TAPx WHITEPAPER

VERSION 2.0 / October, 2018

Created in collaboration with:

Newtown Partners is a blockchain investment and advisory services company that specializes in token economics, token sale design and demand generation. They operate out of offices in San Francisco, U.S. and Cape Town, South Africa. http://newtownpartners.com/

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Abstract We believe that through the introduction of a blockchain called TAPx - the forum blockchain - we will build on the work of the Tapatalk “Gold Points” reward system, and unlock the value of the forum ecosystem. The new TAPx network and its token, TAPs, will give forum users more power over their identity and reputation, more options for low cost peer-to-peer trade and forum owners more tools for governance and incentivizing desirable user behaviour. This is expected to increase forum user engagement, increase the amount and frequency of quality content creation and boost forum profitability.

The TAPx blockchain will align forum stakeholder incentives by ensuring that user reputation becomes persistent, reusable and transparent, that quality content gets quickly identified and rewarded, that users are able to engage in high trust and low cost peer-to-peer commerce and finally that the millions of forum owners out there today can retain control of their assets, through easy customization of the TAPx reputation, governance and trade features, .

By moving the Gold Points system to the blockchain, we envisage a massively distributed collection of crypto-based micro-economies using a collection of native TAPs and branded forum tokens, with each forum owner managing their forum’s microeconomy. This blockchain-based network will be introduced with no disruption to existing forum functionality, and will work with existing forum software.

Nothing in this document shall be deemed to constitute a prospectus of any sort, a solicitation for investment or investment advice nor does it in any way pertain to an offering or a solicitation of an offer to buy any securities in any jurisdiction. Tapatalk, Inc. expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the TAPx Whitepaper and Yellowpaper, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.

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Table of Contents Abstract 1

Table of Contents 2

Introduction 4

Background Market Research 5 Forum Community and Economy - Size and Activity 5 Forum Types 7 Forum Revenue Models 8 Current Online Community Incentive Models 9 Competitor Analysis 11

Facebook Groups 11 Reddit 11 Telegram 12

Token Economic Design 13 Forum Stakeholders 13 Token Objectives 13 Macroeconomic Design 15 Microeconomic Design 16

Bonding Curves 16 What is Token Bonding? 16 TAPx Bonding Curves 16

Incentive Implementations for Forums 19 Forum Characteristics 20 Forum Score 20 Content Reputation Score 21

Local Content Reputation Score 21 Global Content Reputation Score 23

Trade Reputation Score 24 Local Trade Reputation Score 25 Global Trade Reputation Score 27

TAPx and Forum Governance 28

Conversion of Gold Points to TAPs 30

Team 30

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Appendix A: Online Community Incentive Models 36

Appendix B: A Reference Micro-economic Implementation of TAPx 40

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Nothing in this document shall be deemed to constitute a prospectus of any sort, a solicitation for investment or investment advice nor does it in any way pertain to an offering or a solicitation of an offer to buy any securities in any jurisdiction. Tapatalk, Inc. expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained the TAPx Whitepaper and Yellowpaper, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.

A. Introduction Imagine a decentralized social network of hundreds of millions of people across billions of small, independent Online communities creating high-value content that is rapidly consumed & shared and belongs to those communities. Such a network would need to enable communities and their members to connect with one another in a manner that harnesses the benefits of shared trust, distributed effort and decentralized governance. Blockchain technology enables just such a network to become a reality and it is this vision for all user-generated content that excites us.

Online forums and message boards are the original social media with over 500 million people registered to one or more of the estimated one million plus forums worldwide. These communities are typically created, owned and operated by passionate individuals who care deeply about and have deep knowledge of these content areas. Forum topics span across thousands of interests and are comprised of people from all walks of life. These individually operated and widely distributed forums are rich in culture and have their own unique identities. Up to this point, the lack of a modern, scalable, multi-platform software platform that can enable a shared application layer for trust, recognition of contribution and esteem, a frictionless and low cost commerce capability and modern, scalable infrastructure across platforms, has created limits to growth and user satisfaction for forum owners, their users, and the technology providers to forums.

Previous commercial and open source attempts to unify this vast segment of independently owned and operated forums have failed due to a lack of incentives, trust, aligned interests and shared values. Attempts have been made to solve the individual components of the forum industry's most pressing needs, but nothing has been created at the scale and level of customization needed for networking existing communities while still enabling them to maintain their independence. The decentralized nature of blockchain technologies, for the first time, makes it possible to solve these problems.

Our goal with TAPx – the forum blockchain – is to leverage for the benefit of all forums, what Tapatalk has learned over the last 10 years from working with over 200,000 independent, Online forums with users in over 180 countries, especially what Tapatalk has learned through the implementation of Gold Points in Tapatalk Groups.

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Forums present the greatest complexities to be found in any user-generated content-based Online communities and in Online content publishing overall. By addressing and solving the key challenges for this industry, TAPx will also create a solution that enables any type of social media or content site to similarly benefit from the advances in reputation management, content management and low-cost peer-to-peer commerce made possible by blockchain technologies. This solution can also be as readily applied to the billions of posts and content pages that already exist on the millions of forums, commenting sites and online publications, as it can be used on new social networks and online publications.

B. Background Market Research Forum Community and Economy - Size and Activity Forums have been widely used since the internet entered the public consciousness in the early 1990’s. They provide an ordered communication environment with a sortable archive of history. This makes them useful in a variety of contexts, such as for knowledge-sharing, informal trading, interest discussion, and organization management. In spite of the rise of instant messengers and the nonlinear-style social platforms like Facebook, Twitter, Instagram and Snapchat, forums are still incredibly popular communication platforms today.

The forum user data shared here is from a 2015 Tapatalk Study and was collected from forums that installed the Tapatalk forum software plugin. Tapatalk collated post and user numbers on these forums and their Alexa rank over a 12-month period between 2014 and 2015. Economic data was sourced from Panjo, a startup that Tapatalk acquired in 2014. No personally identifiable user data was collected as part of this study.

The Tapatalk Study found that there are approximately 462 million user accounts across 180,000 forums that use the Tapatalk plugin. These forums had over 10 billion posts over their 1

lifetime. According to Statista, this places the size of the Tapatalk forum ecosystem on a scale similar to Reddit or Twitter. Tapatalk estimates that its current network of 200,000 forums constitutes 20% of the 1+ million total forums in existence.

The average individual Tapatalk user is registered on 1.5 Tapatalk-enabled forums. This suggests that Tapatalk’s ecosystem includes over 300 million unique individuals who use (or have used) forums and these users register over three billion page views per day. This suggests that the entire forum ecosystem constitutes over 1.5 billion people, a massive audience, rivalling that of WhatsApp or YouTube in size. This is also a large amount of content that is being consumed, but not currently capable of being well monetized, most often through banner and text ads and sponsored posts. The TAPx network has room to expand quickly further than Tapatalk through opportunities such as bringing VerticalScope forums into the TAPx network. VerticalScope boasts over 100 million unique monthly visitors and 500 million monthly

1 These are forums with at least 10,000 posts and the Tapatalk plugin installed. If one also included forums with fewer than 10,000 posts, then the total number of accounts would likely be over half a billion.

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pageviews, spanning a variety of different online communities. VerticalScope is also an investor in Tapatalk.

The dramatic rise of instant messaging and social networks over the past decade made many people question whether forums would maintain their communities, especially when some of these newer technologies offered group messaging functionality. Forums have not only survived this competitive threat, but have actually grown niche interest content production and associated peer-to-peer economic activity. In fact, the average daily page views on Tapatalk-enabled forums increased over the twelve months of the Tapatalk Study by more than 70 million page views per day. Many forums still appear in the top 1,000 websites for Alexa rankings and their positions have even improved over the past year . 2

Forum size and level of user activity varies significantly. There are a few forums with over five million members using the Tapatalk plugin, such as XDA Developers. Most forums on the Tapatalk network have less than 10,000 members (registered users). Daily user activity is spread across forums of all forum sizes.

Figure 1: Distribution showing the size spread of Tapatalk network forums, in terms of the total number of members. The x-axis is in bins of 1,000. The tail end of larger forums with more than 70,000 members, has been excluded from the graph.

Figure 2: Distribution showing the size spread of Tapatalk network forums, in terms of the total number of posts. The x-axis is in bins of 1,000. The tail end of larger forums with more than 1,000,000 posts, has been excluded from the graph.

2 Such as the µTorrent community forum, which climbed from a rank of 1033 to 280th between 2014 and 2015.

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The profile of distribution of forums based on the total number of posts is very similar to the distribution based on the number of members. As expected, the peak is in the 10,000 posts per forum bracket, since the data was pre-screened to exclude forums with fewer than 10,000 posts.

Figure 3: Distribution of daily user activity (in millions of pageviews) across the Tapatalk network, with forums grouped by the number of members. The x-axis is in bins of 1,000. Forums with more than 1,000,000 members are classified as having 1,000,000

members in the graph.

