51% simple majority as we want to be unequivocally certain about the community opinion about a given project
        1. The “trustworthiness” of a given project is defined as what two-thirds of all users say it is.
        2. So if two-thirds of all users give reviews with three of four chocolate bars, then the project is deemed to be “trusted”.
        3. The project is deemed to be “not trusted” if two-thirds of users give reviews with only one or two chocolate bars.
      2. Clarification: This works only during the “blind incubation period” (see below) because nobody is privy to the overall score at any point in time throughout the process and cannot manipulate the outcome.
  2. For new projects, we will implement a two-part "blind incubation period", during which users will submit reviews and lock up collateral without being able to view what the majority consensus is. This prevents speculators from just voting according to the standing majority and causing the overall score to be an outcome of path dependency, rather than what people believe to be the trust score of a given project.
  3. The blind incubation period will loosely resemble how the Polkadot parachain auctions are run. There will be two parts to the process with the second part ending in a similar fashion to the candle auction. 2. Phase I - Minimum Count of Reviews lends legitimacy: The first phase of the “blind incubation process” kicks off, users submit reviews and enjoy bonus CHOC rewards for early birds (which will be paid out after the incubation period). The first phase will only end after a minimum number of reviews, for instance 1000 reviews, have been given by users for the project. 3. This ensures that we have a minimum critical volume of reviews to make the overall trust score legitimate/statistically more meaningful. 4. This also incentivises projects to galvanise their communities to submit more reviews to speed up the incubation process. 5. CHOC reward rates are relatively higher during the first part to incentivise early birds to lock up collateral, submit reviews, and become eligible for CHOC rewards once the entire incubation process concludes. 3. Phase II - “Candle Process” prevents sniping and ensures the incubation process ends in a timely manner: Phase II will last for 7 days. At the end of 7 days, an algorithm will decide a random point in time within the 7 days at which a snapshot of the total reviews would be taken, and tally the overall trust score of the project. 6. This is similar to a candle auction in that the point in time when the review process “ends” is randomly decided. During this second part, users are also encouraged to continue submitting reviews and the overall score is still not revealed. 7. The random timestamp and blind review process are used in conjunction with each other to prevent sniping in which users wait for the review period to draw to a close and flood the platform with lots of new reviews at the last minute to influence the overall consensus. 4. In traditional auctions, bidders may wait for the last moment before the auction ends to bid slightly higher than the last auction, and adds a bit more. This drag on like in traditional “auction” processes 5. The random timestamp incentivises users to submit their reviews as early as possible, because they have no way to tell at which point in time the reviews will be tallied and rewards allocated. 6. Armed with only the knowledge of what they personally perceive to be the “trustworthiness” of a given project with no idea about the community consensus, the risk of losing their collateral if found to be wrong, and the potential of earning CHOC should their reviews be determined to be correct, users are incentivised to submit their reviews as honestly as they are able to. 4. At the end of the blind incubation period, the reviews are tallied, the consensus "trust score" of the project is determined by a simple average of all submitted reviews, and the users who submitted reviews and scores in line with the consensus will get rewarded accordingly. 5. Users will get CHOC and their collateral back at the end of the blind incubation period. 8. We plan to give users only four options to force an orientation for the reviews. The reviews must be directional and users must not have a "neutral option", because there is no value add if a review has no stance. 9. CHOC will be granted at a higher reward rate compared to usual reviews that follow after the incubation period to reward the early reviewers for their contribution and longer collateral lock up periods. 10. The conviction of the reviews also factors into the rewards rates: If a project is determined to be "trusted", for a scale of 1 to 4 🍫: users who voted “four 🍫” will get a higher reward of CHOC relative to users who voted only “three 🍫”. On the other hand, users who were wrong during the incubation period and voted “two 🍫” will get a very small amount of CHOC and their collateral back, while those who voted “one 🍫” will get no CHOC at all and only their collateral would be returned. 11. We will not be penalising "dishonest" or wrong reviews at the incubation stage to encourage greater user participation in reviews for new projects. 12. Users must lock up collateral tokens to participate. We want to incentivise only honest reviews, and users can be held accountable for their reviews if they have skin in the game (collateral). They have nothing to fear about losing their collateral if they are honest to begin with.
  4. Some notes: 6. Throughout the blind incubation process, the review score is not revealed to anyone. It is only shown after both phases have concluded. 7. The only distinction between both phases is that Phase I ends when we reach a minimum number of reviews , e.g. 1000, and Phase II ends when 7 days pass. Only the score is calculated based on the total reviews as of a randomly-decided point in time within the 7 days. 8. After the project is launched on the Chocolate platform, whether or not a review is genuine can be partly decided by if the review is in agreement with the consensus or not. 9. If the user submitting the review has a long positive track record, their review may also be granted a higher weighting
    10. Typically only a significant consideration for tail-end, lesser known projects as high-profile projects would have large majorities in favour of the project. 11. Down the road, we could incorporate natural language processing (NLP), a form of machine learning technology for word and speech/text recognition, to make the overall score more holistic / multi-faceted.
  5. Also see: Project-Sponsored Bounties (See “Governance” and “Tokenomics” section below)** **

