As we usually try to do, we’ve gathered some great questions from this week that we didn’t have time to answer in the AMAs, and providing the answers for everyone’s benefit here:
Q1: Given that your links will be encrypted, with 2key.network, how will these links be useable inside advertising campaign settings? Because often enough networks require the ad’s url to match the target domain url. In this case, it’s masked by an encrypted url. Have you looked into what the biggest ad networks (ppc, affiliate, display) require? Affiliate marketers may be a huge first target audience of yours, and I’m not sure if they’ll be able to use your tech.
First, the entire point of our product is to enable anyone to mobilise the human network and turn ad-hoc social networks into dedicated target audience discovery mechanisms. In this, we would like to enable contractors to pay their fans/supporters/clients/affiliates directly for helping them achieve business results, without requiring the use of ad-networks.
The entire point of our product is to enable a human-2-human, peer-2-peer, master-2-master approach which empowers humans forming decentralised ad-hoc social networks, instead of making payments to robotic centralised ad-networks. Anyone who actually currently uses ad-networks as a client, i.e. pays the ad-networks for running ads, could also use 2key directly, which would be cheaper, more efficient, and much more transparent. With 2key you can pay only per business result, and only when results occur, only what you set out to pay in advance, and pay that amount to your human supporters / fans / clients instead of to robots artificially serving ads across the web.
Second, from a technical standpoint, we plan to release SDKs, APIs and widgets to allow intra-domain integrations of the 2key Protocol, for use inside bigger enterprise players or publishers. Our primary concern is for allowing a referral solution for the big tail of businesses — SMEs and SMBs, which don’t have abilities to integrate with B2B referral SDKs or ad-networks. But the 2key technology could be equally well used by big enterprises, websites and apps, as it provides a novel, unparalleled marketing, distribution and conversion channel which could be employed risk-free in tandem with existing channels. For this reason we’re targeting a 2key as a service B2B offering for end of 2020, starting probably with a web2.0 conversions campaign for achieving any type of web2.0 conversions on target sites, as well as a 2key share widget for publishers .
For example, if you’re a big publisher, paying a lot to facebook and google for driving visitors to your site in hope they will be relevant and convert into paying subscribers for example, you could equally as well install a 2key share widget, so that once people do land on your site from whatever robotic source you paid for, you could then further monetise that traffic by offering your users a social revenue share model — “share and earn”. Furthermore, if you’re a publisher getting paid by an ad-network each time somebody visits your site, you could equally integrate the 2key share widget, to incentivise your readers to find more relevant readers, to further monetise that ad-network source of revenue.
As for affiliate marketers, our solution is intended to do to affiliation what Airbnb did to hotels. That is, flatten the affiliation pyramid and allow anyone to be an affiliate with the ease of referrals as a service. That is to say, any business, company, website or organisation running affiliation, could equally as well use the 2key service to generate 2key Links for any campaign to drive any conversion result, and give this link to both professional affiliates and regular users/clients/fans etc..
A 2key link is very simply fair and honest and transparent — if you’re an affiliate with a very big following you could use the same 2key link and earn a whole lot more than a regular user who just referred the link to a few friends. But both will earn, respectively to their generated results, and both can use the exact same seamless 2key setup, with zero integration and maximum transparency, as the smart contract is already in the link..
On the other hand, from previous research we’ve conducted, the current affiliate/influencer landscape can be quite miss-leading. Often you have affiliates with an apriori web2.0 reputation score — which is every easy to buy/hack (e.g. buy likes, followers etc..), and then they charge a pre-set fee for any affiliation/influence service, regardless of results. But the thing is, a certain celebrity may be good for promoting a certain product, but be horrible at promoting another product.
Today’s affiliation / influencer markets are highly opaque — utterly lacking transparency — it’s often unclear whether affiliates actually get paid for every result they bring in, and often unclear how many valid results were brought in from each affiliate/influencer, so there’s lack of trust on the influencer/affiliate side, but also, there is often lack of transparency and measurement in terms of the exact uplift a certain influencer has in a specific campaign with a specific brand or product on driving actual sales. The only metric used for evaluating work of influencers is usually their “PR noise” and “follower counts”, both things which can be easily hacked and bought in the current web2.0.
