The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication.
Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud.
We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.
We assign the Play2Live project a "Positive" rating. In our opinion the Play2Live project meets the requirements for this level of investment rating.
The market for eSports streaming events continues to show strong growth; such events remain in demand by gamers as well as ordinary fans of eSports. We think the idea for creating a streaming multi-service portal with advanced features, with its own economy and accounting and payments system based on its own blockchain, is a good one. The combination of advanced technologies utilized will solve many problems arising in the process of development of the streaming and eSports industry, and to offer new possibilities — this applies to betting on games, interactive e-sports, tasks for streamers and so on. Play2Live therefore has every chance of occupying a share of this highly promising market.
Play2Live has a well-developed business model and mostly thorough documentation. The team's idea of creating a service based on its own self-developed virtual machine, and of using its functionality to the maximum in order to build a reward system completely controlled by its users, is a good one. In this regard, the establishment of a private token seems reasonable and justified.
The Play2Live project’s marketing campaign is well-developed. Public coverage of the project is at a good level, and the number of subscribers on social media meets expectations. We would like to highlight the lively discussion of the project’s features with the community in the BitcoinTalk thread and in the Telegram group.
The project team includes industry professionals. We believe that relevant experience acquired by team members in the fields of streaming and eSports, and also with blockchain technology, is significant. We have not identified any factors discrediting any project team members during our audit.
The Play2Live project is based on the development of a streaming platform, which in a general sense is similar to existing sites — Youtube, Twitch and so on. However the platform is multipurpose and highly decentralized, due to the unusual ecosystem for rewards and payment transactions for users (streamers and viewers). This is achieved through use of proprietary blockchain architecture.
Play2Live is a project that uses blockchain in its developed ecosystem, not just as a token: in this case many of the services will be processed by the virtual machine. On the one hand this will offer a high degree of decentralization - a positive feature in the streaming environment as disputes among community members arise quite often. On the other hand, moving these processes outside the project’s own architecture reduces the need for its support and maintenance. Only the question of the network nodes' funding and availability remains, and in this case it is answered by the allocation of a portion of the platform fee to the maintenance of the blockchain.
We should also note that the use of a decentralized network enables the project to dispense with intermediaries in all their manifestations, offering the possibility to create autonomous services around streaming and eSports events. Thus the Play2Live platform becomes a much more diversely useful product than any of the existing popular services.
The LUC Token announced for the Play2Live ICO is a standard ERC20 token with utility functions. The Ethereum blockchain is not used for the Play2Live ecosystem; the team is developing its own network — Level Up Chain. After its release, ICO tokens will be converted into the internal platform currency at a ratio of 1:1.
The token sale is divided into three stages: A closed round of the pre-sale to accredited investors, an open pre-sale and a crowdsale. At the moment, the first two stages have already been held: A private placement in October–December 2017 and a pre-sale at the end of January 2018. According to data from the counter on the project site, there has been a significant amount of funding raised already (more than half of the hard cap).
Below we will examine the key parameters of the ICO:
Start: 12 Feb 2018, 5:00 PM UTC
End: 5 Mar 2018, 5:00 PM UTC
Hard cap: $30 000 000
Price: 1 LUC = $0.05
Min investment: 0.1 ETH
Token: LUC, ERC20 standard
Accepted currencies: BTC, ETH, BCH, LTC, DASH, USD
Total issue: 1,308,000,000 LUC
Allocation of funds:
- 62.5% — Token sale
- 11.1% — Reserve fund
- 10.4% — Founders and project team
- 7.2% — Project partners
- 7.2% — Advisory board
- 1.0% — Bounty program
For sale: 817,500,000 LUC
Bonuses during public token sale:
- Feb 12–14 — 10%
- Feb 15–17 — 9%
- Feb 18–20 — 8%
- Feb 21–22 — 7%
- Feb 23–24 — 6%
- Feb 25–26 — 5%
- Feb 27–28 — 4%
- March 1–2 — 3%
- March 3–4 — 2%
- From March 5 — 1%
Raised funds will be distributed as follows:
- The portion allocated to the project’s operations fund will be locked in the smart contract and thus will not be available until the release of the MVP.
- The money stored in the operations fund will be locked up for two years from the public release of the beta version.