The “Blind Incubation” Process

alt_text

SAFETY FEATURES

Checks and measures to protect the robustness of the system

  1. Alignment of Incentives

    1. Financial incentives engender reviewer (user) accountability, user reviews in turn encourage accountability of project teams as their public reputation is on the line.
    2. Further thought should be given as to the optimal way to approach our audit process, the intuition and rationale, and the role of machine learning in augmenting our approach for both user accounts and reviews, i.e. How do we tell if an account is legitimate? What is considered a genuine review and what is to be considered inappropriate content? How do we measure this and what is the threshold?
    3. This can be implemented in practice via: staking, collateralization, connection of wallets, and user and project profiles

  2. Staking

    Staking is conducted across the platform for each user. There are two distinct functions of staking in the chocolate platform that users can participate in. To be clear however, there is no practical distinction between the two functions in terms of how tokens get staked, and each wallet will have only one total staking balance.

    1. Staking to provide network security
      1. Users can stake CHOC to receive CHOC staking yield as an income stream for contributing to overall chocolate network security, similar to staking on Polkadot, Kusama, Moonriver or Phala Network.
    2. Staking as a means of enhancing CHOC rewards for user reviews 2. Users with higher CHOC staking balances on the chocolate platform will, up to a limit, enjoy relatively higher rewards compared to users who stake lower amounts of CHOC or do not stake CHOC at all. 3. This is to reward users for both contributing to network security and contributing to the trust system of chocolate

  3. Accountability for Reviews through Collateralisation

    Collateral is locked-up by users in order to submit their reviews

    1. This micro-deposit must be large enough to encourage honest participation, but small enough to ensure minimal friction in user onboarding and scaling of the chocolate platform, similar in concept and function to Interlay-Kintsugi BTC’s micro-deposits used when locking up BTC 4. Users should have “skin in the game” to ensure accountability for the reviews they submit 5. Also protects the system against Denial of Service (DoS) attacks
    2. For mainnet, this may be DOT or KSM, and eventually any non-CHOC token that is widely circulated and highly liquid such as ETH or BTC
    3. It is best practice to use an external token that is not native to the ecosystem, as this would protect against “bank runs” should the network come under attack by malicious actors, and the platform would be more robust in the face of “whale activity” affecting CHOC token price volatility.
    4. Using external tokens as collateral, eliminates pricing risk idiosyncratic to CHOC. For example, if the price of CHOC drops suddenly, the value of the collateral remains relatively stable and so users still have “skin in the game” and are incentivised to act in the interests of chocolate

  4. Authentication of Humanity (Indicative Approaches) 10. To ensure that the account is created by a human 6. hCAPTCHA2 (an independent and privacy-respecting alternative to Google’s reCAPTCHA)

    7. AI Hard CAPTCHA
    1. Flips consist of 4 images and two keywords, and must tell a story where one order makes sense and others don't make sense.
    2. The images should not contain words or numbers to give away the arrangement.
    3. They are shown as two strips for the user to choose the correct version.
8. "Sliding puzzle" verification
9. Machine Learning
    4. Potential collaboration with Phala Network to leverage Federated Learning to enable blockchain-native ML analytics
    1. To ensure user accountability 10. Achieved by connecting wallets 11. Asymmetric type key signing to authenticate who created the review 12. User profiles feature publicly-viewable review track records - the community can see a user’s contributions over time 13. Good track records unlock higher CHOC reward rates for review submission

  5. Verification of Reviews during Submission (Indicative Approaches) 12. To ensure that reviews are not submitted by bots or automated programmes after the user account has been set up 13. To also ensure the content is appropriate, i.e. not gibberish, discriminatory, offensive, NSFW etc. 14. We will learn and adopt the best practices for authentication from Amazon product reviews, Google reviews, Uber driver and rider ratings, AirBnB host scores, and TrustPilot, etc. 15. Machine Learning to Augment Human Moderation 14. Machine learning algorithms to flag suspicious reviews automatically, combined with an internal content integrity team comprised of human employees hired by the DAO to review flagged reviews, exercise holistic judgement and protect against machine learning bias/drift 5. Decision making process should be logged to ensure accountability and transparency 6. E.g. Trustpilot reported having received a total of >144 million reviews, with approximately only 2.2 million fake reviews removed in 2020 7. Down the road we could also implement crowdsourced review verification programmes to pay community members to moderate content, akin to Amazon Mechanical Turk, a.k.a. MTurk (see: https://www.mturk.com/), the DAO may “contract” these workers, so to speak. 15. Potential collaboration with Phala Network to leverage Federated Learning to enable blockchain-native ML analytics 16. Sample screens for bot reviews could include: 8. Are there many identical / similar reviews? 9. Did many reviews originate in quick succession? 10. Were the reviews generated from the same geolocation / IP address? 11. Were multiple reviews submitted simultaneously? 12. Does this account only submit reviews at a mechanical periodicity / frequency / specific time repeatedly?