So the idea behind 2key is to provide all players in the social-influence-based marketing realm a solution which is easy to use, zero-integration, with validated results only, built on validated result-driven reputation, and result-based payments/earnings. This can be used to truly level the playing field, allowing the ones actually paying for this service — the businesses, to make sure they’re paying only for the results brought in by these influencers/affiliates/referrers.
Currently there are various names for those working to find target audiences, being called differently depending on various immaterial separations (e.g. influencer if I have more then X followers on Y, affiliate if I spend more then Z hours a day and I work at this professionally, referrer if I just share with friends occasionally etc..). Truth is, it’s a continuous spectrum of social influence, and the only way to maximise the “social-marketing” vertical — is to allow truly dynamic flow of social influence to be transparently tracked, measured and compensated. In some cases a local celebrity influencer can be much more efficient than a professional affiliate, or a national celebrity, and vice versa. When the smart contract is in the link, it all doesn’t matter, because everyone can equally well join and participate, and get compensated in direct relation to what results they bring in, however they wish to bring it in. As it all travels within the link, and the links can go anywhere online, an influencer can utilise a 2key link on instagram, an affiliate can distribute a 2key link on promoted posts and ads, bloggers can post a 2key link on their blogs, vloggers can post 2key links on their videos, referrers can just use their messengers and whatsapp etc.. It allows everyone to play on a level which optimises the industry.
Lastly, ad-networks, could, technically, integrate into the network when we open up the market for programatically buying ARCs (as opposed to only receiving them by social invite currently). This is a future plan, not yet on the official roadmap, and will be slated pending the product-market fit phase. The basic idea is both traffic drivers and traffic interchangers such as ad networks and publishers, will be greatly willing to stake both money and their reputation for buying access to share and earn in campaigns. The sequential structure of 2key referral chains and the inherent ability to build referral graphs make it quite possible to introduce programatic buying into select points in the referral graph, to boost traffic and drive results. There is much to optimise here in terms of when to enable this, on which campaigns, and where in the referral graph. The basic idea however, is that instead of hiding within opaque systems, ad-networks can now join a transparent mechanism whereby they can earn or lose reputation and money in direct relation to their contribution in driving business results. In such a setup, businesses as contractors, can issue 2key campaigns which are eligible for programatic relays, which will enable to purchase ARCs via a marketplace, and then ad networks could vie to purchase a limited set of ARCs, and then take their cut and refer that onwards to publishers, to also get their cut for driving conversions. This would be in the great interest of the advertisers feeding the industry, as it would make the entire process more democratic, open for true result-based competition, transparent and secure. This could be an inherent integration mechanism for ad networks. In terms of token utility, enabling to purchase ARCs with 2KEY can open up a new and strong demand stream for 2KEY to make the economy stronger, this demand stream will be generated by the interest of bigger referrer players to join the game(e.g. big influencers, big affiliates, publishers, ad networks etc..)
Another form of integration which could already be established for ad networks in the current system, is for ad networks to become contractors in the 2key Network, and simply generate 2key links to drive people to their ads, but that would require them to generate a new channel for human-based targeting. They could do this and join the 2key game if they wanted, once our SDKs are out. As for their current models however, they mostly use programmatic bidding to allocate ads to display spaces, sharing this monetisation paid for by the advertisers with their publishers. As we’ve described here however, as the first step, their publishers are very likely to want 2key, as it’s a risk free, pay per result mechanism which could be run in parallel, which would also be good for the ad networks and fit in with their existing model. As the second step, the advertisers (businesses) currently paying ad-networks to run ads are very like to choose running on 2key network as well, driving conversions directly through conversion-targeted-referrals — with 2key’s convertable links (links which can also track conversions). This is posed to open a parallel channel which can eventually bite away at ad-networks, but at first it’s mostly a parallel channel, as it’s mostly about distribution and conversion acquisition, not advertising per-se. Lastly, if all goes well, ad-networks might require to shift their focus from strictly robotic-based mechanisms for ad-deliver to add also human-distribution mechanisms like 2key, which will be quite easy for them to integrate once our SDKs will be out. Any way you cut it, human-based-marketing and distribution is going to gain a massive stronghold on the marketing industry, and we intend to be at the centre of this process.
