ETH888 ETH888.IO. Asian ETH888 Casino. Prepared for: ETH ICO Prepared by: Steve 7 September 2017 Version 1.9.9

Transcription

1 ETH888.IO Asian Casino Prepared for: ETH ICO Prepared by: Steve 7 September 2017 Version 1.9.9!1

2 ETH888.IO EXECUTIVE SUMMARY 1. Revolutionary Enhancements in Betting Cost and Operational Transparency 1.1 How Cryptocurrency Reduces Betting Cost 1.2 Restrictions in Result Fairness Verification 1.3 Advantages of Smart Contract Application 1.4 Core Development Direction 2. Revenue Model 2.1 House Edge 2.2 Game Genres 2.3 Why not 0% House Edge games? 3. Vanil Token and Vanil Pool 4. Marketing Strategy and ROI Analysis 4.1 Market Potential 4.2 Promotional Strategy 4.3 ROI 5. Capital Raising 5.1 Ethereum ICO 5.2 ICO in 3 Stages 5.3 Capital Expenditure Distribution 5.4 Timeline 6. Team 7. References!2

3 EXECUTIVE SUMMARY In 2016, online gambling industry values up to 45 billion USD. With the rapid growth of the Internet population and its infrastructures expanding, momentary from Asian markets contributes a significant proportion of the total market value. In this industry, here comes two major issues: fairness and privacy. Players in general have insufficient transparency to verify or trust the result s fairness, forming a barrier for trust and loyalty buildings. Moreover, previous generation online casinos request players registering with real identity, to facilitate fund transactions from bank, also an obvious barrier against new comers stepping in. With the availability of Ethereum blockchain technology and cryptocurrency, we do believe the industry going to have destructive changes! ETH888 will be a first Asian Ethereum based online casino, with high operational transparency and privacy. In the world of blockchain, smart contracts play an indispensable role in exercising tasks absolutely and transparently. Indeed, all core logics of ETH888 are programmed into the smart contracts which are 100% transparent / open source in a block. Every one can get access to it via block explorers and see how it operates in an expected way. Fully transparent sometime seems to be a drawback, but is actually a great trick to build trust with all players. Let them know how ETH888 operates and makes profits, to eliminate doubts between us, further consolidating the revenue model. In player s point of view, Two most crucial issues in a game are: result randomness and prize distribution. These are fully executed by and binding with smart contracts, in which everyone can check how the random results are generated and verify the past results also its fairness. By applying smart contracts, the cost for each game requires less and also fairness is guaranteed. In prize distribution, it utilises the advantage of cryptocurrency, instant fund withdrawal, in which only very low transaction fee applies and is completely anonymous, no registration required. ETH888 Team strives for developing the first Asian decentralized casino, with highest transparency and reasonable House Edge. Our rationale is, by gaining trust from the players, and letting them realize all results generated are provably fair, just like online game enthusiasts investing virtual assets, the existence of reasonable House Edge becoming totally acceptable. If House Edge does not exist, there must be no more casinos in Las Vegas. The ironic truth is that, when you go in a casino, the story behind glorious decorations is, players are expected to pay for it and enjoy the games. They are not really hesitate to lose the game, but do concern nowhere to place their bets!!3

4 ETH888 s Highlights 40% of total house profit will be monthly pouring into Vanil pool, in which Vanil token holders can share some amount of profit directly proportional to how many Vanil tokens they own. In operation, everything is transparent under smart contracts, such as profits from each bet and total house profit. Vanil pool s management is preprogrammed and forever unchangeable, so to ensure no frauds occurred due to human factors. First Ethereum based casino targets Asian markets. Asian themed games, such as 魚蝦蟹, 大細 and 西遊 角 子機. Maintain House Edge around 6-16%. Comparing with previous generation online casino Ordinary Online Casino Bitcoin Casino ETH888 No registration required Unsupported Supported Supported Freely deposit / withdraw Unsupported Supported Supported Instant fund transaction Unsupported Supported Supported Completely anonymous Unsupported Supported Supported Provably fair results Unsupported Supported Supported Fully verifiable results Unsupported Unsupported Supported Smart contract integrated Unsupported Unsupported Supported Decentralized Unsupported Unsupported Supported!4