BUSINESS MODEL

Initial Considerations regarding Total Addressable Market (TAM)

One reasonable estimate of chocolate’s total addressable market (TAM) would be the financial value of all crypto scams in a given year. As discussed in the “Introduction” the global annual figure may be quite substantial.

We could approximate the future impact of losses due to scam by extrapolating the growth trends for the total crypto market cap over the next few years, and extrapolate growth trends for the percentage of losses due to crypto scam, and multiply the estimated future total market cap of crypto by the estimated percentage of scammed value, to derive a ballpark estimate of the future value of crypto scam for a given year.

However, as mentioned previously, while the monetary value transferred from honest participants to malicious actors certainly illustrates the magnitude of the problem, the full impact—and hence opportunity for chocolate—of crypto scams must be considered as the cost of reduced / non-participation in the ecosystem as a result of undermined trust and confidence by mainstream society. The true number would therefore be meaningfully larger.

Monetisation

  1. Business-to-Business (B2B) model, with the priority being to maximise platform usage.

  2. We are addressing a large TAM, and there already is significant pre-existing demand for a solution to scam. We just need to build something that works.

  3. We enjoy direct connections to, and can leverage the substantial expertise and resources of, leading crypto venture capital firms, funds-of-funds, angel investors, exchanges, and elite crypto projects and institutions through our ambassador, advisory, personal and professional networks.

  4. Three possible approaches have been tabled, but the decision will ultimately hinge on network and community development and preferences. One universal truth that applies across all scenarios is that if Chocolate becomes ubiquitous and we achieve significant throughput, monetisation will be a straightforward matter.

  5. All alternatives are commercially plausible options at the time of writing, though we are currently leaning towards the DAO model due to its advantages:

    1. DAO with economic value accruing directly to the native CHOC token

      1. Community-ownership of the chocolate platform through the CHOC token, which also acts as a governance and utility token;
      2. CHOC is an incentive reward for good actors.
      3. All platform revenue streams will go to the community-owned DAO and holders of CHOC tokens
        1. Brave Browser-style ads (which do not infringe on consumer data sovereignty)
        2. Platform transaction fees, like Uniswap, DODO Ex and 1inch
        3. Projects or other entities may also pay to access detailed anonymised data analytics and insights (e.g. How can their Acala improve their DeFi LP staking services? What do Phala delegators feel about the unstaking process on-app and what can be done better?)
          1. Existing platforms like Trustpilot, Feefo and Tripadvisor are harvesting user reviews for free and profiteering off companies which buy that information. We aim to compensate the community fairly for their contributions.
      4. Holders can stake to contribute security, and vote to influence the direction of the platform;
      5. Facilitates community empowerment and engagement;
      6. Self-sustaining and decentralised; secure

    2. “TrustPilot” Freemium model 7. Free for all users and projects to participate, and projects have the option to pay a subscription for access to premium features. 4. B2B customers (see "Use Cases") sign up for free and can enjoy verified badges, platform support, but also have the option to pay a fee for access to premium features like user review analytics and insights on how to scale their projects based on honest community feedback. 8. Users and token holders can contribute reviews and earn tokens in exchange, like BAT in exchange for viewing ads.

    3. **“Insurance Premium” Subscription model ** 9. B2B: projects pay a subscription fee to enjoy the verification benefits of the chocolate platform. 10. If X were to represent the total value of losses each year due to scams in crypto, projects would be willing to pay a portion of X, e.g. 0.1X, each year to Chocolate to gain the remaining 0.9X of value. This would have otherwise been pocketed by scammers, i.e. “leakage”. 11. Overall size of the “crypto pie” grows for all ecosystem participants as we make lives difficult for scammers and bad actors, and greater mainstream adoption of crypto occurs.

USE CASES FOR CHOCOLATE

The purpose of chocolate is to eliminate scams. Some suggestions for where we could apply the chocolate platform include:

  • Token and NFT smart contract verification from coingecko etc
  • Crowdloans for Polkadot & Kusama Parachain Auctions
  • Hackathons, Incubators, Accelerators & Educational Events
  • DAOs
  • DApps
  • Airdrops
  • DEX platform verifications
  • NFTs (compare original mint index against addresses of given NFT to identify fakes)
  • NFT Auctions + Platforms / Exchanges (like Niftex)
  • LDOs
  • Ecosystem-Building Events like: Acala Ready The Treasury, Moonbeam Take Flight
  • Decentralized External Security Audit
  • Eventually - non-crypto native organisations including corporations and governments

TECHNICAL ARCHITECTURE

Why Substrate?

Substrate is a modular framework that enables creation of purpose-built blockchains with reusable battle-tested libraries while building the custom components that matter the most for us.

Substrate offers the ability to specify all of the blockchain runtime logic. This provides some flexibility over smart contracts. This opens up more possibilities for empowering existing networks (such as potential strategic partner network Publica Fida (f.k.a. Populace), which focuses on combating fake media) to leverage and extend Chocolate. In addition, building on Substrate provides the opportunity to operate as a parachain on Polkadot or Kusama, allowing for more interoperability between Chocolate and other chains that are doing the same. Finally, Substrate offers transaction queuing, storage, networking, block finalization, and consensus all either out of the box, or configured easily. Similarly, adding popular functionality like smart contracts, governance, and identity is made as simple as a "paste and configure" process through Substrate "pallets", which may be useful if any extended functionality like those are desired further down the line.