- The project team’s and the founders’ funds will be vested over 2 years. Project partners’s funds will be vested for 3 years.
The use of a decentralized network in the architecture of a streaming and eSports platform opens up many possibilities for improving and extending the traditional functionality of such a service. At the moment Twitch, for example, is funded primarily via a mechanism of advertising provision and donations. Play2Live has announced 25 functional modules, of which 15 will generate revenue. The project team paid great attention to the description of the greater part of these modules — the functionality of the platform. Here we will examine this in more detail, especially the two key areas of streaming and eSports.
The streaming platform operates on the basis of LUC tokens and the Level Up Chain blockchain. In contrast to the standard streaming model, where the bulk of a streamer’s earnings comes from working with advertisers, in this case the work is fully placed in the hands of the streamer. Moreover, the degree of control is simply huge: The streamer will be able to decide how much, when and what to show (up to manually turning on videos in between broadcasts).
The situation is similar with other marketing tools — launches of marketing campaigns, games, events and products. To encourage users to disable ad blockers, Play2Live will give them a portion of the proceeds from advertisers. In fact, there is little information on interactions related to marketing services in the project's documentation - perhaps this is the only characteristic of the services that requires additional description.
Another important aspect of streaming is donations, as well as possibilities for interaction between streamer and viewers with the purpose of monetization of the viewed content. The donation system on the platform resembles a standard scheme, the only difference being that transactions in the blockchain are visible to all users, eliminating the possibility of manipulating this tool. In addition, transactions that are transparent and visible at any point in time may serve as useful statistics.
Another means of content monetization is the setting of tasks for streamers. This is Play2Live's know-how, there is no other such mechanism on the market. Although streamers can now independently come up with different tasks and methods of assessing their performance by the audience, without the participation of an independent mediator and evaluator it is impossible to build a normal system. In this scenario blockchain serves as an intermediary, and evaluation of the implementation of the task is provided by users themselves.
During streaming, users can invite a streamer to perform a task for a fee; the streamer selects the most acceptable and valuable task, and begins its fulfilment. After the streamer confirming that the task is complete, viewers begin to vote — to verify the task fulfilment or not. The threshold for verification is 51% of all votes. In the case of disputes (the deliberate manipulation of votes) a third party is involved — a judge. Motivation for all participants of the process is maintained by obtaining LUC — for a streamer from a pool of tokens for the task, for the viewers when voting, and for the judges from the pool of rewards for the platform and streamer.
The Play2Live eSports platform also has some interesting innovations. The team has developed a system of content crowdfunding: The creation and distribution of an event budget on a decentralized basis. Moreover, the budget is based not only on buying access or on gifts: users, through their own monetized votes, design the content of the event, choosing for example commentators for this year's event.
In general, the possibilities for blockchain use here are very wide, so options on each event could be different depending on the organizer’s choice. We note only that the monetization of all aspects of the eSports content and the ability to choose will enable significantly increasing fees, and as a consequence prizes for teams. In the end, this tool will be effective for all participants.
The Level Up blockchain may also serve as an escrow system for eSports events. Money raised through crowdfunding by the organizer is blocked until the end of the event, and after the verification of its results they are distributed automatically to the winners’ wallets.
Another service announced by Play2Live and associated with the eSports aspect of the platform is sports betting. Users can bet on the participants of this year's event, the platform through the blockchain itself will determine the odds of winning and distribute any gains in accordance with the results of the event.
Moreover, bets can be placed in LIVE mode, and even on games that take place outside of the platform, results of the event will be recorded by the operator. Bets are possible not only on the outcome but also on any other events/actions, limited only by the imagination of the audience. Betting is possible with the involvement of a bookmaker's offices; coefficients are determined independently.
In addition to these services, Play2Live is developing a p2p CDN system, which will significantly increase the speed of streaming and response via the Level Up Chain, without Play2Live itself having to pay for this. Users will receive rewards if they provide computing power for the CDN.
We should also discuss the basis of the Play2Live platform — the Level Up Chain blockchain architecture. The architecture is developed on the Graphene platform using the DPoS (delegated proof of stake) algorithm of consensus. The team claims that these solutions will allow them to reach a speed of more than 50,000 TPS.