5 Capital Raising Approach The total circulation volume of Vanil token is 15,500, % of it will be reserved to the development team and another 10% will be for rewarding advertisers in social networking platforms / forums. The volume for ICOs is 12,400,000: Stage Release Quantity Rate 1 10,000,000 1,250 Vanils / ETH 2 2,000, Vanils / ETH 3 400, Vanils / ETH To assure the benefits of investors / stakeholders, our ICO plan is more than one-off. The next ICO will never start before all promised / compromised milestones in the previous stage are achieved. To be fair, the cost for earlier investment will be more worthful as indicated in the rate column. Besides, as the circulation volume of Vanil is fixed, with the business scale mushrooming and thus higher amount of monthly return achieved, Vanil token has a foreseenable potential of getting much higher market values in the coming future.!5

6 1. Revolutionary Enhancements in Betting Cost and Operational Transparency 1.1 How Cryptocurrency Reduces Betting Cost In most online casinos, fiat currencies such as USD and EUR are the mainstream tokens, and it takes time and significant transaction fees for withdrawal. Also, it involves privacy issues as fiat currencies are being regulated by related governmental authorities. In 2008, upon the birth of Bitcoin, it really did positive impacts to online casino industry, including low transaction fees, time cost and higher level of privacy protection. Even some Bitcoin based casinos keep their House Edge at around 1% to attract new comers. All these explain why the market keeps growing up. Nowadays, there are over 100 cryptocurrency based casinos operating and the total revenue is up to 10 billion USD, mushrooming every year. In fact, over 60% of Bitcoin transactions are gambling related. However, they still have an unsolved issue: transparency. Even through the cost per bet is much lower comparing with ordinary fiat currency online casinos, as they keep House Edge as low as 1%, a very factual question, how can they survive? This is a smart trick to shift player s focus: so called random result for each bet. Example fraudulent scenarios can refer to here and here. Therefore, once a casino still operating in a dark box, the transparency issue keeps unsolvable and impossible to consolidate trust with players. 1.2 Restrictions in Result Fairness Verification In ordinary online casinos, all results are generated by their machines / servers, undoubtedly lacking of transparency and fairness. There are zero protection to the benefits of all players. In view of this, a newer generation of online casinos enhance this by upgrading the existing dark box mechanism by providing an encrypted hash to the player before deciding a bet, and the player can provide a hash to the server as well for result generation. The whole!6

7 thing becomes much interactive and seems like the casino having no way to cheat the player by referencing player s decision. Encrypted hash by house Composer Result Hash by player Some people may ask that, if the player already master the formula for result generation and is also given the server-side hash, they can predict the result and the house will lose big money? Definitely not. The hash given by the house to the player is encrypted by a mathematical algorithm called SHA256. One of its stunning features is singe-direction encryption. Once a string is encrypted, it is irreversible and undecryptable. Source hash SHA256 Encrypted hash This mechanism looks like pretty fair to all players. However, a factual question again, who would run a non-profitable house? They are well studying player s behaviour! Once they published a trustful impression to the public, the players feel comfortable to place bets there and usually ignore having to input a new hash for result generation. After being ignored several times, the house may detect it and secretly suggests one that favours themselves. The old scenario comes live again!!7

8 Apart from result fairness, the house can deactivate player s accounts anytime. That is a very unfortunate and worst experience. That kind of action obviously involves human operations, yielding so much uncertainty, seriously deteriorating the benefits of all players. Therefore, decentralisation and smart contract integration are an indispensable element to nowadays online casinos! ETH888 is definitely aligning with this direction. 1.3 Advantages of Smart Contract Application Against the inborn issues of traditional online casinos, we are missioned to integrate Ethereum technology to have a first Asian themed blockchain casino online! All core operation logics will be implemented via smart contracts. Everything becomes highly transparent and expectable. All ETH888 stakeholders will be the winners! Since the birth of Ethereum in 2015, its smart contract deployment capability brings a completely destructive impact to online gambling industry. It is actually an electronic contract stored in the public chain of Ethereum, at a specific location indicated by its address, a long string, and every logic inside is preprogrammed. Anyone can read the details, such as logic source codes, all transaction records and balance, inside a specific contract by providing an address string. None of casinos in the world can operate at this level of absolute transparency. As the transaction records are highly transparent, some may worry about the privacy issue again. Indeed, in blockchain world, it totally decouples with the Internet IP. What can be seen is, A transferring a certain amount to B. But who are A and B, no one knows. In our ICOs, we are also using Ethereum smart contracts to accept Ethers. It ensures the process running highly transparent and every Ether must exchange for Vanil tokens. For all published tokens, it complies with ERC20 protocol and the liquidity is guaranteed. Hacker attacks are surely a big issue to operate a public platform. The situation is like you building a door and invite people around the world to open it without the key. The advantage of applying blockchain technology in this case is, there will be unlimited number!8