The level of payment activity taking place on forums are not tracked by Tapatalk, as the transactions are either processed through external services, such as PayPal, or out of network. This makes it hard to determine the current level of peer-to-peer economic activity taking place on the Tapatalk network. To better understand the size of the forum economy, we turn to data released by Panjo in 2014. Panjo is a forum classifieds service owned by Tapatalk that enables people to list, buy and sell orders for a variety of products on forums. During 2014, Panjo had over USD $55 million in transactions processed on its platform and up to one million unique monthly visitors. These transactions occurred over thousands of listings created during the year. According to Panjo’s own research, at the time there were over $1 billion in transactions occurring across various forum platforms representing over 4,000 forum communities in the Panjo network. Based on the growth of user activity, this number is likely to have increased.

Forum Types ● Interest Forums: These are forums which serve a niche interest. People come to share

ideas, experiences and advice pertaining to this interest. These forums vary significantly in size (often correlating with how niche the interest is). This is a broadly defined type of forum that includes review forums.

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● Trading Forums: Here, users buy and sell items in a particular product category (such as Rolexes) to each other through interactions on the forum. Deals are often concluded in private forum messages. People most often settle the transaction in cash or electronic transfer like EFT or ACH. Experiences vary significantly based on the locations of the transacting parties and the price level of the products. Many forums of this type double up as interest forums elsewhere in the forum.

● Product-related Forums: These are forums that form part of a larger website or online presence and are designed for users to discuss a product. They may not apply monetization techniques, since they don’t fulfill a direct commercial function to the manufacturer, affiliate or retailer trying to either increase sales of a product or provide a public Online location for customers to get product support.

Forum Revenue Models ● Ads:

○ Just like any website, Google AdSense is often used to earn trickle income every time someone clicks on an advert located on a forum page. Forums have natural ad placement opportunities between posts, as well as on the sides of the user interface. Also, since forums are often dedicated towards a particular topic, it is more likely targeted ads will appeal to forum users, increasing the cost per click ad revenue. (Today on Tapatalk Groups, Admins earn Gold Points based on ad impressions.)

○ Sponsored ad spots such as banners are also popular on forums. These spots can be manually sold for a permanent ad space on a forum. Similar to this are sponsored sticky threads which companies can pay for, with the ad being an actual forum thread.

● Membership: Some forums require membership to access additional features (or to access the forum itself). Today, on Tapatalk Groups, members can purchase Gold Points using a credit card or PayPal, and redeem these points for a “Sponsor” badge (digital good) or to have ads removed.

● Affiliate Marketing: Affiliate links enable forums to offer products to members (either to paid or all members), which generates a commission for the forum owner.

● Crowdfunding: Some online communities (not traditionally forums, however) use crowdfunding as a means to sustain themselves. These are typically not-for-profit open-source communities. On Tapatalk Groups, users can Purchase Gold Points and donate the points to their Forum Admin as a form of Crowdfunding.

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● Value-added services: Many forums are dedicated to (or form part of the ecosystem supporting) a particular product. These forums act as a community form of customer service for the product and are often used by visitors to see reviews of the product (or news relating to it). This has an obvious influence on the sales of the product elsewhere.

Current Online Community Incentive Models Significant research has been undertaken to understand the motivations and behaviors of individuals and groups within online communities, including by accessing the (anonymized) user data of a number of prominent online communities and parsing it to examine trends and relationships . Through the research, it is clear that online communities can and have 3

successfully incentivized the desired user behaviour using different techniques. These techniques or ‘primitives’ are collectively known as gamification and use rewards and penalties to drive behaviour.

There are various gamification primitives used in online communities to incentivize engagement; their applicability varies based on the type of online community both in terms of content and structure. A summary of the different primitives and some of the respective communities where they are used is discussed here. Appendix A includes more detail on how some of the major online communities use these incentives today.

Hierarchies

The overarching principle is that prior actions cause users to increase or decrease in rank within a community. This provides a history and reward for good prior behaviour (and punishment for bad). Typically, users who behave well increase in rank in the community’s hierarchy. The reward is often additional rights or may be purely cosmetic (such as an associated badge). Reddit uses Karma to determine hierarchy and as a way of encouraging posts. A minimum amount of Karma is required for advanced actions such as creating a subreddit. On the other hand, StackOverflow uses hierarchy, determined by reputation, to limit which users can perform even basic actions such as upvoting or answering questions. By forcing a minimum amount of reputation for these basic rights, StackOverflow ensures the standard of content contributed by users is high. Typically, reputation is awarded following a review from other users, such as likes, a “thumbs up” button click, or a positive review.

Peer Moderation

Users moderate each other’s content through the use of reputation. Moderation powers are typically placed higher in an online community’s social hierarchy meaning that moderators are often have enhanced reputation and prestige in the community. This encourages active users to push for the moderator role, but also has the benefit of reducing the workload of a community manager or forum owner, since the curation of the community is partly (or wholly) managed by

3 https://pdfs.semanticscholar.org/c364/1f7eeb914b767cbdb6c193159948268d1b3c.pdf and https://www-users.cs.umn.edu/~max/blog/movielens-datasets-context-and-history/

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the community itself. Reddit has subreddits who each have different moderators. These Moderators control User interaction within particular subreddits.

Badges and Levels

Badges and levels can be used to reflect an achieved rank in a hierarchy, or as a separate feature to incentivize users to complete particular actions or reach milestones. A prominent user of badges is Sina Weibo, an extremely popular Chinese microblogging website that is similar to Twitter. It uses badges and levels to encourage participation and reward activity. Users who are active for longer and have more followers gain higher levels, also users are able to challenge each other to compare levels.

This competitive element between users is promoted by visual progress indicators for users to follow and share how close they are to achieving specific rewards or ranks. These indicators are linked to a leaderboard or badges and remind users of the incentive process. Reminders encourage users to increase their engagement as they get continuous visual gratification for every action performed. Additionally, the prestige of leaderboard rankings increases engagement, especially from users who are already near the top of the leaderboards.

Visibility

Another primitive tool is increasing visibility for popular users or posts. This is most prominent in forums or communities which use some sort of aggregation algorithm on posts to determine their visual ordering on the ‘feed’. This primitive is used by StackOverflow, Sina Weibo and Reddit. An aggregation algorithm encourages higher quality content creation as these users enjoy higher visibility. Users want higher visibility since this usually affords them additional rewards, such as reputation or a particular badge.

Economic Incentives

Some communities, in particular Chinese websites, use direct incentives for participation. This takes the form of micropayments or specific rewards for each piece of content. For example, Zhihu, an incredibly popular Chinese question-and-answer website with over 65 million registered users and a top 150 global Alexa ranking, allows direct tipping of users. This has been very successful on Zhihu and has produced many high-quality answers, often in excess of 5,000 words. Interestingly, users are also able to sell their answers. Users can pay for voice recordings of answers to particular questions and the answerer earns a fee. Secondly, users can read a short section of a premium answer and pay to read the rest. These are different to tipping, which is an after-the-fact payment. Zhihu live is another feature where users pay to watch a person sharing their insights via an interactive talk. These user micropayments have yet to become mainstream in Western online communities.

A high-profile example of microtipping is where Wang Sicong, the son of Chinese tycoon Wang Jianlin, answered a user’s question on Fenda, which is a competitor to Zhihu . In this 30 second 4

4http://www.scmp.com/week-asia/business/article/2098668/how-can-quora-make-money-chinas-qa-websites-have-answer

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voice note answer, he discussed what he could and could not afford . More than 50,000 people 5

paid one yuan each to listen to his answer. The policy of splitting the one yuan fee for additional listeners between the person who answers the question and the person who asks the question means the user’s question earned him 17,500 yuan (±$2,600) through the extra listens.

Most online communities use a combination of the different primitives to achieve the desired user behaviour.

Competitor Analysis Forums have unique properties that enable them to serve as localized Online areas of interest and trade:

● Customizable membership hierarchy.

● Exclusively chronological ordering of posts.

● Organized substructures which are categorized by topic.

● Permanent archives with advanced search functionality.

There are many forms of online communication, but none of them have all of these properties, which appeal to the large number of existing forum users, where forums satisfy an important need not adequately served by the substitutes.

Facebook Groups

Facebook Groups enable users to congregate around a particular topic and benefit from exposure to the reach of the entire Facebook ecosystem, making it more likely other users with this interest will come across the group. However, they ultimately serve a very different purpose than forums do. Facebook groups have no structured categorization of content and listing of posts is only loosely chronological (and not consistent for different users). This makes moderation difficult and the scope of possible rules or etiquette applied very limited. While they are useful in certain contexts, they do not provide the linear structure a forum does.

Reddit

Reddit is separated into a collection of subreddits, each with a specific set of rules of engagement and related to a particular topic. This categorization is similar to forums but the aggregation across reddit itself, within subreddits, and within posts is not chronological. Posts allow for multiple separate discussions concurrently, while subreddits list posts based on Reddit’s aggregation algorithm, which takes into account post popularity in addition to age. Reddit’s primary purpose is to identify popular content and make it readily available. This is different to forums, which are easily searchable, categorized and do not use popularity as a

5 The paraphrase answer was that he could afford anything material, but money can’t buy love, freedom and dignity.

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metric for ordering. Many users utilize forums to discuss niche interests, peruse trades or acquire knowledge in an ordered way, which Reddit (and Facebook) is not well-suited for.