GOVERNANCE & INDICATIVE LEGAL STRUCTURE

The Chocolate and Community Autonomous Organisation (CACAO)

CACAO, also known as Chocolate’s Decentralised Autonomous Organisation (DAO), will be an organization run by its users and community. CACAO is the self-governance entity that oversees the policies and direction of the Chocolate technology platform, in which users and projects participate in the ecosystem. The Chocolate Foundation is a non-profit organization which has commissioned Chocolate Labs to develop the Chocolate platform. The Foundation also oversees the day-to-day operation of the platform.

The purpose of having a DAO is to enable a system that both allows the users to vote and executes the results of the vote. While it is possible to create a decentralized system where the results of the vote are executed manually, this can ultimately become a point of weakness. Thus, the system needs to execute the results of the vote to create a truly decentralized system.

While the governance committee would be able to vote on the decentralized organization, the committee does not need to be too technical; we do not expect or require the committee to be blockchain experts. So, most of the time the foundation will take the lead. However, the governance committee can veto the foundation's decision if they do not feel it is in the best interests of the platform to proceed.

Key Aspects

Laying out the groundwork for self-sustaining scalability and adaptability, community ownership and participation; and accrual of value to token holders.

  1. DAO with economic value accruing directly to the native CHOC token
    1. The Chocolate Platform is governed by CACAO and owned by the community through holders of the CHOC token, which also acts as a governance and utility token. See “Tokenomics” section below for more details.
    2. The Chocolate Platform and the Chocolate Foundation (the “Chocolate Legal Entity”), will be legally-distinct entities to avoid perceived conflicts of interest. See the exhibit below for an indicative structure of the organisation around Chocolate.
      1. Tokens are generated by the Chocolate Foundation, which are airdropped to the community and to DEXes (decentralised exchanges) and CEXes (centralised exchanges) for trading.
      2. “Project Sponsored Bounties”: Project teams can buy CHOC from these exchanges to sponsor a bounty for their project profiles on the Chocolate platform.
      3. Users who are familiar with the projects and are confident in the authenticity of the projects can stake collateral and submit a review, and can receive CHOC distributed from these Bounties once their reviews are authenticated by the platform.
        1. There is no conflict of interest legally because projects buy CHOC from third-party exchanges and the onus is on them to set up a bounty and promote their own projects on the chocolate platform. The size of the CHOC bounty is determined individually by the projects, based on how much they value receiving a Chocolate verification, with no influence from the Chocolate Foundation.
      4. Nonetheless, the Chocolate Foundation is also able to cherry pick elite projects as part of its “Sunrise Policy”—the Chocolate team may set up project profiles for the top established networks to facilitate early platform growth and adoption by the wider crypto community, and spend CHOC reserves out-of-pocket, to set up bounties for these projects and attract user reviews. 2. For these cherry-picked projects, the Chocolate Foundation must spend its CHOC reserves out-of-pocket, which represent both a real financial cost to the team, as well as an opportunity cost that the CHOC allocation could have otherwise been used on. 3. This is seen as a necessary investment cost to be incurred by the team in order to test the network’s functionality, incentive structure and build initial value on the platform.
  2. “Chocablock Treasury” 3. A Sovereign Wealth Fund maintained by CACAO 5. R&D grants, 6. strategic acquisitions, 7. return-generating investments (TBC), 8. community initiatives, 9. reserves to tide over recessions, 10. general maintenance of the ecosystem, and 11. to self-secure a perpetual parachain slot as an eventual replacement to auction crowd loans 4. All fees and slashed assets accrue directly to the treasury, which in turn rewards positive contributions to the ecosystem, and foster initiatives that contribute to the mission of chocolate
  3. “Chocolate Labs” 5. An R&D branch behind the next-level technologies powering the Chocolate platform, also responsible for supporting ecosystem growth and adaptability

Relationships Between the Entities

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TOKENOMICS

The Chocolate Token (CHOC)

The native token of the chocolate ecosystem is the Chocolate Token (CHOC).

The Chocolate Token (CHOC), a token based on a Substrate blockchain, is an important element of a new security model. Substrate, the framework behind the Polkadot token, enables developers to build purpose-specific blockchains. The Chocolate team chose Substrate because of its capabilities and we intend to connect our parachain to the Polkadot / Kusama Network relay chain. Beyond enabling the Chocolate to connect the parachain to the existing Polkadot / Kusama relay chain, Chocolate’s parachain will also benefit from the security provided by the relay chain.

CHOC will, at the early stages, be specifically tied to the chocolate platform, along with the appropriate governance and oversight processes. Fraud will be prevented or reduced by publication of source code and cryptographically secure transactions. CHOC issuance to individual users will also be rate-limited and tied to active review and security audit.