9 of doors for the hackers. To conquer it, they have to break at least 51% of doors! Certainly, unless the return extremely high, otherwise no one will make this deal. 1.4 Core Development Direction Apart from smart contract integration, to ensure ETH888 providing excellent experience to all players, we will apply the best practice in provably-fair result generations under blockchain environment. At the same time, while enhancing operational transparency, we will take an equilibrium point to prevent being cheated by professional players, to protect the benefits of all stakeholders. Because the scenario will be betting against a large group of players, we must strictly control and monitor the betting upper limit of our games, initially ceiling it at lower amount and adjusting the limit incrementally, by analysing game data collected with time going. One key principle is that never makes the prize amount comparable to the cost for mining a block. In generating provably-fair results, it is quite challenging in blockchain world. In a centralized environment, getting a random number is a piece of cake, by simply calling a function. However, in blockchain environment, everything is deterministic and indeed no inborn random factors exist. Some casinos use block hash, a unique long string to identify a mined block, as a random hash to generate a so-called random result. However, this leaves a chance for miners to cheat the upcoming result, by giving up a currently mined block, given the prize return crazily huge enough (much variable than an Ethereum block). After a series of discussions among ETH888 team members, we finally figured out a moderate workaround. By generating random seeds from a hidden node and corresponding encrypted hashes being deployed to the mainnet, before placing a bet, the player will be given the encrypted hash of their bet. After result announcement, the hidden node will publish the source random hash of corresponding encrypted hash to the mainnet, so the player can verify the result fairness by encrypting the source random hash once by SHA512 and checking whether it matches with the encrypted hash given before making bet decision. ETH888 will provide some web-based easy tools to facilitate our players in this extent.!9

10 2. Revenue Model 2.1 House Edge House edge is to mathematically describe the advantage of the house against the players on a game being played for a definite duration of time. This indicator is to ensure the ROI of a casino. Taking Roulette as an example, assume that a player places $10 bet on black pinball, and the outcome is green one, neither red nor black one. The house edge of this scenario is 1 / ( ) x 100% ~ 2.7%. By probability, 2.7% here means, the player expecting to lose $0.27 per game. If keeps playing the same game rounds, and stake per round is $10, the player is expected to lose $5.4 to $8.1 eventually. Certainly, this is only a mathematical model and doesn't accurately reflect the fate of a specific game. With time going, this will become a trend and the casino will surely get positive ROI by probability. For House Edge of the other games, you may refer to here. 2.2 Game Genres At the first stage, we are planning to have 3 Asian themed games:!!! 魚蝦蟹 大細 西遊 角 子機!10

11 2.3 Why not 0% House Edge games? ETH888's rationale is that, in player's points of view, playing with a trustable partner is superior. Especially for Asian players, they in general do not care the existence of House Edge, but do care whether they are being cheated. They merely look for opportunities to seed hopes, given a reasonable chance to win and an easy-fair environment to have a try. Deep in their mind, the worst issue is nowhere to buy hopes, rather than finally losing it. They do enjoy more the process and strive for feeling of one-game victory, even by trading off the bets over ten games. Some casinos emphasize zero House Edge, with a doubtful assumption, treating it as a gimmick to make the house attractive to the audiences. They assuming even with zero House Edge, it will also be profitable by blessing elite players making mistakes or beginners will compensate the loss. Indeed, it is impractical, as unlike physical casinos, there are no restrictions on how the players interact with the games, such as getting real-time AI hints from gambling master softwares / devices (like this and this). Undoubtedly, every player can instantly be a game master. Does it sound an attractive business to stakeholders? Or does anyone have interest to spend time and resources in operating a casino with negative ROI?!11