Play2Live presents itself as a "blockchain-based streaming platform for gamers and eSports fans". The gaming industry and eSports are major markets with good prospects, but the interests of Play2Live are not restricted by these narrow bounds. The official project white paper indicates that the project’s scope takes in the following market segments:
- eSports and gaming
- Betting and exchange of external items
- Live and VOD broadcasting of game content
Before looking more closely at the market, it should be noted that the project’s team has done extensive work in this direction. In a sense, an exemplary analysis of the environment has been carried out. The results of research conducted by the Play2Live team can be found on the project's website in the "Esports and Gaming Markets Overview" document.
As correctly pointed out by the founders, the development niche for the Play2Live project is at the junction of modern dynamically developing markets. The following diagram is presented in the white paper:
The biggest segment in the diagram refers to the gaming market. The impressive figure of US$105 billion was apparently taken from research conducted by SUPERDATA in 2017, where in addition to the current numbers, a forecast is made up to 2020.
The chart clearly shows that the Interactive Media segment is expected to grow faster than Digital Games. It is expected that the share of Interactive Media of the total revenue will increase from 7.7% in 2017 to 26.9% in 2020 and the CAGR of the segment will be about 77%.
Regarding VR, this market will be one of the most promising in the coming years. Now its technology is already sufficiently developed to make VR content available to the mass consumer, it is up to content producers. The same study by SUPERDATA provided a very interesting forecast on the dynamics of the VR segment.
According to the forecast, within four years the segment will show explosive growth that will make the VR segment more than noticeable and will close the "gap of disappointment", the effect of overestimation of the VR industry in the short term and that of underestimation in the long term. This effect has been actively promoted by the CEO of Unity Technologies, John Riccitiello, who criticized forecasts made by a number of journalists in 2016 [VentureBeat].
We will now discuss Gaming Video Content (GVC). For many, the figures will be unexpected, but the audience for GVC has already exceeded the audience for HBO and Netflix combined. On this issue, SUPERDATA provides the following information:
In order to make the GVC audience’s volume clearer here is a different representation of the figures.
The leaders in modern game streaming - Twitch and Youtube (Gaming live) - already dominate according the diagram. These two platforms account for the vast majority of streams, now amounting to 23.4 K on a daily basis on average. This conclusion can be drawn from a quarterly report by Streamlabs for Q4 2017. According to this report, the current distribution for active streams is as follows:
The graph on the diagram shows that the dominant position for Twitch in the distribution is currently highly significant, but streaming on Youtube continues to gain popularity. The current giants of IT surely understand the prospects for game streaming, so Alphabet is making efforts to oust Amazon's Twitch. In 2014 Amazon acquired Twitch for US$970 million; now this investment seems quite reasonable [The Motley Fool].
Twitch's positions are supported by a system for monetization of streams for content producers, affiliate programs with games publishers (Activision Blizzard) and the largest-scale gaming events (E3, BlizzCon, The International (Dota 2), League of Legends Championship Series LLC, etc.).
In entering the game streaming market, Play2Live understand the factors currently at play there, but also see new opportunities open to them. The project team has no illusions and is presenting itself clearly. The first question on the Play2Live FAQ is as follows:
From this answer it is immediately obvious that Play2Live is making a big step towards the economic development of streaming, adding a new full-fledged participant - the viewer. The tokenization of the project’s services will help to take interaction between Play2Live ecosystem members to a qualitatively new level. A wonderful post in the official project blog contains the answers to many questions about competitive advantages.
The Play2Live team sees several fundamental flaws in the current state of affairs in the market of game streaming:
- Limited possibilities of interaction between streamer and viewer
- Viewers are unable to earn on their activity
- Out-of-date methods of advertising promotion
- Streamers are not always able to quickly start streaming and earning from it. Registration and the specifics of individual platforms often create particular difficulties.
To summarize all of the benefits offered by Play2Live for a user, we present a summary table:
The Play2Live project team is a group of professionals with extensive experience. We could stop here since experience and reputation are usually the main requirements for teams launching ICOs.
The project is headed by Alexey Burdyko, who is known in the eSports community in the CIS. Thanks to his previous project, Game Show, numerous eSports tournaments were held in Russia.