Token Utility

We foresee CHOC as fulfilling the role of a utility token thus having utility and therefore value to a range of key platform users and stakeholders. As a utility token, CHOC is not designed to be an investment per se but to facilitate the underlying functionality, security and value-add of the Chocolate platform. Below we detail our first view at how we expect different groups may use the platform and thus interact with the CHOC token:

Stakeholder group Role on Chocolate Incentive to value/buy $CHOC
Projects (e.g. Polkadot, Moonbeam) Submit bounties
  • Buy $CHOC tokens on secondary market in order to submit bounties and receive verification on the platform
  • Willingness to pay should be a direct function of perceived value of having a positive review on Chocolate
Reviewers Submit (verified) reviews
  • Sell airdropped $CHOC to realise a profit
  • Buy $CHOC tokens to stake and earn yield
  • Participate in Governance of Chocolate network
  • Gift $CHOC tokens to projects or users as tips or to support them
  • Receive $CHOC tokens as rewards
Content Contributors Produce educational content
  • Receive $CHOC for writing positive, constructive content
Validators and collators Secure the network and enable chain functionality
  • Stake $CHOC
  • Participate in Governance of Chocolate network
End-users (prospective project investors/users) Receive truth, no scams!!
  • Tip helpful reviewers
  • Purchasing platform-related merchandise e.g. NFTs

Community Token Strategy (Initial Thoughts)

We recognise and appreciate that our community strategy will be a crucial enabler to ensuring token-holder understanding and encourage engagement with the platform. Each stakeholder group must have sufficient access to platform materials and support when it comes to onboarding on to the platform. As a platform it is important that we pay consideration to both the end-users and reviewers (i.e. consumers) and the projects (i.e. the vendors) who we will rely on to list on the platform. Thus the fundamental issue we face when it comes to community will be scaling and achieving sufficient user engagement to make the platform worthwhile for projects to list on (and effectively pay to do so) while maintaining our own neutrality.

Policy (Indicative Approach)

Though the audit process will ultimately determine the value-add Chocolate can bring to the space, the tokenomics strategy can either facilitate or undermine the protocol’s functionality. The token strategy seeks to embed an incentive structure that achieves the following fundamental goals:

  1. **Security **- Incentivizing collators / validators to participate in securing the network by locking up tokens and earning subsequent rewards. The security aspect will be analogous to staking native tokens on a proof-of-stake (PoS) network such as Polkadot or Tezos with freshly minted tokens paid out to successful validator nodes as a reward for ordering, validating and collecting transactions in a block.

  2. **Utility **- Rewarding good actors - those who contribute genuine reviews and ratings - and punishing bad actors in such a way that the dominating strategy is always to post a genuine review (or not participate). In this way, before being permitted to submit a review, contributors would lock up a quantity of tokens referred to as “collateral”. Following verification of the authenticity of the review they would then receive tokens from the Treasury as a reward for positively contributing to the system. In the event of a fake or scam review they will have tokens progressively slashed via smart contract and their wallet profile flagged. Slashed tokens will return to the Treasury for redistribution to the community.

    Initially (for the purposes of the hackathon) this will be completed with CHOC, however going forward, contributors will lock-up KSM and then DOT as a micro deposit and get rewarded in CHOC. Use of these tokens will provide an added layer of security and stability given they are exogenous to the Chocolate protocol and a simpler, more widely available on-ramp for contributors.

  3. Governance - Facilitating the protocol’s on-chain governance mechanism including proposing of referenda, electing council members, voting, etc.

  4. Community Ownership of the Chocolate Platform - Alignment of interest encourages a more engaged and active community welcoming and rewarding positive contributions to continuously improve the model.

  5. Transactions - Paying for transaction fees on the network

The fulfilment of these four core aims of the tokenomics strategy will be contingent on overcoming a number of issues and considerations which the team recognise and are in the process of accounting for:

  1. Economic inflation - ensure the supply schedule supports value retention and functionality without stifling value creation and participation. Like other PoS networks, there will be an initial token supply (preliminarily 1 billion total) with portions reserved for funding, parachain slot funding (tbc.), development, Treasury and for the community. Going forward, an inflation rate of

">="0% will be targeted in order to: 1. Provide incentives to validators staking CHOC and securing the network 2. Provide rewards for users collateralizing CHOC and contributing genuine reviews

Therefore, each time a block is generated a block reward will be allocated to:

1. The validator who generated the block by way of reward for securing and facilitating the network
2. The Treasury which will distribute tokens to contributors and supports developers as well as the wider community

