The 8 Circuit Studios Token Sale
Financing Innovation in the Video Game Industry
We officially announced the 8 Circuit Studios token sale on June 16th, 2017. Today, we’d like to take this opportunity to dive deeper into our motivations and objectives for doing so as well as provide some additional information that might be useful to those who are interested in participating in the 8 Circuit Studios’ 8Bit Token Sale.
“Precision beats power, timing beats speed”-Connor McGregor
Legacy publishing models once served a valuable function when distribution and marketing was difficult at scale. However, in digital landscapes the place in which that value sits, between the publisher and creator (ie. author, designer, musician, etc.), is shifting. Publishers of content used to provide (and profit) from a valuable service: connecting consumers with creators (and visa versa), facilitating distribution, and offering a broad reach with their marketing channels. They could perform these functions and the creators simply couldn’t match these abilities economically, financially, or logistically — which put most creators in a position of dependency on the publishers.
Video game publishing and development is not resistant to this phenomena, and we would argue that they are leading examples of transition in the publisher-developer relationship: from crowd funding to online video game stores. As we mentioned in our article The 8 Circuit Studios Experiment, we intend to use our experience in the video game industry to add inertia to the momentum of this turning point — to offer new and innovative ways of developing captivating content, facilitating the symbiotic relationship between audiences and creators, and employing blockchains to enforce digital property rights.
As with any ambitious effort, proper financing (both in quantity and in terms) is crucial to the speed and scale with which it can affect change — especially if that initiative upends the way an industry’s incumbents have previously enjoyed a lucrative position of power. In our case, the timing is perfect to take advantage of a profound new way of funding an enterprise of this nature: A Token Sale.
A HISTORICAL DETOUR
“The world of technology thrives best when individuals are left alone to be different, creative, and disobedient” — Don Valentine, Sequoia Capital
Daniel Geller and Dayna Goldfine’s 2011 illuminating documentary Something Ventured takes audiences on a tour of the beginning chapters in the story of Silicon Valley. It chronicles early venture capitalists and the companies they funded like: Intel, Genentech, Cisco, Atari, and Apple. The story outlines the audacious funding model (along with employee equity participation) that played a fundamental role in how Silicon Valley became Silicon Valley.
Thanks to the forward thinking and innovative approach to private equity financing, venture capital as we know it today was born in the 1950’s and 1960’s. This new funding model provided the necessary oxygen to bootstrap start-up metabolism. This new model has become standard in capitalizing almost all tech start-ups today.
We think token sales are a profound evolution from what came before. We believe they will be as important to present and future start-ups as venture capital was in the mid-century for today’s tech giants.
The purpose of our token sale is to raise $1.5mm in capital in exchange for 8Bit Tokens. With this capital 8 Circuit Studios will take D-PARC from Alpha to Version 1.0 and develop a fully functional game development ecosystem.
That said, it would be a mistake to think capital alone is the primary reason we’re holding the token sale. The traditional forms of raising capital are always available to us should we wish to pursue them. Members of our team have sought and successfully secured these kinds of financial arrangements before. However, we believe the most valuable component of our token sale will not be financial: it will be social and tecnnical. True success will be attracting supporters who share our vision and intend to be a part of the enterprise as active participants.
Technically, 8Bit Tokens will allow us to offer an incredibly simple way to open collaboration with token holders to provide methods for:
- Access — insight into our core projects (eg.slack, youtube, trello)
- Acknowledgement for development contribution
- 8Bits as currency (to purchase both in-game and on-market items)
- Voting mechanisms
We will provide additional information on these options in an upcoming article.
The first use for 8Bit Tokens will be to purchase items in D-PARC. These will be rare and significant items, embedded in the blockchain, and will function the basis for testing true digital ownership. In the future, the ecosystem will use 8Bit Tokens as a currency for purchasing other assets as well.
