Rakugo (a name borrowed from the Japanese art of storytelling) is building a decentralized publishing and assetization platform that rewards content creators with revenue and exposure for their work, and enables them to manage their content as a secure digital asset. Rakugo provides creators with an Ethereum-blockchain-based platform for copyright management, publishing, and monetization.
Rakugo will enable content creators to monetize their work and track their content’s performance, empowering them to build their own personal brand. Monetization channels include: advertising channels; donations and tips using Bitcoin, Ether, or Rakugo tokens (with no fees); paid per-piece or monthly subscriptions for access to exclusive content (may also be available in local currency); and selling / auctioning shares of their creative assets on the platform’s Digital Asset Marketplace. Rakugo’s platform will additionally enable creators to crowdfund their creative projects by selling their assets or issuing tokens to funders via a Creative Public Offering (CPO).
Rakugo provides assetization via its ‘Kenzo’ engine, which creates a digital fingerprint of the content, which is then stored on the blockchain as an immutable and publicly readable record of copyright. The Rakugo publishing platform then rewards contributors with exposure and roydalties for high value, trusted content. Rakugo also utilizes a relevancy engine called ‘Shogun’, which uses machine learning on public data streams to quantify the global relevance of content published on the network, so as to maximize exposure and royalty generation. All of this technology is to be made available not only to tech-savvy users, but also to the less technically inclined, via an easy to use dashboard and a simple publishing flow.
Rakugo’s ‘Kenzo’ assetization engine issues custom smart contracts for managing the ownership and distribution of digital content, whereupon the copyright information is inscribed on an ERC20 token called Namespace, which then functions as proof of ownership notarized on the blockchain. With Kenzo, creators can set the terms and conditions under which the asset can be copied or exchanged, as well as limit the number of copies that can be made altogether. It is not clear how the Namespace tokens are transferred or split among contributors with a traceable history of ownership. It is also worth noting that, while the company’s whitepaper does not currently address tracking the use of assets (so as to alert owners to possible infringement), the founders say that they will implement detection and enforcement features, which will actively track the public web for unauthorized copies on behalf of creators and automatically take appropriate actions.
Revenue is generated when the content is published through Rakugo, and royalties are disbursed via a smart contract, where the Namespace token is used to attribute the correct allocation of royalties to its holder. Distribution occurs via a handshake where the Namespace token is sent to a smart contract and revenue along with the token is sent back to the token holder.
The Shogun engine tracks and analyzes trending topics across different data streams, including content published both inside and outside of the Rakugo network. It identifies trends and matches content to currently trending topics via a proprietary topic modeling algorithm (cross dependence temporal topic model, or CDTTM). Shogun is used to make recommendations to readers based on behavior and preferences, and to make SEO suggestions to writers based on sentiment analysis and trending keywords.
Rakugo’s own business model is built on ad revenue (to be shared with content and/or token holders as royalty), service fees for successfully completed crowdfunding projects, subscriptions for publishers using the platform for hosted content, service fees for processing subscriptions to premium content published by content owners on the network, and service fees for transactions and escrow services on the Digital Asset Marketplace. Half of ad revenue will go to Rakugo, while 20% will be distributed to token holders and the remaining 30% will be issued to holders of the content’s Namespace token. Token holders will receive 20% of the company’s top-line revenue in general; however, the company founders will also be holding on to 30% of the tokens.
Rakugo currently supports textual content such as blog posts, news articles, and eBooks, and will develop support for images, music, and video. The company plans to aggressively grow its monthly active user base and uses Medium.com, with 60 million monthly active users, as a standard for its valuation. (The whitepaper also references Buzzfeed’s valuation of $1.5B with 200 million monthly active users in 2016).
There are a number of blockchain copyright solutions which concentrate on tracking ownership and attribution, such as Proof of Existence based po.et (adopted by publications such as The Merkle, Crypto Insider, Coinspeaker, and ChainB; raised $10 million USD in about 3 hours in its recent ICO), or Ascribe, or even MediaChain’s open media library, not to mention numerous media-specific solutions for images or music. In comparison, Rakugo’s emphasis is more on exposure and royalty generation. As a blockchain-based publishing platform, Rakugo is probably most comparable to Steemit, which features voting on posts and allows contributors to be rewarded for upvoted content. Steemit hasn’t had an ICO, but as of May 2017, there were more than 170,000 Steem accounts, and as of August 2017, Steem tokens have a market cap of $270.79 million USD. Another comparable company is blockchain-based content and social media platform Synereo, which allows users to send currency directly to content creators regardless of the publication platform, and to be rewarded for helping others discover quality content. In October 2016, Synereo raised $4.7 million USD in crowdfunding, selling both equity and AMP tokens, and as of August 2017, Synereo’s AMP tokens have a market cap of $18.9 million USD. Another similar company is Brave, who raised $35 million in their June 2017 ICO in under a minute, and whose BAT tokens market cap is currently at $203.5 million USD. Brave offers an open source web browser that automatically blocks ads and trackers, with an integrated Bitcoin micropayment system since September 2016; Brave’s BAT tokens will allow users to collect rewards from advertisers for engaging with marketing content.
Rakugo is seeking to raise 20,000 ETH through an ICO of its Rakugo Seed Tokens. Rakugo Seed Token holders will receive royalty payments at a rate of 20% of top-line revenue (paid in ETH) each quarter. Token holders will also receive the right to purchase discounted tokens in a future equity round, if issued. The value of Rakugo Seed Tokens will be set by an external auditing firm and require compliance with SEC regulation.