Q2: Can the original “sharer” of the link get a larger reward for his contribution?
Of course, there are many types of incentive models, and already in the implemented basic types, you can find the “manual” incentive model in which each person on the chain can choose how much to keep from the reward and how much to pay forward, so the next one in the chain already sees a max reward which is what was left after the previous referrers took their bites. In this model, the first referrer who gets the link directly from the contractor sees the full max compensation, and can choose how much to keep, and choose to keep most of the reward for themselves. Only catch then is that there would be less incentive for those after them to continue the chain, so if you’re an influencer with very high confidence in your following, or a big publisher with a lot of traffic, and you want to monetise that traffic, you could post on your website a 2key which you’ve generated after you took the majority cut out of the max reward. This can be a valid use case for example if you’re a big Token Sale rating website, and you want to help projects raise funds, so you can promote projects showcasing on your site to generate their 2key campaign for raising the funds, then give you the sourcing seed link (if you’re exclusive, you could be the only one with that link), and then you could generate your own 2key link out of the contractor’s sourcing seed link, and post that new link in your website, on the page of the project. This would simply mean, that anyone accessing the 2key campaign for that project’s fund raise via your site, would be earning you the biggest reward per conversion.
In our planned general incentive model for online sharing, there will be multitudes of parameters that join to influence how much reward each referrer on the chain will get, and in those cases as well, there could happen a scenario where the first referrer on the chain gets more. For example, if you’re holding a token sale, and Vitalik was the first one to generate a 2key link and pay it forward, just because Vitalik has more reputation then the others on the chain most probably, he might be posed to get more. You can read more about our intended V1 general model for sharing here.
Q3: Is 2key compatible with all types of blockchains being built?
In principal yes, the 2key protocol itself isn’t inherently bound to any specific 1st layer protocol. Practically, for speeding up our go-2-market, we’ve chosen to integrate to Ethereum only to start with, as it’s the currently biggest and most reliable general purpose turing complete distributed virtual machine. But we’ve already signed LOIs with more blockchains to allow using the 2key protocol on top of other layer1 blockchains, and we’ll work to generalise the interfaces to allow more customisable inter-operability between the 2key layer2 and any layer1 blockchain.
As the 2key protocol advances, this becomes easier, as the points of touch between 2key Protocol and Layer1 become smaller. For example, in the next campaign types to launch — starting with the link distribution (CPC) campaign, only the campaign creation transaction happens on the layer1, and afterwards all transactions happen on layer2, so there’s no issue of integration with layer1. Then at then end after the campaign resolves, the only layer1 mechanism is for eventual persistence into the public global ledger, and for withdrawing the rewards, which is basically all sorts of zero-knowledge proof mechanisms which are quite compact on the layer1, as the proof itself is built on layer2, and on layer1 all you have is a thin validation layer on a smart contract. So shifting these integrations and fitting those to different layer1 chains shouldn’t be a big burden.
Q4: How will the quality of 2key’s service be affected by spammers sharing links uncontrollably? How will 2key solve this problem?
We’ve answered this question multiple times before, and hopefully soon we’ll publish the grand “2key Q&A” index so people can easily find answers.
In short, there are a few mechanisms at play here:
(1) Self-Regulated: You can only earn money on 2key if people follow your links and consider you reputable. By spamming, you lose your peers respect, and no one will follow your links, let alone convert from your links, which will disable you from earning money on 2key, hence quench your interest in sending 2key links to people.
(2) Incentive-Model Regulated: The system architecture allows for a lot of levers to control and optimise the topology of the referral graph per campaign, as well as the campaign outcomes.