We are limiting the complexity what is possible with Tokens to serve two functions:
- Minimize testing/QA impact by reducing the surface area of risk
- Focus on the core functionality of the tokens to start, and build iteratively from there
NUTS & BOLTS
If you’ve already visited our token sale site, then you’re familiar with the terms of our token sale — please feel free to skip to the next session. For those who have not yet visited here are the basics:
Maximum cap on the token sale: $33 million
Total token supply: 100,000,000 8Bit Tokens of which:
- 33% sold in the token sale
- 33% retained by 8 Circuit Studios
- 33% allocated for distribution to incentivize participation in the ecosystem
- 1% to cover token sale costs
- Ethereum ERC20 Token
Purchase Methods Accepted: ETH
We are currently creating our token sale contract, and it will be located here on github for anyone to audit if they choose.
The 8 Circuit Studios token sale will start on July 17th, 2017. We will reveal more details in the upcoming days but please continue to check the 8 Circuit Studios Token Sale website for the latest information.
We wish to state unequivocally: no matter what happens with our token sale, we are bringing D-PARC to Alpha in August, 2017 (specifically including digital property rights enforced by the blockchain). We’ve made this commitment to the community and ourselves but more importantly there is a critical point to stress here: the completion to Alpha is a demonstration of what is possible with our team of dedicated developers, artists, and designers and our confidence in our innovative development process. We will be highlighting progress and providing updates throughout the construction of D-PARC and we hope it will indicate our capability in accomplishing intended objectives.
A successful token sale affords us a tremendous amount of flexibility. This is an incredible opportunity for the game industry on several levels:
- From what token sales can do for developers directly
- How fan capitalized projects can improve their game play experiences
- How we can change an industry by improving how value is exchanged between all of the participants in an economy
8 Circuit Studios must also consistently do the right thing as it will set the tone and example for other game development companies who will follow with their own token sales. We feel a significant responsibility to be as open and transparent during this process as possible. In light of this we believe it is relevant to discuss how the capital raised will be used and outline how we think about “success” as defined by the funding results of our token sale.
We have three approaches based on the level of funds we receive. We’ve listed these as ranges with fiscal-edges for the sake of convenience, but these boundaries function more like gradients as we prioritize features with our token holders and community input.
These approaches are categorized as:
We are targeting a minimum of $1.5mm. With this equivalent we will be able to complete D-PARC from Alpha and develop a functional prototype for the 8 Circuit Studios ecosystem over nine to twelve months.
This range is from $1.5mm to $9mm. At the lower range we will finish the feature set for D-PARC as indicated above, as well as bring the feature set of the ecosystem to Beta.
At the higher range, we will be able to fully complete the ecosystem as well as produce two feature rich games. If the token holders and community indicate a preference, we may reduce the feature set of these games and increase the total number of games we develop. At the higher sale range, we will focus on growth instead of prioritizing a more conventional business model focused on sustainability. We anticipate a development cycle of 18 months to complete these objectives.
At the most ambitious range we will achieve the objectives outlined above. Moreover, we will infer that the community is interested in onboarding a full team to aggressively target significant change in the video game industry’s reliance on the legacy publishing model. We will focus heavily on business development and collaboration with other studios and developers.
Each of these levels come with stretch goals but the sections above are specifically intended to be conservative in nature.
We are in a very exciting time: Blockchains enable digital sovereignty, cryptocurrencies empower new finance and participation models, and software continues to eat the world. We believe value on a cultural and economic level will move further and further to those who are driven to collaborate and create.
We are all participating in the blockchain experiment and it is an organic and fluid process. We hope our decisions will be informed by the preferences of our token holders and our community. We have much to learn along the way, but we also strive to serve as a positive example for how token sales should be conducted for future game development teams. We will bring the skills we have refined over the years to contribute to a new way of building games. We look forward to working closely together with our community as we enthusiastically forge ahead.
About 8 Circuit Studios
We are an experienced group of game developers, with over a century of combined experience in the video game industry. We have a passion for creating video games, telling compelling stories, and creating new models to benefit people.
About the Author
James Mayo has worked in the video game industry since the time of the second console wars (Sega v Nintendo). From megalithic publishers to indie developers, from big budgets to crowd funding, his core skill-set comes from extensive experience in managing a “generous” number of product development life-cycles. James loves building teams of highly motivated and competent professionals. His passion is empowering people to do their finest creative work as well as surrounding himself with the smartest folks alive.