12 3. Vanil Token and Vanil Pool Vanil token is published basing on Ethereum technology and complies with ERC20 protocol. Simply to say, a wallet supporting Ether can hold tokens published by individual organizations, to represent their ownership or level of participation in a community or project. In some case, tokens can be consumable when interacting with corresponding platform s services. In the current roadmap, ETH888 only accepts Ether. 40% of monthly house profit will be pouring into Vanil Pool which is a profit sharing core for all stakeholders. This action is preprogrammed in a smart contract and unchangeable after launching so to avoid fraudulent cases yielded from human factors. Vanil holders can take shares from Vanil Pool on 28 at 12:00 UTC of each month. This instruction will be absolutely exercised by the smart contract deployed in Ethereum s mainnet. The whole operation is totally transparent and will be fair to everyone. Example: A invested 100 ETH for 125,000 Vanil tokens and the total profit of ETH888 in that month is 140,000 ETH, so 56,000 ETH (0.4 x 140,000) will will be poured into the sharing pool. The total circulation volume of Vanil token is 15,500,000, so A will get 125,000 / 15,500,000 x 56,000 ~ 451 ETH as his reward in that month.!12

13 4. Marketing Strategy and ROI Analysis 4.1 Market Potential Online gambling industry nowadays values nearly 46 billion USD and in 2018, is estimated up to 56 billions. This indicates more and more players intended to participate in the games with cryptocurrencies. Now, more than half, around 60%, of Bitcoin transactions are gambling related, but the industry is facing two major challenges: The house has unfair advantages to control the results, totally far from definition and scope of House Edge. Players need to afford significant transaction fees and takes time for fund withdrawal. In the process, it also involves privacy issues. We do believe that technically the above concerns must be tackled, with a view to play well in this fast growing and promising industry. Comparing with previous generation online casino: Ordinary Online Casino Bitcoin Casino ETH888 No registration required Unsupported Supported Supported Freely deposit / withdraw Unsupported Supported Supported Instant fund transaction Unsupported Supported Supported Completely anonymous Unsupported Supported Supported Provably fair results Unsupported Supported Supported Fully verifiable results Unsupported Unsupported Supported Smart contract integrated Unsupported Unsupported Supported Decentralized Unsupported Unsupported Supported!13

14 4.2 Promotional Strategy ETH888 will be the world s first Asian themed Ethereum casino, featuring absolutely high transparency, fairness and privacy. In the early stage, we will strategically adapt players already with competent knowhow in using cryptcurrency, and let them realize the pros of smart contract integration, and how it enhances the transparency and fairness of the games. In addition, our technical members will share and publish blockchain related articles in social media platforms, so as to boost the exposure rate of the official site, and also helps SEO. In the next stage, third-party exchange platform like Shapeshift will be integrated into ETH888 for supporting more species of cryptocurrencies, even cash finally (prior to the approvals of lottery licences covering related regions). With that achieved, the next milestone will be grabbing players from ordinary online casinos, our final battlefield to possibly get the largest market shares. Upon the success of all ICOs, the team will spend resources on three main areas, platform development, legal procedures and marketing. Moreover, all internal testings, organisation reformation and legal procedures are planned to be complete within the following 6 months, and a series of new marketing campaigns will be published in most popular coin exchanges. Furthermore, we will distribute Vanil tokens from 10% reserved pool as the incentives to encourage people sharing our articles and posts. Our advantages are, comparing with our business competitors in Asia, making changes to the industry much earlier. When cryptocurrency becomes the majority, chance will be given to those who are well prepared, just all of us!!14

15 4.3 ROI A good deal always couples with good returns. Before you investing in something, if one telling you the principal will be 100% guaranteed safe, plus 300% return, do you believe that? Or you are probably facing a fraud!? It is so common to hear a phrase too good to be true in speculative investment market. The meaning behind it is pretty simple but greed can blind one s mentality and thus would unintentionally trust those illusive scenario. Afterwards, the victims even do not dare to share the story, due to reputable concerns. ETH888 Team deeply believes that, there is no free lunch in the world. To be a victor, apart from working harder than the competitors, good timing is indispensable too. Dare to imagine how future goes and do the right things at the right time, all our core values! Different from investing in stock market having P/E ratio as reference, even we merely promising a number here, does it sound convincing? What we can offer here is a vision: conservatively to say, in 2018, the market cap of Ethereum will be up to 40 billion USD. Assume that, just half of Bitcoin, 30% of global transactions are gambling related and ETH888 has 6% market shares. The total turnover already achieves 720 millions and our House Edge is kept at around 10% in average, the estimated profit already around 72 millions. This only assumes all players betting once and if they play twice, it will be double. For a investment less than 10 millions, is this vision promising?!15