An inflationary model is chosen to incentivize token holders to stake (and spend) their tokens) instead of hoarding them as in a deflationary model (e.g. Bitcoin). This will be particularly important given the aim of incentivizing CHOC airdrop recipients to offer their tokens via DEX and CEX to third party projects seeking verification.
  1. Initial token allocation - avoid an unfair distribution whereby the Foundation / Developers control an outsize portion of the supply. Ensure sufficiently attractive volumes of tokens are allocated to reward users who contribute genuine reviews and therefore value creating reviews to the community. Given the legal entity structure and desire for third-part projects to purchase tokens on the secondary market (via DEXs) it will be necessary to have a portion of tokens to be airdropped.
  2. Ongoing token distribution - at the heart of the Chocolate protocol sits the idea that users are rewarded for genuine reviews of projects, entities, etc. and bad actors are punished by slashing their collateral. The mechanism for completing this will be for third party projects to purchase airdropped tokens on the open market to fund “bounties” to encourage users to complete reviews. Users will then review the project and receive tokens in the event of a successful review verification. In order to encourage participation, a minimum quantity of CHOC will be promised for a valid review with users having the option to further boost returns by staking additional CHOC for the duration of the review process.
  3. Disincentivizing malicious activity - together with the audit system, the collateral framework must be built in such a way that the cost to bad actors to spam the network with positive reviews exceeds the expected return from promoting and then executing a scam project. This can be tackled by a combination of: 3. Strong audit process set-up to recognise spam reviews (e.g. by pattern recognition, machine learning, etc.) 4. A rewards system where the greater the volume of accurate reviews a user contributes (which will be verifiable on the blockchain), the greater their impact score on the project review and thus the greater their reward manifesting as a loyalty bonus (e.g. through a user “trust score”) 5. Severe freezing and slashing of tokens to punish bad actors 6. Public flagging of suspected malicious wallets

Given the nascent stages of our project, the above token strategy’s aims, issues and proposed solutions remain purely preliminary and will be further detailed and formalized by the team. We hope to marry sector best-practice with a suitable theoretical framework that accounts for our novel legal structure and problem statement.

ROADMAP & NEXT STEPS

Encode Polkadot Hackathon (3rd Prize in Build-a-Blockchain Category)

  • Single feature implementation (User-view)

Hack DeFi with WIntermute Encode Hackathon (11-20th Prize)

  • Refinement of thesis and platform

Polkadot Global Series: APAC Hackathon

  • Project-view implementation

6 months: Q2 2022 Milk Chocolate

  • MVP (Milk Chocolate) implemented as parachain on Kusama
    • Website with CHOC as collateral
    • Community growth initiatives such as an ambassador program

12 months: Q4 2022 Dark Chocolate

  • Added features to Milk Chocolate:
    • KSM & DOT as collateral
    • Crowdsourced educational content on the main website on common types of scams and how to avoid them. CHOC rewards for contributions.
  • Integration to all Kusama parachains
  • Newest iteration implemented as parachain on Polkadot
    • Integration with all Polkadot parachains
    • Polkadot.js web browser extension integration
  • Integration with Trust Partners (Arweave, etc. See “Strategic Partnerships”.)

18 months: Q2 2023 Super Chocolate

  • Added features to Dark Chocolate:
    • Crypto wallets integration
    • Application in Code Audits
  • Roll out to Ethereum and other blockchains via Substrate bridge

24 months: Q4 2023 Matcha Chocolate

  • Services offered to off-chain organizations, government entities, etc.

Strategic Partnerships - Our Vanguard’s Pillars

We have identified projects working towards the shared goal of increased safety and trust in the ecosystem using crypto technology, established direct relationships with key members in these teams, and laid the initial groundwork for collaboration down the road. Not all are based on the Polkadot infrastructure, but given the scope for compatibility made possible through projects like Moonbeam Network and Astar Network, we see this as an achievable objective.

Our vision is to establish a “vanguard of trust” in the crypto ecosystem. Our intention is to integrate with other projects that specialise in particular aspects of this theme:

  • Source of trust for organisational identity - chocolate will focus on the identity of projects and organisations
  • Source of trust for news - Publica Fida (f.k.a. Populace) will focus on media and fact-checking fake news
  • Source of trust for historical records / collective knowledge - Arweave will act as a source of trust on events and information recorded over time, similar to the Library of Alexandria, a repository of society's collective knowledge, stored on a blockchain. Arweave refers to this as the "permaweb".
  • Source of trust for physical objects - bank notes, official documents, luxury goods, high value manufacturing components, military equipment, healthcare, precious materials
  • Source of trust for intellectual property (IP) and patents - in the pipeline

Additional Opportunities for Collaboration

RISK MANAGEMENT & MITIGATING FACTORS

Technological

  • Proof-of-Stake (Attack by buying up 51% of all tokens available so you can dictate the governance)
    • Core team could hold a significant buffer of tokens until it is safe and ecosystem is mature and sufficiently distributed before drip feeding the rest of the supply publicly
    • KYC during token sales (ensures a cap and also that tokens are distributed evenly during treasury funding events)
    • Distribution should be very evenly spread out amongst many users to protect against whale activity and pump and dumps/51% attacks
  • Core dev team gets hacked: code gets manipulated (malware)
  • Exploitation of smart contracts in substrate pallets (infrastructure chocolate is using)
  • Code has glitches/bugs
    • Code audits / security audits from reputable third-party code audit firms
    • Implement test nets and wargaming to field test the network
    • Kusama-like canary net
  • Someone steals the code repos and releases it to the public or builds a competitor?
    • Eventually our code will be publicly available on the blockchain anyway, stealth mode for now
    • Break up workflows and repos so no single person has access to everything or it would be difficult to get access to everything
    • Require 2FA and yubikeys for github accounts for core dev team?
  • Third-party Vendor Risk: Polkadot and Kusama layer-0 protocols may face some structural vulnerabilities or problems that may emerge down the road, exposing all parachains and ecosystem projects to a form of systemic risk
    • Polkadot runtime forkless upgrades effectively "future proof" the network against vulnerabilities and patches may be rolled out in runtime
    • But still good to have contingencies in case the worst happens, for this reason we are aiming to make our platform compatible with Ethereum, Cosmos, Solana etc. in the long run
  • We currently lack a dataset to train our machine learning algorithms. Catch-22 chicken and egg problem - how to develop ML algorithms without data, how do you get data without screening them through ML algorithms.
    • Start by getting any data available, or leverage existing trusted and reputable data sets
    • Then learn, build out ML, and add data as you go along