(2.1.) One of those levers is the ARCs (Activation Referral Coin) mechanism — which allows to dynamically optimise how much invites each referrer has to share. For example, a referrer who receives 5 ARCs can only invite 5 others to join after him in the chain. The idea is that depending on the referrers reputation and the type of campaign, each referrer can start with a set of ARCs and then receive less or more depending on the results they bring in. In cases of reputation dropping below a certain threshold, this could even mean being barred from participating (i.e. receiving 0 ARCs). In case high level spamming is acted out mid-campaign, the ARCs balance can dynamically be moderated either up or down accordingly.
(2.2.) Conversion Rate — There are multiple factors contributing to reputation, and the conversion rate is a major part of them. A referrer who spams will produce a very low conversion rate which would hurt his reputation, possibly to the point of dropping below min-threshold campaigns, and possibly all the way to zero — barring from participation in any and all campaigns.
(2.3) Open Feedback Mechanisms: Each referred individual landing on a 2key link has the option to provide feedback, which counts as signals that can statistically mount up to influence reputation downwards.
Q5: We know the immense control Facebook and Google have on this online marketing industry! What would 2key do when Facebook’s Libra blockchain goes online and they monetize referrals on their own blockchain?
We need to differentiate here between two things: centralised ad / delivery networks and libra.
(1) Facebook, Google, Amazon etc.. are gigantic robotic centralised ad distribution networks. They make all their money by harnessing peoples’ identities and interests, and then using robots to target ads at people, charging businesses money for reaching target audiences, without letting neither the target audiences to earn anything from that, nor the users on their platforms which contributed all their personal info and behavior monitored on the platform for building these models, nor do those platforms allow businesses any direct access to these target audiences. The only way for these companies’ business models to work is if there is as little direct connection or communication between their users. As more of the connections must be facilitated by the central platform, the more money it can take. So it’s highly unlikely that any of these companies will opt to start paying their users instead of making the money themselves while giving nothing back to users in terms of earnings.
For example, at first we thought we shouldn’t go into amazon stores etc.. to help them run 2key to expand their client base, until we realised that store owners on amazon don’t actually own anything, they are enslaved to the wills of amazon, which doesn’t let them know who their clients really are, forcing them to communicate with their clients only through opaque amazon controlled channels. So again, little chance Amazon would opt to start allowing store owners to pay their clients for finding more clients, because it would directly contradict their most basic business model of being a centralised player profiting just from the fact that all communication and traffic goes through them, that’s actually the only major asset these companies possess, a monopoly over information flow.
2key is on a mission to liberate information flow, and allow everybody to regain ownership over their information flow, i.e. take responsibility and be able to monetize the information flowing through them. So there is little chance any of these companies will every offer anything close to 2key.
2key will launch as an alternative to these centralised services, one that initially might bring in less results for businesses, but those results will be brought in a risk free manner, paying only per results, and only when they’re achieved, and only what the business set to pay in advance, and having that payments going not to robots but to the supporters/fans/clients of the business/org/contractor/individual running the campaign. Gradually, we believe, this risk free, zero integration approach will enable 2key to take a sizeable bite from the online marketing industry, but it cannot be employed by the big players without destroying the very business model which they rely on to survive and continue earn profits for their share holders.
(2) Libra, if it ever launches (which is a very big if), will probably launch in localised failing national economies as an alternative digital currency to the failing local currency. But even if it was to deploy globally, that would be a great thing for 2key. Libra is not facebook, it’s an association formed with the purpose to replace the world bank and the national banks, with a single global digital currency, that will have wide adoption from day one thanks to the callibra wallet which will be installed for all FB users worldwide. Together with their logistic and political powers to supply fiat on ramps and off ramps, you have a valid contender to give central banks a run for their money, literally speaking. This is very bad news for central banks, but very good news for 2key. We were actually the first to integrate Libra testnet into our product, because the 2key Network will become stronger, the more available it becomes to cash in and cash out of it. And having a major traffic connection that builds a fiat-crypto bridge like Libra (also Venus by Binance and Ton by Telegram are on that list) — can be a huge game changer in our ability to onboard users and money into the 2key economy. Libra is not there to provide referral solutions, they just want to be the new world bank, that’s more than enough problems for them to solve.. They will be eager for projects like 2key that translate that new centrally controlled digital currency (e.g. Libra) — to be used for social inclusion and social economic empowerment. This is also why we were one of the first to integrate Libra, and one of the first to make it into the Libracamp accelerator — which is planned to start in a week’s time, and we were chosen first place out of hundreds of projects worldwide to participate in this 5 project bootcamp. You can view our team page on the libracamp site here: https://app.libracamp.com/teams , we’re currently at first place with 188 votes, which were given only by the mentors, all very respected key individuals from the industry. This goes to show that 2key as a power multiplier for Libra and vice versa.