Telegram

Telegram is an instant messaging service similar to WhatsApp but originally became popular for the privacy it claimed to afford to users over WhatsApp. Telegram groups have become popular for numerous topics and projects, especially in the blockchain industry. They are instant-messaging groups offering chronological content ordering. Beyond that, they do not share further similarity with forums. They have no guarantee of permanent storage, are not accessible in any capacity to members outside of the group and have no substructure.

Ordering of Posts Categorized Substructures

Permanent Archive

Advanced Searches

Customizable Hierarchy

Forums Chronological Yes Yes Yes Yes

Facebook Groups

User-specific, chronological,

popularity

No Yes Partially No

Reddit Aggregation based on popularity,

chronology

Subreddits not formally categorized,

nonlinear

Yes Yes No

Telegram Chronological No No No No

Table 1: Competitive analysis overview

None of the above services offer all of the properties that forums do. While these services have historically affected the popularity of forums by drawing less suited forum users away upon launch, they do not appear to pose an existential threat to forums, who continue to serve well those users that haven’t switched for content and engagement types that are better served by forums. Tapatalk has further ensured that forums have evolved, through their plugin that enables a native mobile experience for standard forum software implementations. This ensures that a user has no more difficulty participating in a forum than on an instant messenger app. Forums are also the only community type which is completely self-owned. Subreddits, Facebook groups and Telegram groups all fit into a larger organization which ultimately dictates the direction of the substructure.

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C. Token Economic Design Forum Stakeholders

1. Forum Owners: own the forum and dictate forum governance. Want to maximize forum engagement and monetize the forum as much as possible.

2. Forum Moderators: manage the community (Forum Users), enforce governance rules of Forum Owners. Want incentive to perform their function; tools for easier moderation.

3. Forum Users: engage in the community and produce content and potentially economic activity. Socialist in nature in that they want easy and cheap access to content to be shared by everyone.

4. Tapatalk: Provides centralized mobile access to multiple forums for Forum Users and tools to Forum Moderators. Added to Forums by Forum Owners.

Token Objectives

1. Empower users to control their privacy and foster their identity in the forum ecosystem. (community)

2. Empower forum stakeholders with greater tools for self-governance. (community)

3. Facilitate economic activities within and across forums and augment existing marketplaces by expanding opportunities for new services by leveraging network effects of the ecosystem. (commerce)

4. Increase engagement by all forum stakeholders through tokenization. (content)

From here we can rephrase these into actionable objectives embedded into the design of the TAPx blockchain network:

1. Develop a decentralized identity management framework for users to control their identity and pseudonyms across forums.

2. Introduce a reputation system associated with this identity:

a. for users to leverage their effort across multiple forums to build a reputable identity;

b. for forums to more effectively curate new members by utilizing reputation data shared by users at their discretion.

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3. Introduce a token to the forum ecosystem:

a. to enable users to transact with each other and to access goods and services;

b. to encourage the expansion of service offerings in the forum ecosystem;

c. to empower forum owners with more tools to govern their communities;

d. to grant sufficiently large forums greater economic autonomy;

e. as seamlessly as possible, so as not to disrupt the existing community dynamics and functionality of forums.

4. Take the learnings from Tapatalk Gold Points to introduce microeconomic templates for forum owners to increase engagement using the above tools (reputation and token):

a. Use a token to gamify the forums and boost engagement.

b. Using the token and reputation systems as incentive mechanisms for user and moderator behavior.

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a. Macroeconomic Design Analysis has shown a wide variety of token allocations for successful ICOs in 2017 . The token 6

distribution needs to satisfy the needs of a viable economy itself and create a fair environment for a successful token sale for all stakeholders. After extensive evaluation of many different token sales, we believe that a fully pre-minted token allocation is sub-optimal. In a pre-minted token, typically, all tokens are minted at creation, and a foundation holds a large percentage of these tokens for future use. The actors to be considered for the initial allocation are as follows:

● Token Purchasers: these are individuals who purchase the token in the initial token sale.

● Forum Ecosystem: This includes all funding to bootstrap the use of TAPs on forums. This is used to incentivize participation in the network. Additionally, it may be used to fund the reward engine on a continuous basis. The targeted participants of the ecosystem are Forum Owners and Users.

● Team & advisors: This is the standard allocation to the team and advisors. ● Future reserve: A reserve to be used at the discretion of the Forum Commons.

The TAPx network will initially have a supply of 500,000,000 TAPs allocated as follows:

Figure 4: Breakdown of the total token distribution

● 300,000,000 (300 million) TAPs will be sold to backers in the token sale process.

6 https://www.smithandcrown.com/trends-token-sale-proposals/

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● 50,000,000 (50 million) TAPs will be held as a reserve for future use by the Forum Commons, released over 12 months.

● 115,000,000 (115 million) TAPs will be distributed to Tapatalk shareholders, advisors and founders, vesting over 36 months.

● 35,000,000 (35 million) TAPs will be used for initial ecosystem development by the Forum Commons. This includes allocations to incentivize existing forums using the Tapatalk plugin to join the TAPx network and also external forums not currently part of the Tapatalk network. These tokens are intended to go to Forum Owners and Users.

b. Microeconomic Design

i. Bonding Curves

What is Token Bonding?

Token bonding is a means of token generation with a predefined price-supply curve. This is achieved through a smart contract: users deposit a reserve currency into the smart contract address, and in turn receive newly-minted tokens . The deposit is locked up, to be returned to 7

sellers of the token at a later date. The price the user pays per token is dictated by the aforementioned curve. At any point, users will be able to exchange their minted tokens for the original reserve currency at a price dictated by the same curve (there are more complex variants, where the sell and buy curves are distinct, but TAPx will originally be implementing this version). Usually, the predefined curve is increasing, which means early purchasers of a token, which then becomes popular, will be able to sell their cheaply-acquired tokens for potentially more later on . Bonded tokens form an economy where the supply and demand price curves are 8

fixed and known (and very tangible) and where macroeconomic factors, such as inflation, are consequences of these curves.

Token bonding has previously been proposed for use in curation markets as well as to 9

purchase stakes in datasets on decentralized data exchanges . 10

TAPx Bonding Curves

The TAPx network will enable forum owners to use the native TAP token inside their forum, but also to issue their own unique forum token. For example, in Tapatalk Groups, the branded token

7 https://hackernoon.com/how-to-make-bonding-curves-for-continuous-token-models-3784653f8b17 8 Just as with Bancor or Ocean Protocol 9 https://medium.com/@simondlr/tokens-2-0-curved-token-bonding-in-curation-markets-1764a2e0bee5 10 See Ocean Protocol

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will be called “Gold Points.” The TAPx network will enable this by providing a token bonding mechanism for forum owners to create their own forum tokens that will be bonded to the TAP token. The forum owner will be able to initiate the creation of their forum-branded token and purchase these new tokens first using TAPs, which will be the reserve currency for the newly created forum tokens. Any bonded tokens will be 100% collateralized by TAPs, so all deposited tokens are locked up by the smart contract. This provides guaranteed liquidity to any token that is bonded by TAPs.

Forum owners will be able to use these branded tokens in the same ways to incentivize behavior on their forums as you could with the native TAPs token. The forum owner will also be able to decide on the predefined bonding curve used to determine the token buy/sell price (as a function of total token supply) from a set of options available to them during the token creation process. The possible bonding curves will be either straight line (gradient ) or asymptotic, ≥ 0 designed to be of a cost-effective form for a smart contract to compute (such as something like

). After the token is created and the bonding curve is selected, anyone will be able toxc (a+ x )b

purchase these new tokens using their own TAPs or a credit card.

For an additional tokens to be purchased, the smart contract will lookup the appropriate point x on the curve based on existing circulating supply and determine the amount to be paid in TAPs for the bundle of tokens to be generated. A similar process will work for selling tokens (which x ultimately destroys these forum tokens by removing them from circulation, and moving the total forum token supply backward along the bonding curve).

Figure 8: Example bonding curves for forum tokens

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The Tapatalk plugin will be updated to make the process of creating their own branded token as easy as possible for forum owners. Similarly, forum users will be able to purchase these forum tokens easily using TAP tokens from their wallets or a credit card.

As we have seen with the use of the existing Gold Points system, the introduction of branded tokens enables a variety of use cases in forums that isolate network and economic effects:

● Incentives: A forum owner can spend a small amount on TAP tokens to issue a bonded token that will be used as rewards for certain activities on their forums. As we have seen with the Gold Points system, this will generate more user activity and produce more quality content, which ultimately translates into more profits for the forum owner. In order to fund the initial TAPs required to generate the bonded tokens, the forum owner could sell virtual goods & choose to be paid in TAPs. Later, the forum owner could make these rewards available with increases in user reputation, or through users spending the forum’s branded token instead. Users could buy tokens themselves for this purpose, or use rewards received from the forum owner.

