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Bizkey Wows at Crypto Competition
Release time：2018.12.12 18:40
Author：Back to list
Last weekend, Bizkey’s BZKY token won the award at Cryptofest 2018 for Best Creative Design. Naturally we were thrilled that our token was getting recognition. Anticipating a market crash caused by the bugs of the ICO fundraising model, we got hard at work to create a “climate-proof” utility token that could weather the incoming storm of misaligned incentives, bad actors, and runaway spending. While other project’s tokens are going through the floor, Bizkey’s token holders are staying put; there simply is no rug to be pulled out from underneath them, as our token holder’s best interests are perfectly aligned with equity. Tokens may have been merely a fundraising tool in the crypto world, but they are inseparably integrated and a necessary part of Bizkey’s business model. To explain the resilience of the BZKY token, we must first zoom out and look at the big picture of Bizkey’s value proposition, which aims to solve two big problems in retail.
The Crypto POS Problem
While there are POS devices capable of accepting crypto payments, the simple truth is that merchants will forget how to use a POS device if they don’t use it frequently. How often does a retailer have a customer who prefers to pay with crypto? Not very. The bottom line is, crypto POS devices will collect dust in a storage cabinet unless they see constant use.
Retail’s Big Data Problem
Currently, there are a small number of ecommerce and big box retailers that act as retail data monopolies. If you live in the US or China, there is a good chance that either Amazon, Alibaba, or Tencent know your name, address, transaction history, consumer habits, expendable income, preferences, contact info, etc. They are aware of market trends as they happen and have a bird’s eye view of everything retail. This data allows them to optimize their businesses to deliver the right product at the right place, at the right time.
Now compare these giants to the mom-and-pop stores. What should they stock their shelves with? What should they charge? How do they connect consumers nearby to the products they want, beyond a sign in their window? All across Asia there are innumerable small and micro sized businesses that buy items off Tao Bao and hawk them at whatever price they arbitrarily set.
To close the sophistication gap between Amazon and the auntie down the street, we need a platform to roll out scalable business intelligence solutions. Merchants need to be able to find BI tools that fit their region, market segment, and other customizations. That’s what we’re developing at Bizkey. While some solutions will be fine as stand-alone modules, Bizkey will need access to plenty of data to help optimize shelf space, ordering, prices, etc.
Will Amazon sell us their transaction data? Will Alibaba let us peek into their databases? Probably not.
But while it never hurts to ask, there is an alternative. If we can convince a threshold of merchants in a region to give us their transaction data, we can return business intelligence tools to help turn their stores into smart-stores. In the past, small data assets were too esoteric to be quantified and collected across a diverse span of enterprises, but with tokenized rewards tradeable on exchange, the value of data is made real even to the most unsophisticated shopkeeper.
These small sets of transaction data paired with scrapable online data and integrated into a consumer app are ready for machine learning algorithms to find what consumers are looking for and help them find it at the nearest brick-and-mortar retailer.
Bizkey’s BZKY Token Solution
The BZKY token kills two birds with one stone. By using our POS or API, we can collect the transaction data from agreeable merchants and reward them with our tokens. With the transaction data, we can produce actionable business intelligence for our merchants. And of course, while merchants are using our product, they can accept crypto payment.
Think of it this way: transaction is mining. The higher quality and quantity of data provided from merchants, the more Bizkey tokens merchants are rewarded with. Upon reaching 30,000 participating merchants, 3 million Bizkey tokens will be rewarded daily, split among the merchant base. As the ecosystem expands, the rewards are stretched thinner, but the value of the tokens increases. These rewards will continue for 3 years, giving a total of 3 billion tokens, or 30% of our token pool. The Bizkey Foundation will then step in and decide how to continue the reward system according to market conditions. Additionally, we have set aside 5% of BZKY tokens for merchant acquirers who help us onboard their merchants.
So, what do the tokens do? Merchants can stake them to receive discounts on our Business Intelligence, Quality of Life, and payment services. Every $2 worth of tokens staked will give $1 off their bill, up to 40%. The longer the staking period, the higher the discount. For example, a merchant who spends $100 on Bizkey services can receive a 40% discount by staking $80 worth of tokens for 6 months.
Keep in mind that while the token price will fluctuate over time, our generous discount protects merchants from price risk. As the price increases, merchants will need to stake less tokens to achieve an equivalent discount as the previous period, enabling them to sell their excess tokens. Merchants will profit if the price rises, save money if the price declines, and only lose money if the price declines by more than 50%.
The token design allows for easy valuation methods. The token pool is a claim on discounts, with the token market cap being the expected value of future discounts given to our merchant pool. An investor can estimate how many merchants we will serve, how much they will spend on our services, for how long, and create their own valuation based on these assumptions.
The key drivers for the BZKY token are the quality and quantity of our data, payment and BI services, and customer base. With merchants chasing the highest discount of 40%, the token design pours 40% of Bizkey’s revenue into the token pool. In other words, token value scales just like equity, eliminating conflicts of interest between the two investor classes.
Merchants have an incentive to onboard their friends, utilize Bizkey products, report bugs, give feedback, and conduct general brand ambassadorship. Finally, this dividend via discount model plants BZKY firmly in the utility token category. This resilience, utility, and alignment of interests explains why Bizkey is beginning to receive recognition in the burgeoning field of Tokenomics and is exhibiting low volatility while the rest of the marketplace collapses.
We’ve just completed the first round of our Milestone Coin Offering and are looking forward to the 2ndround next year when we have more products to show for our efforts. Until then, keep an eye on our social media for more updates!