Meet Kakao’s First Blockchain Investee, ‘COSMEE’

On August 10, Kakao Investment announced its first investment to a blockchain company after its establishment. The beneficiary for the investment is Cosmochain. At first, Cosmochain was known as a company that tries to develop an Ethereum-based platform for cosmetic/beauty contents. However, in ten days of news release about the investment attraction, Cosmochain showed its identity by launching a pilot project, ‘COSMEE’ on August 20. COSMEE has ranked first under Top New Beauty category in the Google Play store on August 23, as the third day of its launch.

How can Cosmochain’s strategy and vision attract not only institutional investors but also general investors? Decenter met Howon Song, the CEO of COSMEE, in the Trillionaire’s office, which is located near Hak-dong station in Seoul, on August 21, the next day of COSMEE’s launch.

“Nearly 60~70 percentage of the informational contents on the existing SNS are the fake contents created by influencers and sponsors. On this account, it is hard to share authentic and accurate information about beauty contents nowadays. Of course, I do not oppose to the necessity of influencers and sponsors. However, COSMEE’s curation using users’ direct expression of opinion about contents can sift information into good and bad information.”

Song emphasized the COSMEE’s strength, the evaluation/rewarding system, which is added to the existing beauty content platform. He also underlined, “although it is sponsored content, self-purification of information happens if tens of thousands of people evaluate that content.”

COSMEE is an SNS type of beauty platform where users can upload their contents that are related to cosmetics and beauty. The unique thing is that both creators and general users are rewarded with ‘COSM,’ an Ethereum-based cryptocurrency. It is a beauty version of Steemit, a blockchain-based SNS.

COSMEE aims to create a beauty ecosystem created by not ‘influencers’ but ‘creators of contents.’ COSMEE made an assessment that it is hard to share authentic information because existing information created by influencers are made by sponsorships in the beauty industry. In addition, through this, COSMEE also has a goal to fairly distribute the reward that is concentrated on only specific influencers.

Unlike existing beauty-related applications, COSMEE is designed to reward both creators of contents and consumers with ‘COSM.’ This can motivate both creators and consumers, leading to more active participation, according to Song. The reward can be given out for activities such as creating contents, voting up or down to other users’ posts, or writing comments. Song said “as the service launched, the reward for users are given for the first time on August 20” and “the highest reward gained on that day was 2,000COSM (around 76,400KRW as of August 22).”

Why did he try to connect the blockchain technology to the beauty industry?
Song explained, “in the case of Korea, the beauty industry has strengths in every aspect including Original Equipment Manufacturer(OEM), Original Development Manufacturer(ODM), marketing, and circulation power.” He also accentuated the fact “the innovation and development generated from seven or eight thousands of spider web cannot be caught. The beauty should be Korea.” Actually, the total retail value of the Korean beauty market is about 13 trillion KRW and that of the global market is 500 trillion KRW. These outstanding numerical values are compatible with the total value of the cryptocurrency market, which amounts to 200 trillion KRW. Starting from the Korean market, COSMEE will expand its service area globally to China and Thailand, to name a few.

In the field, experts foresee that the Cosmochain’s strategy to use the blockchain technology in the firmly grounded market is effective in attracting funds from institutional investors. Currently, not only Kakao Investment but also Hashed, Neoply, and GBIC participated as institutional investors of Cosmochain. Among these, although the details of Kakao Investment are not specified, experts in the field estimated that the amount of its investment is at least several billions of won. In the market, based on the investment of Kakao Investment, there is even a prediction that Kakao will collaborate with COSMEE to create a service ‘Kakao Beauty.’

COSMEE is the first DApp(Decentralized Application) launched in Korea. That means, it is the only blockchain DApp you can download from Google Play store and use in Korea. Currently, people have to use a web browser instead of a mobile app in order to get any blockchain DApp. The fact that there is no distribution channel like Google Play Store or Apple’s App Store has been regarded as the limitation for the blockchain DApp to attract the general public. On March, SK Telecom announced that it will develop a platform to offer blockchain DApps before the end of the year in the same context. Kakao also pushes forward a development of DApp to be used within its subsidiary platform through an affiliated company specialized in the blockchain technology. COSMEE lowered the barrier to access of users by embodying the DApp as a mobile app in the harsh service environment for DApps.

Song will expand its service as a platform to provide data to the marketplace by linking users of COSMEE to the beauty industry in a long term. He views that “the beauty market needs more and more data and the amount is up to hundreds of millions of won” and “it is possible to build a market to sell data about age, sex, skin type, and so on.”

Another goal of Cosmochain is ‘Next YouTube.’ Song said that “one of the reasons YouTube grew up sharply is that it rewards creators” and “through the rewarding system for creating contents, COSMEE aims to grow up as a platform like YouTube.”

— By Jaeyeon Won (Seoul Economic Daily)

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