Q6: How do you guys arm yourself with this as it is happening to a lot of companies. The running out of money part. You are raising 6 million, will that be enough to fund the project and the team for the coming years?
That’s a great question. What we’ve seen to date is projects raising too much, then come crushing down because they got too comfortable and/or due to lack of proper fund management and/or due to not being lean and mean enough. The key to execution is to never drop the sword, and never stop running towards the target. To achieve this, we must never be comfortable that we have enough money, we must always be on the verge of “fight or die”, this is the mindset which has helped us build so much with so little funding.
The reason we’re raising only 6M$ are a few — first — market conditions — the time of raising incredible funds and then losing your edge as a company have rightly passed. These 6M$ should be used as a jumpstart fund for the economy R&D, after which we’ll either require to conduct additional token sales or to reach a point where the economy is self sustained.
We’re not raising funds for the lifetime of the project, as we’ve seen this to be counter productive to the agility and spirit of a startup, which must operate on a live or die approach, especially in the first years of existence. These 6M$ should take us through our product market fit phase and allow us to stabilise in a place where in 2–3 years from now we have established 2key Network in the market.
If all goes as planned, thereafter we will be able to either self-sustain if the 2KEY economy becomes viable enough (which is our preferred option), and/or appeal to the community for additional token purchases for supporting more dedicated growth trajectories for the network.
Q7: The 2key Network consists of campainers, referrers, converters and integrators. Campainers have to pay for launching the campaign right? This is the money that is used for rewards and fees paid with 2key. Where are those tokens being locked?
Who are integrators in the 2key network? Who elects them as they provide the optional conversion and convertor validation service? What else is the role of integrator?
(1) Contractors must deposit or purchase a budget of 2KEY when setting up campaigns — in case these are non-monetary conversion campaigns. So any campaign where the conversion event doesn’t entail purchase or donation events, the referral remuneration budget has to be bought in advance.
In case this is a token sale, donation, crowdfund, patron etc.. campaign with monetary conversion, the referral compensation is bought directly from each conversion amount put in by converters.
In both cases, either the contractor or converter put in some money, e.g. ETH, into the 2key campaign contracts, and that money is automatically used to purchase 2KEY via the 2key Exchange contract. That 2KEY is then kept within the campaign contract, and once a conversion occurs, validated and executed, it is distributed within the campaign contract to the balances of referrers who delivered this conversion, until such time as each referrer chooses to withdraw their compensation.
Any integrator fees from conversions are also paid in 2KEY, and are moved to the balance of the integrator in the campaign contract under the same conditions, with each validated and executed conversion. For the network fee, it is sent to the admin contract, and as for the network tariffs, they are sent to the deep freeze contract. You are welcome to read more about these mechanisms in our 2KEY internal circulation system article here.
As for integrators, please read our previous Q&A article, it has a big section on integrators, you can find it here.
Q8: How is 2key governed? Which are the governing mechanisms?
The smart contract architecture is quite complex, you can understand more about how the smart contract mechanisms works here.
Generally speaking, there are singleton contracts which manage the network, and ephemeral contracts which manage the campaigns. The contracts themselves on the campaign level are managed by the participants, so basically, once a campaigns launches, there is no governance, in that the campaign is basically a bunch of smart contracts working in tandem according to their pre-set rules.
There is management on the R&D in the network level, but this cannot influence campaigns already launched, so is not a governing but more a development mechanism. There are core developers which are able to submit update requests to the singleton smart contracts, and the blueprint contracts for campaigns, from which new campaigns are moulded. These are upgrade requests, so they don’t affect campaigns already running. Then there is a congress which represents the 2key legal entity which can vote to execute an upgrade in the code.