16 5. Capital Raising 5.1 Ethereum ICO The first stage ICO (Initial Coin Offering) will start on 11 August 2017, at 00:00 UTC, using Ethereum smart contract. All interested investors should send Ether to the smart contract in exchanging for Vanil token which complies with ERC20 protocol and has the following advantages: High security and predictability Supported by most Ethereum wallets Highly exchangeable to other cryptocurrencies High transparency and guarantees stakeholder s benefits up shares owned The total circulation volume of Vanil token is 15,500, % of it will be reserved to the development team and another 10% will be for rewarding advertisers in social networking platforms / forums. The volume for ICOs is 12,400,000: Stage Release Quantity Rate 1 10,000,000 1,250 Vanils / ETH 2 2,000, Vanils / ETH 3 400, Vanils / ETH To assure the benefits of investors / stakeholders, our ICO plan is more than one-off. The next ICO will never start before all promised / compromised milestones in the previous stage are achieved. To be fair, the cost for earlier investment will be more worthful as indicated in the rate column. Besides, as the circulation volume of Vanil is fixed, with the business scale mushrooming and thus higher amount of monthly return achieved, Vanil token has a foreseenable potential of getting much higher market values in the coming future.!16

17 5.2 ICO in 3 Stages As above mentioned, there will be 3 stages for capital raising. The next stage of ICO will only start upon all milestones achieved promised in the last stage: Stage 1-10,000, ETH / Vanil Expand the team by inviting front-end game developers, graphical asset design talents and internal testing staff. Integrate result verification mechanism to all games and provide verification tools for all end-users, so that all results are verifiable and all players will feel comfortable to play games with us. Deploy 魚蝦蟹 to Ethereum's testing chain (Ropsten) and undergo stress tests. Enhance transaction efficiency and user experience (UX) as well. Afterwards, the game will be deployed to Ethereum mainnet and operates publicly. Stage 1 investors will start to have 40% of house profits from Vanil pool in Q Stage 2-2,000, ETH / Vanil Next to 魚蝦蟹 game, 大細 (Sic Bo) will be developed and deployed to Ethereum's testing chain to undergo a series of stress testings and network security enhancements. Code the core operational contracts in Solidity and has it deployed to the testing chain, so that all contract codes will be transparent to public and assure the benefits of all stakeholders. Stage 3-400, ETH / Vanil Testings complete, 大細 will be published to Ethereum's public chain. ETH888 officially operates and accepts bets from the public. The operation team will put more effort in monitoring and analysing the house edge and adjust game's status when unusual situations occur, in order to put stakeholders' benefits in top priority.!17

18 5.3 Capital Expenditure Distribution Expenditure of capital raised from ICOs will be allocated as follows: Prize Capital 20% Development 30% Legal Services 15% Operation 20% Marketing 15% Development:Includes technical development, internal quality assurance and beta testing. In addition, User Experience, User Interface, graphics and promotional material designs are also within this scope. Marketing:Publishes online advertisements in associated media platforms, like Bitcoin exchange platforms. Rewards the post pushers in social networking platforms and related forums. Operation:Customer service and system maintenance. Legal Services:Startup registration costs, casino licensing, law company which deals with cryptocurrency legalities. Prize Capital:Ethers bankroll to pay all winners.!18

19 5.4 Timeline Below is the time frame summary before official launching: 21 July 2017 Public announcement of ICO proposal 11 Aug 2017 Stage 1 ICO starts. 30 Sep 2017 Stage 1 ICO ends. 2017, Q3 Technical demo showing blockchain based provable fair betting live in Ropsten testnet. 2017, Q4 Stage 1 milestones complete: 魚蝦蟹 alpha version live in Ropsten. 2018, Q1 魚蝦蟹 release version live in mainnet, platform launching to the public and in operation. 2018, Q1 Vanil pool management smart contract development and deployment. 2018, Q1 Stakeholders in Stage 1 ICO share 40% profit from Vanil pool. 2018, Q2 Stage 2 ICO starts. 2018, Q2 Stage 2 milestones complete: 大細 alpha version live in Ropsten, Stage 1+2 ICO investors share profit from Vanil pool. 2018, Q3 Stage 3 ICO starts. 2018, Q4 Two major games: 魚蝦蟹 and 大細 release versions live in Ethereum mainnet, stakeholders in Stage ICO share monthly house profit being assigned to Vanil pool. For each completion of an ICO target, development keyframe document will be released to describe the implementation plan detailedly.!19