● Selling Access, Avatars and Features: Forum owners can choose to assign a bonded token value to certain permissions and let users purchase them. Similar to Gold Points, forum owners could charge a token-based fee to let ordinary members to pin their thread to the top (to increase the visibility of their own discussion), to allow users to change their username handle, or even to upgrade their user status to become premium members on the forum.

● Trading Currency: ○ For classified-style forums, users will be able to use either TAPs or the forum’s

own branded currency for trading with faster transaction confirmations at lower cost than via traditional electronic payments. The blockchain is particularly useful for trading digital items or virtual goods. E.g. purchasing a high-resolution image from a fellow passionate photographer, or a creature skin from a fellow gamer. Users will be able to buy these tokens to use themselves, or cash-out tokens received as rewards or payment. Forum owners could also benefit by implementing a fee for every transaction involving the branded token, for the purposes of offsetting forum hard costs and increasing forum profitability.

○ Forums are one of the largest untapped online marketplaces of goods and services, where issues of trust, reputation, transaction fees and fragmentation have long posed challenges to growing the size of these marketplaces. However, a classified marketplace built on top of the forum blockchain can address these challenges, so that peer-to-peer marketplaces will be able to thrive using a bonded-token trading currency.

○ Additionally, the Forum Commons will have access to Panjo, owned by Tapatalk, which can be converted into a plugin to integrate with the blockchain identity and reputation modules. Listing fees for the seller and insurance protection for the buyer could be paid using bonded tokens already earned on the forum. Forum

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owners can choose to receive a transaction fee per peer-to-peer transaction, paid in the bonded token.

● Ad-free Browsing: In order to maximize revenue, forum owners are tempted to progressively add more ads to their website. This creates an inferior user experience that is slow to load & reduces user engagement. On Tapatalk Groups, today, users can purchase Gold Points to remove advertising for USD $5 subscription. By offering a USD $5 per month equivalent of bonded tokens or TAPs, for VIP access to all online forums ad-free could be a viable alternative to paywalls or per-forum subscriptions, which could be fairly distributed to each individual participating forum.

ii. Incentive Implementations for Forums

Here we provide reference implementations for incentive schemes which can be implemented on forums using TAPx. These incentive schemes make use of the TAPs token, bonded forum tokens, and global reputation to produce schemes which encourage user engagement, produce high quality content and healthy network effects.

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Forum Characteristics

The overall health of a forum is characterized by:

● Content: Online communities function off the consumption of content. Quality content ensures users have a reason to engage. This content also often acts as a catalyst for further discussion and participation.

● Community: The community itself needs to be curated. Some form of governance needs to exist to ensure that users act with appropriate etiquette and that the unique culture of the community is maintained.

● Commerce: Commerce in forums exist on multiple fronts. Forum owners usually want to ensure they are earning revenue for expending effort and resources in making available and maintaining the forum. On certain forums peer-to-peer commerce constitutes a core reason for the existence of the community. Trading forums are one such example.

Any forum incentive mechanisms need to ensure they are positively contributing to one or more of these features of a healthy forum, without compromising the experience for one of the other stakeholders.

We consider the two primary types of forums when designing microeconomic reference implementations:

● Interest Forums have a heavy focus on community and content. While forum owners need to ensure they are making revenue, this is usually achieved on the back of increased user engagement, which relies on a well-managed community and high-quality content.

● Trading Forums have a heavy focus on community and commerce. User engagement is increased through ease and cost of doing peer-to-peer transactions and positive network effects which drive larger numbers of buyers and sellers to these forums.

Forum Score

A Forum Score will be determined for each participating forum on the TAPx network, from a combination of objective metrics. These will be weighted and may be subject to change by the relevant governance authority, either the Forum Commons directly or decentralized, as the network evolves. Initially, the following metrics are proposed to be included (in the following format):

orum Score αM βPC γPV δAgeF = + + +

Where:

● = Total members. The more members the higher the score..M

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● = Total post count, as this is a reflection of the entire history of the forum.CP

● = Total pageviews over a fixed time period. This gives an overview of the currentVP activity.

● = Age of the forum, an older forum which is still active is more likely to be a reliablegeA source of reputation information.

● are weighted parameters which may change as the network evolves and, , ,α β γ δ analysis of data indicates certain types of activity are more relevant than others. As other forum metrics are introduced (such as those reflecting economic activity), these may be incorporated into the Forum Score as well.

Forum Score is not expected to be used for anything other than constructing the Global Content Reputation Scores and the Global Trade Reputation Scores of the users on the various forums comprising the TAPx network. It will not give participating forums access to any additional rights or powers over other forums.

Content Reputation Score

Local Content Reputation Score

Tapatalk will be introducing the TAPx Reputation Score framework described here, and it will also be capable of being implemented by any forum with the Tapatalk plugin installed. The Tapatalk plugin works with all major forum software, such as phpBB3, vBulletin, xenForo, IPBoard, Simple Machine, MyBB, bbPress, Kunena and Vanilla. This Reputation Score will act as a non-financial incentive mechanism for users to produce high quality content. As a primarily peer-to-peer system, this Content Reputation Score will benefit significantly from network effects. Forum owners will be able to leverage this Reputation Score in various ways to increase user engagement and curate the community:

● Through the global reputation system, a forum owner on the TAPx network will be able to access the Global Content Reputation Score (GCRS) of new users to their forum (if it already exists for that user). The forum owners will be able to use the GCRS to determine whether the new user should be subject to any probationary measures for new users to their forum and will get a much clearer classification of new users. By allowing new users with prior forum history to bypass probationary measures meant to discourage internet trolling, new users will be more likely to join and participate immediately on the new forum. Forums with their own 3rd party reputation plugins will still be able to leverage the GCRS, if they are participating in the TAPx network and have the Tapatalk plugin installed.

● The implementation of the TAPx reputation system in the Tapatalk plugin will be a highly customizable system, with various configurable parameters to allow participating forums

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to optimally incorporate Local Content Reputation Scores (LCRS) into their user social hierarchy. Tapatalk will suggest default variables for forum owners to use. LCRS will be characterized by a score (integer value) for each participating forum user, which will be influenced by interactions between users on a specific participating forum. In the default system, a user’s LCRS is wholly determined by other users; however, it will be possible for forum owners to give themselves super-user rights, which rights will be disclosed to users of that specific forum to encourage greater use of decentralized reputation.

● Forum owners can enable an accountable adjustment to LCRS of specific users, for a specific purpose. This ability to boost reputation scores could be used as an incentive in competitions to produce content such as articles, signatures or banners for a specific purpose. It could also be used as an incentive for moderators to perform their functions diligently.

● Accompanying this reputation score system will be the ability to create a customizable hierarchy, with badges and titles to represent each tier of the hierarchy. Forum owners will be able to tailor this hierarchy and badges to the requirements and style of the forum. Visual progress bars will encourage users to attempt to gain more reputation to achieve the next tier. These tiers could be associated with tangible rights or rewards of the forum, to be setup at the forum owner’s discretion.

Users of forums on the TAPx network are able to earn LCRS by creating and interacting with forum posts. If User X likes a particular post of User Y, this in turn increases the LCRS of User Y. This can be extended to any kind of interaction possible with a user (or their posts): For each possible action a user can execute toward another, there is a base LCRS increase . So for Ai αi an action executed by User X toward Y, User Y’s LCRS will increase byAi

(1 )αi + σmax(0, R −R )X Y

where are User X and Y’s LCRS’ respectively and is a configurable variable dictating ,RX RY σ how much extra LCRS User Y gets due to the difference between User X and Y’s LCRS. Examples of actions may be likes or replies, tips, or even total views of a thread a user has posted on the forum. The total LCRS of a user for all actions associated with their activity is then the sum of all these actions weighted by the appropriate .α

Assuming for each interaction , there are interactions from unique users, the total LCRS Ai M i becomes:

ep (1 )R = ∑

i∑M i

j = 1αi + σ

min(0, R −R )j Y

The parameters allow forum owners to weight certain actions or features differently.α

Classification hierarchies can be defined based on categories of users with different LCRS. For example, users with a hypothetical LCRS between 1,000 and 10,000 on a saltwater aquarium

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forum can have a undersea animal badge (Guppie, Tuna, Shark, etc.). This badge will be displayed on their profile and all associated posts they make.

A reference implementation of Local Content Reputation Score is explored in Appendix B.

Global Content Reputation Score

Each LCRS will be scaled using Forum Score and collected into a Global Content Reputation Score (GCRS). This enables users to build a collective reputation that reflects their efforts and good behavior on all forums across the TAPx network.

Figure 9: An overview of how local content reputations combine into a single global content reputation.

Assume a user is a member of several forums in the TAPx network (with activated TAPx reputation system) and the user’s LCRS’ for those forums are given by . The associated LFR }{ i Forum Scores for these forums is . For each forum , the normalized Local Content FS }{ i i Reputation Score is given by:RN i

R ( ) (min( , ))N i = f FSiFSave

· g LFRimaxRi

1

Where:

● is the average Forum Score on the TAPx networkSF ave

● is the maximum possible LCRS a user can attain on forum (this may not be theaxRm i i actual maximum numerically, but the point at which the maximum is considered for GCRS purposes).