Competitive Landscape

  • Threat of new entrants
    • Continually engage in innovation
  • Threat of better technology? Maybe something that solves the blockchain trilemma and is technically superior in all aspects to existing tech infrastructure that our platform is built on?
  • Established players (incumbents) have secured significant network effects (barriers to entry) in the form of data, machine learning algorithms, user base, commercial partnerships, contracts etc, and if they decide to use blockchain technology it would be too difficult for us to compete effectively with them and win market share
    • Be more nimble, adaptive, and provide more value to the target audience than the incumbents to win market share

Political, Legal and Regulatory

  • Governmental crackdowns
    • Gavin Wood was saying that the most likely to get regulated are custody solutions (to confirm)
  • Lack of legal clarity on treatment of crypto assets, policy equivocation. Makes it hard to engage in long term planning
    • Seek out countries which are clear in their legal frameworks, have strong rule of law in their jurisdictions, and are crypto-progressive/accomodative, tax friendly (See: France, Dubai and Singapore for examples of such. Moonbeam, Acala, Phala, Nodle and many others are nonprofits established in Singapore)
  • Conflict of interest (who is paying for the reviews?)
    • Arm's length transactions: maybe Chocolate platform does not sell tokens to users, but we airdrop to CEXes and DEXes, and the projects buy these tokens up and set up bounties on the chocolate platform for users to buy reviews, etc. (TBC)
  • KYX that is non-compliant? Ask for too many details and keeping information that is not ours to keep (See: GDPR)
    • We will use collateralisation and transparent user review track records to encourage accountability.
  • GDPR -how to deal with user data and reviews as they are recorded permanently on the blockchain
    • We will only track wallet addresses, which can be anonymous if the user prefers, and we will not require personal information to be divulged

Environmental

  • We face an opportunity rather than risk: PoS systems are more eco-friendly than PoW systems

Sociological

  • Motivation Crowding Theory - if we pay people for reviews, will they no longer give them for free? Currently people are doing this for free on TrustPilot
    • There will always be people who will share their input, and will always be inclined to do so, whether out of their goodwill, or even as a form of vengeance against bad acting projects, especially as the platform will engender growth in the crypto ecosystem
    • When the community gets excited, they would be interested to be a part of it

Financial

  • Unable to pay for market compensation for appropriate talent
  • Unable to raise sufficient funding - to finance hiring, R&D, operations, etc.
  • Burn rate is too high and we run out of money before being able to hit milestones or raise subsequent funding rounds (blue ocean especially, because nobody believes in it, or can't solve the problem with the product)
    • Plan ahead, make a robust roadmap and budget for how we plan to allocate our capital over time and for the respective workflows, operations, etc
  • Tokenomics is not well developed/thought-through (half-baked plan)
  • Fixed supply? Or mildly inflationary? Deflationary? Has an implication for the long term viability of the ecosystem
    • Requires detailed research to flesh out policy
  • Downrounds? If you were too greedy early on, the next round investors may be less bullish on your startup and this would look very bad on branding and reputation
    • Be conservative and humble, but firm with negotiations on a fair valuation and equity allocation
    • Use benchmarks for comparable comps/similar companies in crypto, traditional tech etc to reach a fair valuation
  • Risk of hostile takeover by external parties
    • Ensure that core team minimally has 51% after full dilutions
    • Split up the cap table and ensure stable of investors is distributed evenly so no monopoly power by any one investor
  • Unable to monetise the platform (we have ideas e.g. premium subscription, platform fees, but: people may not buy the tokens or HODL them, if we do ads, maybe no projects want to use our Ads platform, etc.)
    • Multiple revenue streams, and also link the purchase point directly to where the value of the platform is: perhaps by charging projects for access to insights on user reviews for their project
  • Token price volatility and illiquidity - leads to exogenous shocks on the platform incentives and also a vulnerability to bad actors and competitors, pump and dump schemes, rug pulls etc. Insufficient liquidity makes it difficult to transact
    • Roll out tokens to multiple CEXes, DEXes, aggregators: Binance, Kraken, Gemini, Coinbase, KuCoin, FTX, Dodo DEX, Uniswap, 1inch
    • OTC trades? As an alternative, integrate with the wallets: Ledger, Metamask,
    • Set up liquidity provider pools (LP staking pools: see pancake swap, syrup, Karura LP staking etc.)
  • Treasury gets hacked
    • Take out insurance
    • Use a multisig
    • Don’t put all your eggs in one basket, look for multiple online and offline decentralised and secure/air-gapped custody solutions.
    • We have bigger problems if the polkadot infrastructure gets hacked as the treasury would be DAO-governed