20 6. Team Steve White Steve is an Australian mathematician, inspired and motivated by Bitcoin concept in 2008, he privately researches the foundation of peer-to-peer network communication technology. After that, he participated in cryptocurrency development community GameBet and designed several proof-of-work algorithms. Apart from being an enthusiast in Asian cultures, Steve has strong interest in ETH888 development and partners with Gordan, another founder of ETH888, to empower this knowhow in online casino operation, especially focusing on how the platform supports more altcoins and captures more market shares. LinkedIn 崔志堅, Gordan Gordan was a product developer, one of core members in SunBet (138safe.net). He has deep understanding in how traditional online casino operates, and rich expertise in analysing and managing player s behaviour and mentality. After committing to online gambling industry over a decade, he does believe that the era of the Internet 3.0 (web3) will arrive soon and there will be a positively revolutionary impact to online gambling industry. Two years before, the first time he touched Ethereum technology. Since that time, he confidently trusts that this technology can destructively break the bottleneck mounted in nowadays online casinos, so he invites talents of the same interest from various areas and establishes ETH888. He is now a Chief Product Development Officer of ETH888. LinkedIn gordan@eth888.io!20

21 張麗婷, Lily Lily is the youngest and most creative member of ETH888 Team. In early years, she was studying visual art and communication, filling her with creative mind and strong aesthetic sense. After graduation, she worked in various digital agencies and executed social media promotional companions to worldwide renowned brands. Before joining ETH888, she was a big data analyst of an international digital agency. Her expertise also includes social networking advertising and search engine optimisation. At this moment, she also oversees the visual and interactive designs of ETH888. LinkedIn lily.zhing@eth888.io 葉葉永 青, Richard Richard is an ex-technical officer in houbi.com, Richard is very familiar with cryptocurrency from the ground up to how it works in principle. With this expertise, he worked in several famous exchanges located in Mainland China and integrated altcoins into the platforms to widen exchange s spectre. At the same time, he had to figure out strategies in preventing and defending worldwide network attacks to the exchange platforms. He believes that, with the prevalence of decentralization, comparing with a single endpoint, systems will operate with much higher efficiency and stability, and at the same time, protections to user s benefits will get larger coverages as well. LinkedIn richard.ye@eth888.io!21

22 George Colin George was born in Poland and being a computer game enthusiast over decades. When he was 13, he developed his first computer game written in C language and deployed it to BBS for free sharing. With the growing trend of casual games on smartphones, he stepped in that area and joined a famous game studio in Poland, Supercell. George has rich experience in developing casual games and also cross-platform web game technologies. Now in ETH888 Team, he plays a lead role in integrating blockchain technology into ordinary game development framework. george.colin@eth888.io 李峰, Peter Peter is energetic and an experienced web app developer in the team. He has rich experience in network application development, familiar with HTML5 / CSS / Javscript / NodeJS / AngularJS / SQL technologies. In technology point of view, he does believe that blockchain technology now has unrestricted spaces for pushing its popularity and there are many areas in this domain which he can contribute to. He is willing to take the challenges in transforming web2 to web3. In ETH888 Team, he mainly takes charge in web development and game integrations. peter.li@eth888.io 顧問 Green Smith, Chief Operating Officer@Gaming Club Gary Wang, Marketing Manager@Bet18 John Brenda, Chief Technology Officer@238 Casino!22

23 7. References Ethereum Project official site, Go Ethereum, Metamask official site, Status Mobile Ethereum OS, Kovan Testnet, Oraclize, Truffle Framework, House Edge introduction, House Edge comparison, Scamming case, dice-100-scam/ Blackjack software, Provably Fair concept, SHA 256 / 512 encryption tools,