In addition to Alexey the project team includes professionals known for their work with large IT projects such as the Mail.Ru group, Wargaming, Rovio, Rutube.ru and many others. Orhan Zeynalli, well-known in the community for his work with the Mapala and Travelchain projects, is responsible for blockchain.
The official white paper and website offer plenty of information about team members, so we will not list them all. We will only say that the experience of the team members is relevant and can easily be confirmed on open sources.
ALEXEY BURDYKO, CEO & Founder
Experience in eSports of more than 7 years; one of the trailblazers in the eSports industry in Russia and CIS. Founder of one of the largest eSports holdings in Russia and CIS - Game Show Media Holding, valued by Ernst and Young at $36.8M. Alexey held 35 esports tournaments in total, including intercontinental eSports showmatches.
Founder of the tournament eSports platform
Work experience with major streaming platforms — Twitch.tv, Hitbox.tv, Azubu.tv, Mail.Ru Group (VK.com, OK.RU)
More details: LinkedIn
DMITRY KOCHNEV, COO
Former Director of eSports at Mail.Ru Group.
In 2013–2015, he was managing director of Rambler.Ru, the third largest Russian media portal.
Since 2010, Dmitry has acted as COO of GameNet, a social network for gamers, and COO of Xsolla, a payment solution for games.
In 2006–2010 Dmitry was VP Business Development at Astrum Online Entertainment, an online game publisher, later acquired by Mail.Ru Group.
Dmitry received his M.Sc. degree in Software Engineering from Saint Petersburg State University.
More details: LinkedIn
INNA MOROZ, CBDO
Former Head of Co-branding and Licensing Global, Head of Merchandize Licensing Global in Wargaming.
16 years of successful management experience, business development and marketing in the gaming industry including promotion, co-branding, deal origination and licensing. Successful track record in international publishing including eSports.
Work experience in: Wargaming, Rovio, Playnatic, Buka, Noviy Disk.
More details: LinkedIn
ORHAN ZEYNALLI, Blockchain CTO
Graphene evangelist. Solid experience in developing projects in the blockchain industry on the Bitshares and Graphene platforms in USA and Europe. Has launched more than 10 projects.
Projects launched in the blockchain industry:
- Blockchain platform for travelers (mapala.net) - CTO / co-founder
- SmartData for Travel Market (Travelchain) - CTO / co-founder
- Blockchain Advisor for:
- Several Blockchain Traded Funds
- Car Marketplace on Blockchain
- Creating a machine-learning project (Aigents) using blockchain social platforms Steemit & Golos – PM
ALEXANDER KUZNETSOV, Lead developer (streaming core)
CTO Rutube.ru — leading Russian online video service.
Co-founder and CTO Minutta — leading video editing app on social media.
CTO Inventos — broadcasting for NTV+ Co-founder.
CTO TvBit — TV-like media streaming experience service from social news feeds.
The Play2Live project has a fairly extensive list of advisors involved. Many of them need no introduction and are well-known in the community.
Can Yang - LinkedIn
VP of Global Business Development for Imba TV, CBO of Team MVP
David Drake - LinkedIn
Managing Partner at LDJ LP Fund Investments
Victor Martyn - LinkedIn
CEO and Owner, GosuGamers
Greg Limon - LinkedIn
Founder of Canada Capital Group inc
Stan Milc - LinkedIn
Co-Founder, Planet Partners
Anton Arganovsky - LinkedIn
President, Agranovsky IT; Ex. Destiny Development
Richard Kastelein - Linkedin
Co-Founder, Cryptoassets Design Group
Reuben Godfrey - Linkedin
Advisor at Playkey
The LUC Token participates as a payment currency in all transactions on the platform, as an aspect of the Level Up Chain blockchain developed by Play2Live. Users will be obliged to keep the token, firstly due to the impossibility of paying in other currencies and, secondly, in order to receive rewards through the blockchain system DPoS.
The scheme for the economy of the project is given in a general form in the documentation:
It shows that a portion of the platform commission is burned, another portion is allocated to the level up chain foundation, and another portion is allocated to funding the pool of rewards for users which provides financial motivation for platform members.
In the charts and examples the team provides specific numbers, but it indicates that final pricing will be determined after the launch; one should not fixate on the 40% commission.