What value do your seed tokens give other than 20% of the company’s revenue, and what are the future plans regarding token rights (in particular with regard to equity shares)?
Rakugo Seed Tokens give the token holder 20% of the company’s revenue as a payment every quarter. In addition we are making it such that Seed Tokens can be fully converted 1:1 for an equity and dividend paying token in the future; if and when we decide to issue one. This will be determined by the availability of regulatory frameworks being available to do this. Further, if we were to offer a higher volume of tokens for sale to raise a second equity based round, (As STORJ did) – we would offer a discount to Seed Token holders in that funding round for additional purchases. Tokens will also be accepted as a method of payment through the platform, and the Rakugo asset market place. We chose a revenue based asset due to the clear path to return on investment and direct link to valuable IP generation in the company, while not being equity based this has a significant upside as a crowdfunding instrument.
Please check out this update blog post to see more on valuations of our tokens.
Given that you base your estimated valuations on Medium.com or Buzzfeed, how do you envision Rakugo in comparison to the other blockchain solutions mentioned in our review?
This is a great question. So we view ourselves quite differently to other comparable platforms, both blockchain based and traditional. There is currently the following pain points that we are solving for traditional platforms. 1. Platforms like Buzzfeed and Medium.com do not allow for an integrated experience with monetization and rights management/copyright tools. Buzzfeed takes content and leverages its value for its own gain. Medium offers no plagiarism protection and lackluster publishing tools that does not grow beyond its own platform. In terms of other blockchain platforms like Steemit, we are fundamentally different. We are not only building a consumer publishing product – Rakugo – but also an enterprise API that will allow publishers to access talent on our platform, or use Kenzo as a backend for their own publishing networks. No one else in the market is working to develop machine learning capabilities for matching content streams and topic influencing/modelling in the way we are.
This blog address this questions as well.
Do you have a more detailed conceptualization of your Namespace tokens and assetization model (with regard to tracing of ownership, split ownership, types of smart contracts available, the ‘enforced rareness’, etc.)? Since the platform is supposed to be accessible to the non-tech-savvy, are there templates, for example?
Yes, we do and this will be released under the supervision of Michael (Chief of Product) and Henry over the next couple of weeks. We are also considering extending the crowdsale by 2 weeks to 6 weeks so we can try to release a POC during the sale. This will give detailed insight into the UI/UX experience by way of a prototype POC. In terms of Kenzo we will have our existing POC ready to demo and we can share when it is ready.
Have you considered using a third-party assetization platform (such as po.et) and running your publishing platform and search engine on top of it instead? What are your considerations? Will your Digital Asset Marketplace work only with Namespace tokens or could it possibly include others as well?
We have looked deeply at all aspects of the platform that we are building and decided that there were a core set of components that we have and want to continue to build in-house and own that IP for token holders. Assetization is one of those, we have given considerable consideration to scalability and pipeline with the volume of content we are targeting and we want to own that technology stack. Namespace tokens will be used as the unique identity of each piece of tokenized content and are unique to each user and their content. For example: if a person was to publish an eBook on the impact of ICO’s on traditional VC finance the token representing this content could be classed under the namespace designation as: ‘person.ebookico2017analysis’. With this person being the ‘namespace’ identifier of the token. This could also be a brand or label such as ‘company.document1’; these tokens will be ERC20 standard and will be how content is issued and or stakeholdings created in an asset or CPO (Creative Public Offering). We will be looking at cross chain solutions as we develop the product, counterparty being one of these cross-chain options. We certainly could offer the listing of other tokenized assets on our marketplace and will be open to that in the future if the opportunity arises.
Do you plan on offering services for helping creators track down uses of their work (like pixsy), or helping them to resolve disputes (since blockchain proof is still legally shaky), etc.?
Yes, we 100% will be providing tools for enforcement, we see written content, blogs, articles, ebooks, books as a stepping stone to images, music, and video in the future. We will be partnering with 3rd party services to offer plagiarism detection and enforcement as an integral feature on Rakugo and it will be made available to all users.
You plan on selling 60% of the Seed Tokens, while 30% will go to the founders, 7.5% for options, and 2.5% to the community. This division reflects the use of these tokens as revenue (and possibly equity) shares only, bringing us back to the first question – will there be any other use for them? Are they not being used to grow the community? What do those 2.5% mean? And what do the 7.5% for ‘options’ mean at this stage?
Options are used in the way stock options are used in a traditional startup and in corporate partnerships. Employee options only vest over two years in the same way founder tokens do. They will be used for employee compensation packages as we grow as well as partnerships.
Community tokens are being used in a small allocation at the start of the ICO (up to 1%.) Thereafter, the remaining tokens will be used as an incentive to new users of Rakugo – this will be by means of a faucet.
Have you noticed the similarity between your logo and EOS’? Is that on purpose?
I have to laugh, yes we do, this was certainly not intentional and we had designed it long before we had seen EOS released. Definitely not on purpose and it was part of our love of geometry. We may rebrand in the future to create a more defined point of difference.
Have you considered bringing in some additional blockchain expertise?
In addition, Wyatt has been coding in Solidity for some time and has long term distributed systems and machine learning expertise. Having Michael in Berlin means we have access to world class blockchain talent that will be attracted to Rakugo. We will be looking to bring on blockchain expertise both in Berlin and San Francisco when we complete our funding round and grow the team. Our current technical team has long term product and engineering chops with a good experience in blockchain and building scalable distributed systems in functional products. We are very active in the community in San Francisco and have access to great talent on our network for advice and collaboration.
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