Mr Andrii Shapovalov, the CEO of STAPMSDAQ, was interviewed by the American Philatelic Society’s Media Team in December 2021. Here we publish the most important fragments of the talk. Read it until the end to stay up-to-date regarding the latest trends in stamp collecting.
APS Media Team: Could you give a brief introduction to your company and philatelic background?
Andrii Shapovalov: My name is Andrii Shapovalov. I’m the CEO of STAMPSDAQ, a startup that is developing a global NFTs crypto philately blockchain marketplace. Our idea is to unite all postal administrations in a unified digital stamps market. The offer that we’re bringing to the postal administrations is based on a zero investment proposal. This means that there is no need for postal administrations to spend money on the production of NFT philately or NFT stamps, as they can do it cost-free.
But getting back to the question, in the early ’80s, stamp collecting was my hobby at the time. It was generally a hobby in town and at school so I naturally engaged in it. I was a collector probably up until university, then life went in a different direction and I pretty much stopped collecting stamps. I still have my old collection though. It was preserved by my parents and kept in a safe place.
Around 2015/2016, I got into digital collecting with Topps trading cards. They were developing their digital trading card applications in Google and Apple stores, and I got hooked on that together with my son. Then, I discovered blockchain in 2018 and that got me thinking about technology and which market I would be able to develop if I created my own company. At the time there were a lot of opportunities available.
At the beginning of last year, we started communicating with the Universal Postal Unions digital transformation department with the idea to create a common marketplace for NFT philately. It took some time, I would say, to explain the idea and show how it may work. Then in November 2020, we got our membership with one of the subdivisions called .Post Group. This was our way in to get our idea of creating the global postal industry.
APS Media Team: Are there any other organizations that you’re currently working with?
Andrii Shapovalov: By the way, if you get a chance, there was a recent issue of the Union Postale. This is the UPU magazine that they produce, I think four times a year. There’s an article with me talking about our relationship with UPU. The major task is to get UPU eventually working out a standardized global approach or a global agreement. So in parallel, we are talking to many postal administrations to sign some form of a cooperation agreement. This can be a simple license agreement for the stamp images, or this can be a full-scale partnership cooperation agreement. It depends on the willingness and desire of the management board of a particular postal administration. Currently, we are talking to about 40 to 50 postal administrations in parallel.
APS Media Team: That’s really impressive. So what were some challenges that you ran into when you were first starting STAMPSDAQ?
Andrii Shapovalov: Well, these are two concerns I will currently attempt to deal with. The first concern is that generally, the crypto topic was, and still is, a little bit controversial, especially from the legal perspective. Out of all 235 postal administrations around the world, around 93% of them are fully governmentally owned. That creates an extra layer of responsibility and due diligence that is required in order to make a deal.
Another concern of the postal administrations was that digital philately will kill traditional stamp collecting. We are addressing this issue at each meeting, explaining that the reality is the opposite. What we see today is that philately is an aging hobby, and the younger generation is going into the play and learning direction. The blockchain and NFT formats are the technologies that can offer both experiences.
APS Media Team: Can you give some examples of your competitors in the NFT philately market?
Andrii Shapovalov: Actually, there is no competition in this area right now.
I can’t even say that the NFT stamps exist in the full sense. Nominally they do not exist. In 2019, the Austrian post was the first to issue crypto stamps. The format that was used and is still used by the post is issued in hard form and comes with the NFT twin. So, what you actually buy is a two-in-one solution where you can use the paper to collect or pay for the postage, and the NFT kind of comes as a compliment, like a gift. At least this is my view of this.
There are several other administrations that have experimented with the same format. However, what is actually happening is that this format does not allow the creation of an active, cost-efficient secondary market. This is because some of the stamps are issued on the Ethereum blockchain, and some are issued on the dai blockchain.
We are building STAMPSDAQ keeping the interests of the collector in mind. We are 100% collector centric. The STAMPSDAQ blockchain is a gas-free blockchain for all transactions. So the only thing that will exist for the collector is the traditional marketplace transaction fee. Our job is to make sure that the results of our negotiations with postal administrations benefit the collector. In the long term, transaction fees will generate more income for postal administrations than primary sales.
APS Media Team: What currency solution are you currently using on the STAMPSDAQ platform?