Q9: I am not a tech guy, but aren’t you afraid that the 2key concept will be undermined because of links containing smart contracts blocked trough all kind of antimalware and antivirus software?
The basic concept of the 2key Link, is just to download some javacript/typescript and validate/generate hashes embedded as HTTP parameters, so anywhere which HTTP protocol works, which should be on all HTTP clients, 2key links should also work.
Q10: Did you ever get an answer from your tech team on the potential game-ability of the system? I.e. how do you prevent people from just creating a new key to circumvent the payments chain? How can you prevent someone from essentially ‘jumping the referral chain’ and basically find out who was the campaign creator and go directly to them so you’re closer to the source, then share the link directly with a converter (you know them or something) and then you don’t have to share your rewards with everyone else on the chain since you’re the only referral on the chain.
First, the moment a browser is exposed to a 2key Link, even before any action was made, it is joined to the referral chain corresponding with that link. So no matter what you do afterwards, you cannot change your position in the chain. So the first guard against jumping referrers is that the very exposure to the content about the campaign already binds you to the campaign at a certain point.
Once you start building up reputation as a user on the network, which is very time consuming and requires actual effort, and actual results brought in, and actual human network of peers that listen to you, that’s when you can start really earning a lot from referrals on 2key, and then, if you wanted to somehow circumvent this guard, you would need to find referrers to referrer you to campaigns, then start opening up new users and using them to try and somehow join to a different link that you may obtain by having learnt about the campaign on a different user and then finding out who the contractor is and contacting them in the world somehow, and asking them explicitly to share the source link with you, even though they don’t know you and it’s against their interest.
So beyond the social friction and counter-interests which would diss-incentivise this move (more on that in the next paragraph), there is just the mere challenge of trying to maintain several social identities with healthy reputation on the network, which by design of the network should be untractable for a human, unless you have a factory of actual people working dilligently for you — remember this is bot proof, you must pass identity and humanity checks, but this also isn’t a click-farm type of hack, as for anything to flow in the system there must be actual conversions, which means there must be actual people who follow your social lead and follow your referrals to make proper conversions, so you can’t just make up an identity and build reputation, you can only build reputation if you can actually make other people perform business results.
Second, the only way to join a campaign is to be invited by some referrer holding a valid 2key Link with a secret pass to that position on the referral chain. This is a secret that can only be shared directly by referrers. So if you somehow heard about that campaign but never opened a 2key link for that campaign, but know who the contractor is, you could try to contact the contractor, and ask them to send you a sourcing seed link, but that would require their explicit consent. The contractor however has an inherent interest to compensate their existing loyalty base for bringing in new clients/fans/business results, so it’s not in their interest to help other referrers jump the line, it’s both against their interests atomically — they will be paying that rogue referrer more in this case as he would be getting the source link with the maximum reward, and it’s also against their strategic interest, as giving the source link away to random requesters can lead to their core base of supporters losing out, which can break trust with their core base, which is against their interest.
Third, in the future we’re planning to develop more incentive model optimisers, for example, making 2key Links temporally degradable, e.g. a contractor creates a 2key link, which is a sourcing seed link with the max compensation on it, then this link has X hours to live, and in these X hours, it must be sent to the existing client base of the contractor, and shared. Thereafter, anyone who heard it via hearsay, will be out of time even if the contractor wanted to reshare the core link with random spectators and not his core base.
Fourth, there are other algorithmic methods to distinguish between valid joiners in each layer of the referral graph. So also algorithmically speaking, incentive model optimisers (a form of integrators) could offer services which optimise the campaign by e.g. predicting the probability that each joiner is a valid joiner in each layer, and thereby optimising the bid that they get accordingly.
The entire idea behind the architecture, is that incentive model optimisers can offer their services as integrators, and they can then attain full control to optimise the bids of compensation per referrers in the chain. The idea is that 2key campaigns are a 1 sum game, they only work if everybody wins, fairly, and on a per-result, per-validation schema.