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We note two key features:

● A forum with a higher Forum Score will contribute more to the GCRS of a user, given the same LCRS within a specific forum. The scaling of this contribution as GCRS changes depends on . Possible forms of and are a scaled asymptotic function such as f f g x

1 + x or , or a simple linear function such as .rctan(x)a xm

● A user with a higher LCRS will have a higher normalized GCRS, as would be expected. Once again the scaling of this depends on , g is proposed as: .g

The GRS is then simply the sum of these normalized reputation scores, i.e. . RG = ∑

iN i

Finally, the below figure shows how the GCRS of a user will be used by forums to determine what rights new forum users should have.

Figure 10: An overview of how a user’s GCRS allows them to access restricted features in a new forum.

Many forum plugins, such as VBulletin , already have a reputation system incorporated into 11

their infrastructure. These forums will be able to join or port to the TAPx reputation framework, as long as reputation is represented numerically, so that this reputation can be normalized for use in TAPx.

Trade Reputation Score

For peer-to-peer trade, Users are primarily concerned with the trustworthiness and reliability of the participants in a transaction. Thus, a separate Local Trade Reputation Score (LTRS) is needed for each user transacting in a forum. A new decentralized system of trust allows forums to preserve the existing culture of trade forums, which is to facilitate trades in an informal manner.

On forums which accommodate both commercial and content-based forum activity, both reputation systems can be activated by the forum owner. So the forum will have:

● A local trade reputation system, which is implemented on any forum which facilitates trades.

11 https://www.vbulletin.com/docs/html/vboptions_reputation

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● A Forum Score which is identical to that used in the user content reputation system.

● A Global Trade Reputation Score (GTRS) which is a reflection of the user’s collective economic activity through aggregation of the user’s Local Trade Reputation Scores (LTRS) on each forum.

Local Trade Reputation Score

We distinguish between two types of users in a commerce forum: buyers and sellers . 12

Extensive research was done on one-sided (i.e. seller-only) and two-sided reputation systems. Tadelis (2016) notes that two-sided systems tend to produce a very high positive average 13

score, limiting the distinction between quality of traders as buyers want to avoid negative repercussions from sellers and vice versa. In fact, even in simultaneous-reveal systems, where sellers and buyers are only revealed the review of the other at the same time, this seems to occur. Two-sided reputation systems were relevant when sellers had to rely on the trustworthiness of buyers as buyers would often pay via non-instantaneous channels such as cheques. In modern trading scenarios, this type of exchange is unlikely, especially if the sale uses the blockchain. We therefore believe a one-sided reputation system for sellers is appropriate.

The Local Trade Reputation Score (LTRS) would therefore be constructed as follows for sellers:

● a rating on a scale of 0 - 5 reflected by stars, which is a standard way of representing seller reputation in a variety of online exchange platforms (such as Uber, Airbnb and eBay). The reputation score will be constructed through the aggregation of feedback scores over all trades. The feedback score for a trade will be comprised of the F i i following, which is derived from the simplified e-commerce reputation system elaborated in Dharmaadi et al (2014) : 14

LTRS is an aggregated score based on a collection of integer scores selected by the buyer Ri on a scale of to reflect the buyer’s overall rating on various features of the seller:0, ][ 5

● Product Quality: A score on a scale of .QP i 0, ][ 5

● Timeliness: A score on a scale of .LT i 0, ][ 5

● Customer Support: A score on a scale of .SC i 0, ][ 5

The LTRS is then given by:Ri

Ri = 3PQ +TL +CSi i i

12 A user may, of course, vary in type across time within a forum. 13 Reputation and Feedback Systems in Online Platform Markets 14 Reputation system based on seller-buyer closeness degree for e-commerce

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Transaction Price Score is a score reflecting the price of the transaction to ensure a seller TP i does not gain an unnecessarily large LTRS by having executing hundreds of small trades. If transaction is executed at price (in USD):i P i

PRi = PP i

where is the average price of all trades on the forum up until that point and is the price P RP i ratio for the given trade. Then:

P αT i = + PRi1 + ( )PR1

1−α i

where is a configurable parameter which ensures is on a scale of to 0 < α < 1 PT i α, ][ 1 ensure it does not significantly impact rating scores . 15

(Optional) Time Decay Coefficient is incorporated to account for the fact that recent sales are di more relevant than older sales. This decay will be configurable by the forum owner as certain commercial areas may accommodate many more trades in a given time period than other areas. The decay formula is given by:

τ di = −κ(ω −ω )c i

where are configurable, positive-valued parameters, is the current,τ κ ωc week (since a fixed date), and is the week of the th transaction (since the same fixed date). This could be ωi i optionally included to weight older reviews less.

The feedback score for a trade will then be given by:i

P F i = Ri · T i

This is then aggregated into a LTRS in one of two ways (given is the total number of epR N transactions the given seller has participated in and received feedback on):

If time decay is not activated, then:

ep PR = 1N ∑

N

i = 1F i = 1

N ∑N

i =1Ri · T i

If time decay is activated, let be the sum of all time decays of the transactions which d = ∑n

i = 1di

have occured up until this moment in time. Then each feedback score is weighted based on its decay relative to other transactions which the seller has participated in. Then:

ep F R PR = 1dN ∑

N

i = 1di i = 1

dN ∑N

i =1di i · T i

15 This could be adjusted or made configurable to change the weighting, if needed

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In this form, a seller’s recent sales will be weighted more significantly than a seller’s older sales. Note this does not mean that older sales will begin to negatively affect a seller’s score - only that those older sales will contribute less to the total score.

This produces a score for LTRS which will be in the range of which will then be visualized 0, ][ 5 by stars. Additional visual cues (such as badges or colours) could be given to reflect how many sales a user has successfully facilitated, and the date of the most recent sale.

This system requires infrastructure to identify sales. Tapatalk will introduce a ‘trade’ thread type (which is basically a normal thread but tagged in the plugin as a trade) which will identify the elements of the trade and, upon closure of the thread or completion of the trade as indicated by the buyer and seller, allow the buyer to review.

A reference implementation of Local Trade Reputation Score is explored in Appendix B.

Global Trade Reputation Score

The Global Trade Reputation Score (GTRS) of a seller will be constructed using a similar algorithm to that of the Global Content Reputation Score. Each LTRS will be multiplied by the number of sales (to get a total ‘sum’ of LTRS’ on this forum) normalized by the Forum Score and aggregated into a GTRS.

Figure 11: An overview of how local trade reputations combine into a single global trade reputation.

So if a user has had sales and has a LTRS of on their forum, and is a member of N i C i ith 16

forums, then their GTRS will be:M

lobal Trade Reputation Score ( ) (N C ) G = ∑M

i = 1f FSiFSave

· g i i

16 We include the number of sales here since the local trade reputation score is always on a scale of 0 to 5.

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Where, as before, are monotonically increasing functions (such as linear or asymptotic)., gf

When a seller visits a new forum with commercial activity, their GTRS is shown on their profile to signal to both the forum owner and other users that they have an existing reputation as a seller on the TAPx network. This could allow new users to a forum access to certain features (such as immediate trading) or simply serve as an additional metric reflecting their esteem.

D. TAPx and Forum Governance The forum blockchain and any macroeconomic functions associated with the TAPs token will not be managed by Tapatalk directly but rather through a governance forum called the Forum Commons. This forum will have numerous functions:

1. Increasing the size and value of the TAPx forum blockchain network through the addition of new partners and networks.

2. Promoting the adoption of TAPs internally on forums and with external partners, such as vendors, advertisers, etc.

3. Promoting the development of commerce and community apps on TAPx.

4. Maintaining a fair and equal playground for all network participants.

The Forum Common’s charter will be to manage the TAP token economy and to continue to support the development of the TAPx forum blockchain. The Forum Commons will be operated by a paid operations manager along with the engineering resources to maintain and scale the TAPx forum blockchain network. The Forum Commons will sustain itself through the initial TAP token allocation, inflation-related allocations over the life of the project, and through an income on all TAPx transactions, which will be charged a 1% fee by the network.

Decentralized governance is a continuously evolving field with active research. Many promising decentralized governance concepts have recently emerged, such as Token Curated Registries (TCRs), but we believe more time is needed for these ideas to be tested and challenged before they can be used in a network on the projected scale of TAPx. Complete decentralization poses significant risks to the TAPx project at this stage. There is no clear industry standard for decentralized governance and questions around the potential for abuse or manipulation of votes (through vote-splitting or other mechanisms) remain. We believe the TAPx network should approach this (very necessary) process carefully by initially centralizing overall network governance, while completely decentralizing specific forum governance.