Human

  • Lack of human resources - unable to source the appropriate skills, domain knowledge, expertise required to build and maintain this platform
    • Cast sourcing for talent far and wide, and compensate fairly and incentivise appropriately
  • Core team members fall sick or get incapacitated
    • Have a clear chain of command (see: military battlefield best practices)
    • Ensure that there is a second-in-command to every key role, and so on so forth and train them with the skills and knowledge required to stand in if necessary
    • Ensure that each teammate does a bit of other work streams so everyone is familiar and staffing shocks can be absorbed more naturally within the organisation.
    • Maybe institute rotations between departments and would be beneficial for holistic development and fostering interdepartmental trust and mutual understanding of paint points. Good for cohesive culture.
    • Balance: chain of command with flat hierarchy to retain organisational agility
  • Corruption of the core team
    • “Turns out to be the biggest scam of all!”
    • Decentralise authority
    • Institute checks and balances and failsafes
    • Build a culture of ownership and accountability into the team, community and the platform
    • DD the core team backgrounds. Recruit only those you trust and respect for their skills in equal measure.
  • Projects paying for reviews (akin to buying Twitter followers)
    • Align the incentives appropriately, conduct spot checks at random
  • Disagreement or discontent between teammates
    • Cohesiveness essential to successful execution
    • Make sure that there is transparency, good leadership, and team culture is paramount
  • Malicious human behaviour attempting to attack the platform - black hat hackers conducting denial of service attacks (DOS), "review bombing", r/wallstreetbets
  • Internet "Trolls" - typing gibberish
    • Design robust ML algorithms
    • Hire and invest in the best talent to build out this adversarial ML component

TEAM

Team Members Role Background
Tobechi Okaro Front-End Engineer CS student, some React native, HTML, CSS
Rahul Navgire Substrate Developer Technology, Electronics, and Communications Engineering Student. Project Intern at PolkaMusic. Substrate, Rust, defi, java, Kotlin, Android Developer and polkadot buildathon runner-up.
Sammi Wei Strategy & Operations Art & Tech Advisory. Serial entrepreneur, Oxford MBA Candidate, background in media/entertainment/arts management.
Russell Sng UI/UX / Gamification / Solidity / Solana Developer Advocate, Game Development Background (Programmer, Design, UX/UI, Level Design), VR/AR Metaverse Applications (Medical/Gaming/NFTS), Crypto Yield Degen, Project Management
Martyn Kemp Cybersecurity / Substrate enthusiast In the IT space since 1998. CISSP, CCSP and CEH accredited technology consultant delivering Cyber Security, Networking and Infrastructure projects. Core strengths include technical security implementation and architecture, security audits and reviews, system monitoring, vulnerability management and incident response including malware analysis, infrastructure virtualization and cloud deployment, build hardening, automation and Infrastructure as code with terraform, k8s and golang advocated.
Patrick Yeo Commercial Advisor Oxford Law grad, England & Wales and Singapore-qualified practitioner, commercial advisor to crypto startups and crypto native since 2017. Commercial and Corporate, specialty toward Tech, Banking and Finance, Data Privacy, Fund Raising
Malcolm Kang Finance & Accounting, Tokenomics Crypto enthusiast, former technology investment banking at Deutsche Bank, startup finance at Reonomy
Kresna Sucandra Substrate Developer Co-founder & Substrate Developer of InvArch, Advisor of Debio Network, Solidity & Substrate Developer, Polkadot Ambassador + Community Mod, Anesthesiologist and superhero dad of three beautiful kids by day
Kadar Abdi Operations & Customer Experience Product and customer experience Account Manager at Copper.co, crypto startup, Acala Ambassador, Polkadot Ambassador Candidate
Islam Ibrahim Full Stack Substrate Developer CS student with web development experience. Skills: React, TS, JS, CSS and semantic HTML. Learning Substrate.
Henry Stevens Marketing, Community, Tokenomics & Strategy Cambridge Economics grad, Strategy Consultant specialising in tech and digital, Crypto Enthusiast
Owen Kosman Machine Learning / Full Stack Dev / Substrate Dev (to be) IBM Full Stack Software Engineer, Machine Learning
Lindsey Ayotte Growth & Community Polkadot Ambassador Candidate, background in IP licensing, content creation and social media
Clifton Yeo Product, Strategy, Metaverse Cambridge Land Economy grad, Tech Investor since 2014, Independent Advisor to Phala Network, Polkadot Ambassador Candidate, Acala Ambassador, Moonbeam Ambassador, DODO Ambassador, Investment Associate at Cambridge Associates

CONTACT

chocolate 🍫

email • twitter • discord

Notes

Footnotes

  1. See: https://rugdoc.io/, https://tokensniffer.com/, https://rugseekers.online/ ↩

  2. CAPTCHA: Completely Automated Public Turing test to tell Computers and Humans Apart ↩