There are plenty of metrics to evaluate the prospects of blockchain projects but one of the best is does it tie into an existing and successful business?
On the basis, MindArk’s plan to launch its DeepToken (DTA) and use the proceeds to develop an asset exchange, a bank, and an accelerator program are ambitious but built on the solid foundations provided its 15-year-old virtual world Entropia Universe.
We’ve been running a virtual economy with fiat cash-out in Entropia Universe since 2003
As David Simmonds the company’s vice chairman, business development points out, “We’ve been running a virtual economy with fiat cash-out in Entropia Universe since 2003, so we’re fairly expert in this field.”
Indeed, Simmonds is also fairly low-key about about the wider impact of blockchain for MindArk. Unlike the wild claims from many blockchain exponents, he instead describes the rewards of DeepToken as being “beneficial” for MindArk rather than transformative.
“We already have 3 million registered accounts so we have to make sure adding anything new into Entropia is positive for our existing players,” he explains.
Taking the low-hanging fruit first
In this way, despite the up-to-$100 million MindArk hopes to raise through its DeepToken sale which starts in early May, the first implementation of DTA will see it plugged into Entropia’s existing cash-out system.
Currently players buy the in-game currency Project Entropia Dollars (PED) at the rate of 10 PED to US$1. These can be used within the game to buy land and other items, with all in-game items also tradable for PED. Significantly, though, Entropia has always supported the ability of players to cash out their PEDs for fiat currency.
Due to anti-money laundering issues and credit card friction, this is a slow and fairly expensive business. Enabling players to cash out their PED for the blockchain-based DTA (which is ERC20 compliant) will make that process faster and cheaper so the impact on Entropia’s loyal player base should only be positive.
“What we can demonstrate is we’re not a startup with a crazy idea,” Simmonds continues.
We’re not a startup with a crazy idea. We’ve got an existing business and DeepToken will be a utility with immediate use
“We’ve got an existing business and DeepToken will be a utility token with immediate use.”
Of course, while it’s good to have an immediate use case, the ability to raise $100 million does require something more, and that’s where the ambitious elements of MindArk’s plan come into play.
First up will be what it labels its Intellectual Property eXchange. Again this will initially be seeded with in-game assets from Entropia Universe. MindArk plans to release three new planets and as part of this process it calculates assets ranging from 3D models to textures, animations, audio etc worth around $3 million will be added into the IPX.
With revenue streams controlled by smart contracts and paid for using DTA, the IPX will enable anyone anywhere in the world to buy these assets for their own game development.
“You’ll be able to build an entire game immediately using the IPX,” Simmonds predicts.
Eventually MindArk hopes the IPX will become a marketplace for a wide range of assets, ranging from games to music and 3d printing files. The company will further support this through its accelerator program which will fund developers who come up with interesting projects using the IPX.
Owning the bank
The final piece in the DTA business plan is perhaps the most ambitious, a blockchain-capitalized bank.
Yet, given MindArk’s experience with real money transactions, it transpires it already has a lot of experience in this area.
“There are over 1 billion transactions a month in Entropia Universe and players deposit a lot of money,” Simmonds explains.
“As a Swedish company we can’t provide the level of guarantees that a bank could, and that’s why we previously applied and gained a full banking license.”
MindArk didn’t actually establish its bank due to the 2008 banking crisis but the launch of DeepToken has provided it with another opportunity to fulfil its goal of being a proper bank; one that offers accounts, credit cards and even loans that could be backed by virtual items or IP from within Entropia Universe.
“We will be pushing the boundaries in terms of having a bank capitalized by DeepToken and based around the blockchain and smart contracts, but we’re confident about it,” Simmonds says.
It all adds up to a blockchain project that’s an interesting mix of ambition and grounded conservatism.
And for Simmonds, the bottomline is clear. “We want to make Entropia Universe quicker and better for our players,” he says.