Individual forum governance will function as it always has - forum owners set the rules of their forums. TAPx is intended to augment the existing ecosystem and forums will maintain complete autonomy insofar as governance is concerned. As decentralized governance becomes more mature, Tapatalk may introduce alternative governance models for forums to adopt at the

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discretion of forum owners. Once the Forum Commons is able to safely move towards a decentralized governance model, individual forums are expected to be integrated into this process through the introduction of appropriate roles in the Forum Commons for individual forum representatives.

Initially, the 5-member board of the Forum Commons will be comprised of:

● Two Tapatalk representatives.

● Two large TAPx network forum owners.

● One TAPx forum network partner.

Tapatalk’s large initial influence over TAPx network governance is partly due to the engineering resources expended by Tapatalk to create the TAPx network. Board members will each have a three year term, and after three years the board will need to have proposed a clear path to decentralized TAPx network governance. Community consensus will be sought by the Forum Commons on this path in a transparent process. As research in the area of decentralized governance evolves, the TAPx network - through the Forum Commons - will continuously evaluate safe options for a shift towards a decentralized governance model. In doing so, the Forum Commons will always seek out solutions that best represent the interests of all TAPx stakeholders: forum owners, forum users, and token holders.

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E. Conversion of Gold Points to TAPs Tapatalk has been issuing Gold Points since October 2017. Freeforums.org, a Free Forum Hosting site acquired by Tapatalk in 2017, has been issuing Gold Points since 2011.

Gold Points have been pegged at $0.01 (or 100 Gold Points = $1.00) Per the Token Sales Process, the TAPs will have an initial value of $0.10. Current Gold Points will be converted into TAPs, using a reverse 10:1 ratio. For example, 10 Gold Points will be converted to 1 TAPs.

Gold Point holders will have their Gold Points converted within 90 days of issuance of the first TAPs tokens.

F.Team a. Management

Winter Wong, Founder and CEO of Tapatalk

Winter founded Tapatalk with a simple goal of transforming online community experience on mobile devices. Winter bootstrapped the project from 22 forums at launch in 2011 to now with over 200,000 forums participating in the Tapatalk. Tapatalk raised over $8M USD venture capital funding from Floodgate, and more.

Yao Hu, CTO and co-founder of Tapatalk

Yao is the co-founder and CTO of Tapatalk. With many years of dedication to the infrastructure and product development, under Yao’s leadership, the Tapatalk network has grown to be the cornerstone of the community world with millions of active users daily. Yao’s currently leading the TAPx blockchain project in framework design and implementation.

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Eric Sternbach, COO of Tapatalk

Eric worked at GoTo.com/Overture, at the very beginning of paid search advertising. He scaled sales teams from $20 million to $500 million a year in revenue at Adknowledge and Demand Media. Eric is one of the few non-engineers at Tapatalk, and oversee Business Operations and Revenue. Eric has a B.A. in Economics and an MBA from UCLA.

Brandon Kopetzky, Founder of Zetaboards.com

Kopetzky is the creator of Zetaboards.com, one of the largest and oldest forum networks. Zathyus Networks was acquired by Tapatalk in 2017 and Kopetzky is currently leading Tapatalk Groups as the result of the merger of Zetaboards.com and Tapatalk. Brandon holds a B.S. in Computer Science from University of Maryland.

Sanjay Sabnani, Founder and CEO of Crowdgather

Sabnani is an accomplished senior executive at several high growth public companies. Tapatalk acquired the CrowdGather network of forums in 2016 to become Tapatalk Groups. Sabnani is also a former financier and securities principal, currently serving as a special advisor to the TAPx Forum Blockchain Project. Sabnani has extensive cryptocurrency experience, having initially spoken about Bitcoin at the Mindshare symposium in Los Angeles in 2011.

b. Investors

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Floodgate Fund is a venture capital firm that caters to digital businesses with early, seed, and later stage venture, and debt financing investments. Based in the United States created by Mike Maples Jr. and Ann Miura-Ko, Floodgate was the lead Seed Investor for Tapatalk.

Other Floodgate investments include: Twitter, Digg, Gowalla, BranchOut, Chegg, Formstack, Milk Inc., TaskRabbit, SpareFoot, Blueseed, Lyft, Refinery29, LabDoor, MissionU, TextIQ, and Rappi.

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IDG Capital is a leading investment firm, focused on developing extraordinary companies through their expertise in private equity and venture capital, as well as real estate. Founded in 1992, they were the first firm to bring foreign venture capital into China.

IDG Capital has invested in 700+ technology companies, and 50% of Chinese Unicorns were backed by IDG Capital in early rounds of funding. IDG Capital was co-lead investor in Tapatalk’s seed round.

VerticalScope is a privately held corporation headquartered in Toronto, Canada. They specialize in the acquisition and development of websites and online communities for the Automotive, Powersports, Power Equipment, Pets, Sports and Technology vertical markets. Their social networks and websites are vertically integrated roll-ups in high-consumer spending verticals. The resultant audience aggregation places many of their verticals within the Top 5 of ComScore Media Metrix for their respective category.

Through targeted acquisitions and development, VerticalScope has built a portfolio of more than 600+ websites with more than 25 million aggregate pages of content and more than 105 Million unique visitors per month - and growing.

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c. Advisors

Llew Claasen, Founder & Managing Partner at Newtown Partners & Executive Director at The Bitcoin Foundation

Llew is a go-to-market strategist, crypto-economist and Angel investor with almost two decades of senior management experience in cryptocurrencies (2012), digital product management and digital marketing.

He co-founded Clicks2customers (rebranded to www.nmpidigital.com), now a global digital marketing agency with annual billings in excess of $100 million and Synthasite (rebranded to yola.com). Llew is also the Executive Director of the Bitcoin Foundation, the original, the oldest and the largest Bitcoin advocacy organization globally, headquartered in San Francisco, U.S. Llew has a Masters degree in the Management of Technology & Innovation.

Vinny Lingham, Co-founder & CEO of Civic, General Partner at Multicoin Capital, General Partner at Newtown Partners

Vinny is a serial technology entrepreneur and Angel investor who is currently CEO of Civic Technologies, a blockchain-based decentralized identity management platform. He co-founded, Gyft, a mobile gift card company, backed by Google Ventures that was sold

to First Data Corporation in 2014, as well as Yola, a website building & publishing startup, and global search marketing firm Clicks2Customers (rebranded to nmpidigital.com).

Vinny previously served on marketing advisory boards for Nasdaq-listed companies ValueClick and Yahoo. Vinny is a member of the global, high-impact, entrepreneur organizations Endeavour and YPO. He appeared as an Angel investor on Dragon’s Den South Africa Season 1 (2015) and Shark Tank South Africa Season 1 (2017).

Atwood started a programming blog, Coding Horror, in 2004. As a result, he met Joel Spolsky, among others. In 2008, together with Spolsky, Atwood founded Stack Overflow, a programming

question-and-answer website. The site quickly became very popular,and was followed by

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Server Fault for system administrators, and Super User for general computer-related questions, eventually becoming the Stack Exchange network which includes many Q&A websites about topics decided on by the community.

From 2008 to 2014, Atwood and Spolsky published a weekly podcast covering the progress on Stack Exchange and a wide range of software development issues. In February 2012, Atwood left Stack Exchange so he could spend more time with his family.

On February 5, 2013, Atwood announced his new company, Civilized Discourse Construction Kit, Inc. Its flagship product is an open source next-generation discussion platform called Discourse. Atwood and others developed it out of their frustration with current bulletin board software that hadn't seemed to evolve since 1990.

Sam Hamidi-Kazemian, Founder and CEO of Everipedia

Sam is the founder and CEO of Everipedia, Inc. the first blockchain based system of encyclopedic knowledge online. In addition to having built Everipedia to its current success, Sam is also leading the development of Everipedia’s IQ token and article system after the recent ICO funding they received from EOS.IO Ecosystem Fund.

Mike Maples, Jr. Founding Partner, Floodgate

Mike Maples, Jr is a Partner at Floodgate. He has been on the Forbes Midas List since 2010 and was also named one of “8 Rising Stars” by FORTUNE Magazine. Before becoming a full-time investor, Mike was involved as a founder and operating executive at back-to-back startup IPOs, including Tivoli Systems (IPO TIVS, acquired by IBM) and Motive (IPO MOTV, acquired by Alcatel-Lucent). Some of Mike’s investments include Twitter, Twitch.tv, Lyft, ngmoco, Weebly, Chegg, Bazaarvoice, Spiceworks,

Okta, and Demandforce.

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G. Appendix A: Online Community Incentive Models

StackOverflow , 17 18

StackOverflow is a highly successful question-and-answer style website which has a very rigid hierarchical and access structure. The quality of answers is of a very high standard – typically “expert level” – and this standard is maintained by a variety of incentive mechanisms.

● Reputation is the cornerstone of StackOverflow’s hierarchy. By answering or posting questions within the rules, one earns reputation points, which then allows users additional rights at various reputation score milestones. Even relatively simple rights to perform an action, such as upvoting or answering questions, require a base amount of reputation points. This ensures that the standard of content contributed is high.

● Easy signup can be done via a central user identity (Facebook or Google) that allows StackOverflow to simplify the process for authenticated user accounts to earn rights to perform actions, while increasing the effort required for users who have not authenticated their accounts.