LUC tokens are a means for the tokenization of 15 types of income for platform members (streamers, viewers, users, athletes):
- Paid subscription
- Betting on eSports events
- Tasks for the streamer
- Tasks from the streamer
- Content crowdfunding
- Promotion of streamers’ content
- Bets via bookmakers with odds (centralized betting)
- Gaming marketplace
- Duel, bet
- Prize draw exchange
- Premium subscription to the platform
- Selling gifts, emoticons, insignia
- p2p CDN
The number of sources for the generation and circulation of tokens is really impressive; they are all different and have their own pricing. The LUC token is clearly a significant aspect of the Play2Live platform, and demand for it will be a result of the popularity of services provided there.
Play2live’s token is not the traditional type typically used for ICOs. The project ecosystem, after the launch of the platform and the exchange of ERC20 tokens, will be closed to external influences. Risks and negative factors therefore lie entirely within the system — these are potential abuse of the project economy’s management, and rejection by users of the complex models involved.
It is important to understand that although the main target consumers for Play2Live are au fait with a technological and computer-based environment, they may have little idea about blockchain and cryptocurrency ecosystems. The situation is similar for third parties such as advertisers and partners. The Play2Live ecosystem is not completely decentralized; the key parameters are set by the team, and the Level Up Chain is another independent project. In this regard, the tools for economic regulation and also leverage on their community are in the hands of the team. Otherwise we do not see any negative factors possibly affecting the value of the token; all the decisions taken are aimed at assisting its growth.
A key moment in the ecosystem is the process of sharing the platform revenue with users via the buyback of tokens from the market (revenue burning). At the same time, the team plans to share profits from the project after reaching operating profit, and it is obliged to destroy up to 25% of tokens from the profits. Such mechanisms are extremely beneficial in terms of stimulating the value of the token.
As a strategic benchmark, Play2Live presents a forecast for the monthly growth of the project’s audience after the release of the platform. A year afterwards, when it is expected to reach a break-even point, the audience will be more than 10 million visitors. Play2Live states that this graph is calculated on the basis of a minimal scenario and reflects a pragmatic approach to planning. We wish to point out that outside of the financial plan and the conditions illustrated in the scenario, it is difficult to assess such schedules; however, the figures do not look overly optimistic.
With regard to the strategic view, there are two types of roadmap in the white paper: the dependence of the operational process on funds raised during the ICO, and the roadmap for platform development. From the point of view of the value of the token, the second document is more interesting. According to the forecasts, the basic process for the development and launch of the product to the market will happen before the end of this year. In 2019 the efforts will be focused on creating an organic audience for the project and on market expansion.
Given the short period of development, we can conclude that some fundamental factors will affect the value of LUC tokens in the medium term. In the short term, the influence of speculative sentiment is possible as marketing activity for the project is at a high level: It is receiving coverage not only within the crypto community but also in eSports and streaming.
The long-term potential of the streaming and eSports services offered by Play2Live is considerable. It is enough to estimate the size and growth of Twitch’s audience, and the breadth of the capabilities of the platform being developed. Not all the project’s services may gain popularity among gamers, but the number will somehow reflect the quality — the project should only develop a few directions.
There is a "Risk Factors" document available on the Play2Live project website. The document contains significant risks from the team’s point of view. In total there are 21 of these factors, and they cover a wide range of risks that affect the project (from risks with the Ethereum Protocol to operating risks for the project). We highly recommend reading this document because in many respects it can be considered exemplary.
As with most projects entering large markets, the Play2Live project is faced with the challenge of successful integration into its segment of choice, the video game streaming market. A promisingly large market is currently divided between big players such as Twitch and Youtube, who are competing with each other. Against this background, Play2Live can present themselves at their best with the new possibilities provided by blockchain technology. These possibilities must be quickly and efficiently translated into action, as competitors among other blockchain startups could quickly deploy similar services.
It is also important to note the role of affiliate programs for major content producers in the gaming industry. Exclusive streams and tournaments will be a powerful driver for attracting audiences. For obvious reasons, the Play2Live team will not disclose its existing agreements until after the ICO. Therefore, it is to be hoped that after a successful crowdsale, the project will have something of this nature to surprise the community with.