Andrii Shapovalov: Dai is the currency solution. The STAMPSDAQ blockchain is a dual currency ecosystem, which means that we will have the stable coin, the payment currency in the system. Then there’ll be another staking token, called staking coin, which will be used for operating the blockchain nodes. Dai is an instrument for us to peg our stable coin. So, 1 dai = 1 dollar.
APS Media Team: So are you focusing on only stamps that currently exist or are you planning any unique designs?
Andrii Shapovalov: The way we put our offer to the market is based on the proposal to bring the history of philately into NFT format. I was not able to find the exact numbers since it’s difficult to get statistics on postal markets, but I estimate that there are close to 1 million unique motifs of stamps issued over 180 years with all the existing and dead countries and territories, etc. That’s a huge asset that’s basically sitting on the shelves of postal administrations and can be utilized, or brought alive again into NFT format.
The version of the revenue structure that we propose is based on five levels of rarities.
- Common — has a limited edition of 10,000 copies
- Rare — has a limited edition of of 1000 copies
- Super rare — has a limited edition of 100 copies
- Ultra rare — has a limited edition of 10 copies
- Unique — has a limited edition of 1 copy
Each rarity level will be different by its design. The way it works is that we take the original picture of the stamp and develop five digital variations of it. So first you have a static version. Then you have a simple animation, then you have an animation with little detail. Next you have another animation with even more detail. Then the unique one is like a little cartoon with sound and some story behind it.
APS Media Team: How did you come up with this pricing tier structure?
Andrii Shapovalov: Pricing is another example of a collector centric approach that we try to employ. If we would issue 1000 stamps, for example, this would probably be limited to only 1000 people. We’ve opted to go and make it more affordable to the mainstream collector. What we are suggesting is the pricing may vary based on the agreements with postal administrations. This means that not every stamp will cost the same on STAMPSDAQ. What we’re trying to do is persuade the postal administrations to work with us and come up with a price that will allow people to not spend thousands to get the collection in full. For example, with the postal administration of Côte d’Ivoire, we will be selling their stamps via the traditional method for the American market, called backdrop. So when you buy a pack of stamps, you don’t know which rarity you get. It’s randomly pre-minted. There’s a factor of uncertainty that you get when you buy it, but it’s also a chance to get a unique, ultra-rare version for the same price as the common one. So it gives the same opportunity for every collector to get a rare stamp in their collection.
APS Media Team: You’re currently in the close beta testing stage of the project. Is there a roadmap for future stages?
Andrii Shapovalov: We are, at the moment, fine-tuning the marketplace and the blockchain. A couple of weeks ago, we signed the blockchain audit agreement with one of the blockchain auditors. We expect the results in one month. So again, this will all be made public from both sides. The auditor will publish our report on their behalf, and we will publish it on our site as well. It’s an absolute, reasonable and necessary requirement for any blockchain project to be verified by an independent party. This is because collectors have to feel secure that this is not a scam or an unprofessional enterprise. They have to be persuaded by an independent party that everything that is implemented here is according to industry standards.
APS Media Team: Going off of that, how are you planning to manage security risk?
Andrii Shapovalov: Blockchain by itself is secure. The major security parts will be managed by a third party solution. We are not in a position to create something new in that area.
The personal data and KYC data will be managed by the financial partner. For example, the security we have is a cloud solution. Technically, we are not keeping the server somewhere in Kyiv, or Warsaw or any other place. This is why the STAMPSDAQ blockchain is rolled out on Amazon servers. We’ve made the choice in favor of Amazon because it was something that we liked more than Microsoft or Google. So from that side, it’s technically secure. In addition, from the security side, it is worthy to note that we are incorporated in the European Union. We are in the process of obtaining the crypto license which will allow us to be the wallet providers and conduct crypto exchange which is usually done by third-party solutions.
In our case, we have the legal possibility to create our own exchange. I don’t know what we will use eventually as it will depend on the cost, but it gives us an extra layer of flexibility and protection in case the whole market goes crazy over gas-free fees. We might be able to offer solutions that will be more reasonable to our customers.
APS Media Team: To attract older stamp collections, the real-world applications of the NFT’s are very important. So I know you’ve mentioned before that you’re partnering with some museums or galleries to offer people free access with their purchases.
Andrii Shapovalov: Yes, the second branch that we are cultivating is the art industry. We are focusing primarily on public museums and work together on production of NFTs art.