● The voting system for both questions and answers works in tandem with the reputation score. This forms both part of the moderation system and also allows the community to determine which questions and answers are appropriate. The system monitors for anomalous voting patterns to ensure the content voting process is an honest process. Users are further incentivized to ask (and answer) questions in line with StackOverflow’s policies, as this will garner more votes for them, than the alternative.

● StackOverflow has a Career portal which, through the sheer scope of the site itself, creates significant commercial opportunities to those with high reputation scores on the site. This incentive mechanism leverages the reputation of StackOverflow to grant tangible rewards to users with high reputation scores.

● A badge system, separate to that of a reputation score, for particular achievements, also exists. This incentivises users to aim for these achievements, which are unique markers that have only been awarded to a small subset of the StackOverflow population, further enhancing the prestige of these valuable users. An ordered reputation system allows for many additional features to be introduced, such as leaderboards.

17https://askwonder.com/q/what-are-the-key-features-that-have-led-to-stack-overflows-success-in-crowd-sourcing-high-quality-57932bfd411caa2500ea4f78 18 https://tseconomist.com/2018/03/24/incentives-in-an-online-qa-community/

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Reddit

Reddit is a social media and knowledge sharing website which shares some features with forums, but without the linear, organized content structure. Reddit takes a very hands-off approach to site governance, allowing people to self-organize into subreddits which anyone can create. The moderation of each subreddit is unique and dependent on the moderation team. There are various features of Reddit which incentivize content creation and participation:

● The fact that a user’s front page (or for someone not logged in, r/all) is an aggregation of the most popular content (with a time decay) means that if a user produces content for a subreddit, it could be viewed by millions of people who are not members of the subreddit. Increased likelihood of broad content discovery makes certain types of content more profitable and incentivizes many people to share their personal projects.

● Reddit has a ‘karma’ system which is split into post and comment karma. Post karma is accrued by users upvoting or downvoting posts created, whereas comment karma is accrued through users doing the same but for comments on posts. Karma accrued by a particular post or comment is visible on the content itself and directly impacts the sorting of posts/comments in the relevant environment, such as a subreddit or user front page. Producing content with more karma causes the content to be placed more visibly by the aggregation algorithm, which has the feedback effect of likely generating even more karma for the content. A user’s total karma is visible on their profile.

● There are numerous badges available to be viewed on a user’s profile reflecting activities they have participated in or achievements they have earned. Some of these are related to popularity and content creation.

● User’s can gift each other a purchased commodity called Reddit Gold for a particular comment or post (which becomes visible on that content). This costs fiat currency and entitles the recipient (the creator of the content) to access a forum only visible by other gilded users. Users are thus incentivized to produce high quality content in the hopes of earning additional recognition and privileges.

● Some subreddits have introduced their own incentive schemes. One, called r/changemyview allows post creators to award ‘deltas’ to the best answer. The accumulation of these deltas for a particular user is then visible on their user flair (part of their username).

● Reddit has Ask Me Anything (AMA) threads for famous people - often celebrities and even world leaders - where users are free to ask these people questions. This is likely to appeal to every user at some point or another considering the wide range of celebrities who participate in AMAs.

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Zhihu

Zhihu is a question-and-answer type website similar to Quora, but directed at a Chinese audience. It is incredibly popular, appearing in the top 30 of Chinese websites and top 150 websites globally in Alexa rankings. It has over 65 million registered users. Zhihu uses a variety of incentives to encourage quality contributions – many similar to StackOverflow and Quora – such as typical visibility incentives associated with posts and responses. However, unlike StackOverflow, some of these are monetary incentives which have ensured high-quality 19

content is continuously being produced. This, in turn, has driven the growth of the network and high activity levels from users.

● Tipping of users for answers they provide. This has been successful on Zhihu and has produced many high-quality answers, often in excess of 5,000 words. Anyone who likes the solution to a question posted is able to tip the original poster or OP.

● In addition to tipping, which is an after-the-fact payment, users are incentivized to produce high-quality content by being able to sell their answers. Users can pay for voice recordings of answers to particular questions, and the users producing these recordings will earn for this effort.

● Q&A live sessions advertised by Zhihu itself. Users pay for these sessions and are able to field questions and listen to answers from experts in a variety of fields. These experts are often internationally acclaimed or celebrities. This aspect has the added social incentive of users being able to use the platform to interact directly with highly popular individuals.

● While it is a Q&A site, it also offers blog posts. In doing so, it marries the idea of knowledge sharing with the cultivation of an identity. By combining social aspects with a highly incentivized knowledge-sharing mechanism, users are more likely to use the site regularly . 20

Sina Weibo

Sina Weibo is a Chinese microblogging platform that is similar to Twitter. It caters to a massive Chinese audience. It is unlike a forum in that it’s content is more unstructured, but offers a numberof incentive mechanisms to encourage quality content creation.

● Similar to Zhihu, users can pay to ask questions to famous people or experts in a particular field.

● Users can tip authors of posts.

19 https://www.dragonsocial.net/blog/social-media-in-china/ 20 http://www.informationr.net/ir/23-2/paper793.html

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● Similar to Twitter, acknowledgment in the form of permanent followers is a strong incentive for content creation.

● Gamification in the form of badges and levels is used to encourage participation and reward activity. Users who are active for longer and have more followers will tend to attract more new users. Users are also able to challenge each other by being able to easily compare their levels.

● Sina Weibo offers a VIP account type which users can upgrade to for a fee. This includes a VIP badge next to a user’s name and a number of additional features that are unlocked.

WeChat

WeChat is a social network with a focus on mobile instant messaging. It is the largest social network in China and boasts almost a billion daily active users. WeChat is also a payment platform which can be easily accessed on its mobile app. This positions it with significant infrastructure to incorporate financial incentives.

● WeChat Red Envelope is an app that allows users to give other users (typically friends) money which can be cashed out, or simply used in the WeChat payment ecosystem. Funds can be sent via a private chat or in a group setting. The concept started with a campaign for users to shake their smartphones (through a feature on WeChat) to win “red envelopes”, which were payouts of cash to users.

● Many companies opt for gamification campaigns on WeChat. Due to the ability of WeChat to host embedded html5 objects, these companies produce interactive games which encourage people to share their results (and therefore the company brand) on their “moments” (which is akin to a user’s timeline) . 21

21 https://jingdaily.com/wechat-interactive-gamification/

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H. Appendix B: A Reference Micro-economic Implementation of TAPx

In the following reference implementation we do a full systematic walk through of the workings of the TAPx infrastructure. We expand on how a specific forum owner could implement a localized token economy by bonding their own token to TAPs. Next, we show the new possibilities afforded to users in a tokenized forum ecosystem. We use Something Fishy, a fictitious forum supporting the community around salt water aquariums.

Issuing a new bonded forum token

Alice, the forum owner of Something Fishy, wishes to issue a new token that will be used inside of her TAPx network forum, FISH. She browses to a forum administrator tab inside the TAPx control panel on her forum software and selects one of the default TAPx bonding curves for a new forum token generation event. Alice decides that she prefers the benefits of an asymptotic function. An asymptotic curve represents an economy where early adopters will be rewarded with increases in token prices for later purchases, with the overall bonding price eventually tending toward a stable equilibrium. The default curve is:

(x) where a ; 0.5 b 1; c f = xc(a+x )b > 0 < < > 1

In order to derive the price at which Something Fishy users would buy and sell tokens we compute the general integral of the above mentioned function:

In this case, 2 1 is the hypergeometric function. The complexity surrounding this F a, ; ; ) ( b c x function are hidden from the Something Fishy users. The users will simply see a price and graphic indicating the current buy/sell point. The default parameters (although completely configurable by the forum owner) would be in which case the first 0 000, b .9, c 0 a = 1 = 0 = 1 100,000 FISH bonded tokens bought would cost a total of 16,799 TAPs. This is easily computed from the above integral.

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Figure 12: The price curve of FISH tokens

The above plot shows the suggested configuration above with the price in TAP tokens per FISH token on the y-axis, versus the token number on the x-axis. For example, the 100,000th FISH token bought or sold, would cost approximately 0.25 TAPs, and the 500,000th FISH token bought or sold, would cost approximately 0.35 TAPs. This bonded curve represents the opportunity for the early adopters of the FISH token inside the Something Fishy forum to pay a lower TAPs price for FISH tokens compared to later adopters. Importantly, the function gradient is such that the price discrepancy between the respective buyer groups will not be drastic enough to deter later adopters of the FISH token.

Alice collateralized the first 10,000 FISH tokens which she issued using TAPs which she was granted through the seeding program of the TAPx network. This programs requires her to spend these TAP tokens on increasing engagement in her forum. The seeding program will also provide Alice with more information on best practises for forum incentive engagement.

Benefits to the Forum Owner

Not only will Alice be able to leverage the new identity and reputation systems to filter new users and encourage participation, but she will also be able to benefit financially from activities involving the transfer of FISH tokens within her forum:

● Alice charges a 0.5% transaction fee on all trades which are facilitated on her forum. The average value of a trade is 50 FISH, which means for every trade occuring on her forum she earns 0.25 FISH in the transaction from buyer to seller.

● For every Q&A bounty set on her forum, she gets 10% of the bounty before it is distributed to the winner or back to the asker.

● She has decided to add quirky fish-themed profile badges which can be purchased for 5 FISH tokens each. The forum has 5,700 active members and 10% of them (570) have

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decided to purchase one of these badges in the first month. This has earned her 2,850 FISH tokens which she can immediately sell for TAPs using the bonding curve.

Using Global Content Reputation Score when onboarding a new user

Now that the forum has initiated its own token ecosystem, Bob, a user, wants to join the Something Fishy forum. A user’s Global Content Reputation Score (GCRS) will play a key role in determining the number of tokens required when they join a new TAPx forum on a probationary period.

Something Fishy has a probationary period of one week, during which time a new user e.g. Bob, is not allowed to post. This is to ensure an unknown individual cannot immediately troll the forum. With the introduction of the Global Content Reputation Score (GCRS) on Something Fishy, Alice has decided that if a new user has a GCRS of 500 or more, then they can bypass the probationary period, as they have proven they know how to act appropriately on other forums. Alice has also decided to activate a staking feature which allows any user with GCRS of less than 500 to stake a certain amount of FISH tokens to be allowed to bypass the probationary period. Should the user behave appropriately for the duration of the probationary period, they will have their FISH token stake returned to their crypto wallet.

Bob joins the forum with a GCRS of 300. He decides to use the staking feature to bypass the probationary period as he desperately wants to ask a question. The staking formula is as follows:

take (1 )S = − TR · β

where is the user (Bob) GCRS (300), is the GCRS threshold (500) and is the base R T β stake amount in FISH tokens (valid for . The base stake can be pegged by Alice to a )R < T particular dollar value, say $2, which is then converted to a FISH token price based on the current position along the bonding curve used when the FISH tokens were first created. It so happens that, at a $2 staking fee, this translates to 80 FISH tokens. Bob will therefore have to stake FISH tokens. 1 ) 0 2( − 500

300 · 8 = 3

If Bob behaves inappropriately in the Something Fishy forum during the probationary period, he runs the risk of losing his stake, as well as decreasing his Local Content Reputation Score (LCRS) for the new forum and also his GCRS . The forum owner will have complete autonomy as to the configuration of this penalty. For example, the Something Fishy forum may not tolerate swearing. Any swearing in the forum would result in either the complete loss of the stake, or perhaps 50% of the user’s stake. The exact penalty will be chosen by the forum owner. Another forum, say Meme City, may have no issue with swearing in that forum and thus the action of Bob swearing on Meme City would not result in any staking loss or decrease in LCRS or GCRS, whereas this would not be true if he did this on Something Fishy.

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Users offering other users bounties

A TAPx forum can offer question-specific bounties to incentivize users to answer important questions posed by other users. These are specific questions that require acute domain knowledge or require a urgent answer and will have a ‘bounty’ attached to them. The higher the bounty, the faster the question should be addressed ceteris paribus. We walk through the following implementation to illustrate the process.

E.g. Bob, a Something Fishy user, posts the question: “What is the ideal pH level of the water for a tank containing RockFish?” with a bounty of 10 FISH offered for a correct answer to this question, as it’s believed that a 10 FISH question typically receives a good answer within 6 hours. The actual mechanics of how this bounty will be stored and distributed are as follows:

The default bounty period for asking a question in Something Fishy is 48 hours, but Bob can choose to either extend or reduce this time. During this period, Bob stakes the 10 FISH tokens upfront, which will be held by a smart contract during this period of time. Over the period of 48 hours after Bob asked the question, users can submit answers to the question and consequently 3 cases may arise.

1. No answers are submitted.

2. Only one answer is submitted. 3. Multiple answers are submitted.

Bob could:

● Extend the period that the bounty is available

● Have the stake returned and leave the question in the forum. If there is a good answer, he could always tip the answerer

Satisfactory answer:

● Bob does nothing and the bounty will be transferred to the user after the 48 hour period.

● Determining the best answer will be a weighted vote between the user who posed the question and general users who upvoted it.

● The exact weighting can be configured by the forum owner, with TAPx providing default settings.

● In the general case, the person posing the question will have the highest weight, with upvotes from other users having weights according to their LCRS accrued in the specific forum.

Unsatisfactory answer:

● Bob flags the answer and a moderator will make a determination regarding its quality.

● The moderator will be able to:

○ Reward stake to the answerer.

○ Return the stake to Bob and punish the answerer, if the answer is spam.

○ Return the stake to Bob and not punish the answerer if it was a genuine attempt to answer

Table 5: Overview of possible scenarios when a bounty on a question is posed.

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Calculating Forum Score

Something Fishy is a reasonably small forum with 5,700 members, but has quite a high post count of 130,000. It has 1,500,000 total pageviews and is 849 days old. Given the formula for the forum score,

orum Score αM βPC γPV δAgeF = + + +

with current parameters chosen at , this gives us a Forum 1, β 0.1, γ 0.05, δ 2 α = = = = Score for Something Fishy of 95.398. This is higher than the average Forum Score on the TAPx network, which for the current week is 57.000.

Implementing Local Content Reputation Score (LCRS) 22

Eric starts his first thread about his experiences with transporting exotic fish country-wide. Eric is a new user, so his current LCRS is 0. The post is very informative for many users who do not know much about the topic, and it receives 75 likes from users who each have a 230 LCRS. Additionally, the thread receives 7 replies from users who each have a 120 LCRS. The Something Fishy forum uses a weighting parameter of for likes and for thread .1 αL = 0 .5 αR = 0 replies , and a ‘reference reputation difference’ parameter . For the post likes,00σ = 1 23

(1 ) 5 .1 1 ) 4.75Rep L = ∑75

1αL

+ σmax(0, 230−0) = 7 · 0 · ( + 100

230 = 2

and for thread replies,

(1 ) .5 1 ) .7Rep R = ∑7

1αR

+ σmax(0, 120−0) = 7 · 0 · ( + 100

120 = 7

Therefore, so far, Eric has gained 32.45 LCRS points on this forum for his well-liked post.

Eric’s GCRS is 300. The GCRS for the TAPx network updates regularly, and in the next update it will includes Eric’s new 32.45 LCRS points. The ‘maximum’ forum reputation on Something Fishy for GCRS purposes is 1,500. Therefore, the normalized GCRS points that Eric receives from Something Fishy is:

R ( ) ( )N = f 5700095398 · g 1500

32.45

To keep this scenario simple, we assume are identity functions scaled by , therefore ,f g 005 Eric gains an additional:

R 500 8.1N = · 5700095398 · 1500

32.45 = 1

22 To keep this reference implementation simple, we will consider a very limited scenario where large groups of users are assumed to have the same reputation. 23 We assume this reputation is calculated concurrently to simplify the scenario.

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GCRS points for his single post on Something Fishy, giving him a new GCRS of 318.1.

Implementing Local Trade Reputation Score (LTRS)

Margaret makes two sales on the Something Fishy forum, where the current average price of a trade is 50 FISH and the forum owner, Alice, has set with no decay on LTRS:.7 α = 0 24

1. Margaret sells a bacalhau to a buyer for 200 FISH. The buyer gives her a quality rating of 5/5, a timeliness rating of 3/5 and a customer support rating of 4/5. This gives Margaret a total rating for the trade of . This is quite an expensive trade, so R1 = 3

5+3+4 = 4 , so . This gives Margaret a total feedback scoreRP 1 = 50

200 = 4 P .7 .979T 1 = 0 + 41+ ·41

0.3= 0

for the interaction of .979 3.916. F 1 = 4 · 0 =

2. Margaret also sells a spreadsheet of saltwater aquarium comparison data she has collected, to an interested buyer. Since this is a virtual good she only charges 20 FISH for the product. The buyer gives her 5/5 on all ratings, giving her . This is a R2 = 3

5+5+5 = 5 very low-value trade, so , which means This R .4P 2 = 50

20 = 0 P .7 .871.T 2 = 0 + 0.41+ ·0.41

0.3= 0

gives Margaret a total feedback score for the interaction of ..871 .355 F 2 = 5 · 0 = 4

Margaret’s LTRS on the Something Fishy forum is therefore . This (3.916 .355) .135521 + 4 = 4

would be visually displayed by 4 stars, with an indicator on the forum that she has sold two items.

Margaret’s Global Trade Reputation Score (GTRS) is a sum of her normalized LTRS’, however Margaret only trades on this forum. This means that she will have a single normalized reputation:

lobal Trade Reputation Score NR ( ) (N ocal Trade Rep)G = 1 = f FS1FSave

· g · L

The current global TAPx configuration uses identity functions for and in the GTRS formula. f g This means that Margaret’s GTRS will be:

lobal Trade Reputation Score 2 .1355) 3.84G = 5700095398 · ( · 4 = 1

24 Refer to the Local Trade Reputation Score section for a description of this variable.

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