An Insightful Paper on GINOA
Written by Bartu Utku at University of Amsterdam
GINOA
Humanity is now in an era whereas the Web 3.0 transition is in progress and all the new technology companies are touching from it on any corner as well as trying to build it. Hence, the NFTs are impossible to ignore by the time this transition. NFTs effect on real life basically business and social media is yet to be observed, it is becoming popular day by day with attracting more attention. I’ll try to briefly summarize where are the NFT markets and the start-ups who are trying to find a place in this newly emerged market and where the GINOA, first NFT and metaverse appraisal service to serve this need in the market.
Quick Introduction to NFTs
NFTs, non-fungible tokens, are items in a digital system with a blockchain backing ownership structure. So, any of those NFTs are in the market has a feature of being unique. Basically, NFTs are non-interchangeable and non-replicable data that is laying down on the blockchain. The usage areas of NFTs are changes from art collections, gaming collections, event attendances, domain system and ownership of any type of utilities.
The one of the very first NFTs were colored coins and name coins. Rosenfield (2012)[1] Colored coins are the initial idea of appointing uniqueness and utility on Bitcoin, yet Bitcoin’s blockchain does not allow that wide of usage. So, Namecoins were emerged in Ethereum chain. They are basically operate as a decentralized domain name system, the “.bit domain. It enables to round about through the censor on the internet etc. Yet these are hard to achieve through Bitcoin but not with Ethereum main net. As Ethereum’s seed idea covers to benefit from the blockchain technology on digital assets through the tailor-made currencies like colored coins, ownership of physical assets i.e. smart property, non-fungible assets such as domain names as well as the smart contracts that are the complex way of bonding the assets on a code an also for DAO (decentralized autonomous organizations).
Basically, Non-fungible tokens are
- A system to demonstrate anything unique as asset backed by blockchain technology of Ethereum
- Widening and providing more capability to content creators than it’s been before
- Backed by smart contracts thanks to the Ethereum’s technology of blockchain
As stated by Ethereum community[2] (https://ethereum.org/*): “As everything becomes more digital, there’s a need to replicate the properties of physical items like scarcity, uniqueness, and proof of ownership. For example you can’t re-sell an iTunes mp3 you’ve purchased, or you can’t exchange one company’s loyalty points for another platform’s credit even if there’s a market for it.”*
Starting from 2017, first NFT projects, following the name coin, hit the market successfully. Those are CryptoKitties and CryptoPunks. These two projects provide inspiration to investors to consider of NFTs important role in the future of blockchain. LarvaLabs, inventor of CryptoPunks, is one of the first Tech Group that inserts the art angle in NFTs and still acts as the leading power in market. Then, markets witnessed a number of new projects that elevated the attraction towards NFTs in some high volume such as Beeple’s (a digital artist) $ 69mn auction sale of one piece NFT that constitutes of photos of 5,000 Days. Also, Bored Ape Yacht Club’s collection was a game changer with the involvement of number of celebrities and footballers. These were followed by digital assets as metaverse lands, the most famous base to buy a metaverse land was from decentraland.
Thanks to the all acceleration in the market in NFT, IntoTheBlock’s[1] year-to-date chart shows that the global trading volume of NFTs grew from $16.94 billion on January 1, 2022, to $54.58 billion on April 17 2022.
Idea of GINOA
The belief against NFTs are getting stronger day by day which was evidenced by the increasing volumes. Yet, the following questions are being asked by most of the market participants.
Those questions are “What about NFTs’ valuation? Does the pricing of NFTs are speculative or not? How about the liquidity of them? Where and how NFT holders or Investors can reach to the right bids and offers?”
This is the point where the idea of GINOA was born. In order to eliminate the speculative or incorrect pricings in the market, GINOA was founded as a first NFT and Metaverse pricing expert. It is backed by an artificial intelligence that provides pricing expertise to NFT collections.
GINOA was founded in the end of first quarter 2021 as a startup with 4 founders with various backgrounds of IT, Investment Banking, Marketing and Crypto Trading. It was only started with a social project that helps users and investors to understand the pricing ecosystem and not being effected by scams and overpriced items.
Therefore, the “WHY” of the GINOA was the purpose of serving the NFT community to meet the need of current exposure from market volatility and speculative valuations. GINOA’s mission is depending on society’s needs. As Co-founders are an early NFT investor, even its office is in Metaverse. You can visit GINOA’s office in Decentraland. Couple of years ago, when we started to discover the market we noticed that there are some significant problems such as lack of information and overpricing etc. That’s why we learned the metrics of this market day by day and increased our knowledge about Virtual & NFT collections, but we realized the point that Web 3.0 should be backed on artificial intelligence for the purpose of sustainability. Besides ,that is the only way of being transparent and objective. GINOA is trying to create a world for the NFT community where NFT holders/investors can ask the fair price for their NFTs to buy or sell on Opensea, Larvalabs & Decentraland. So, once GINOA is able to eliminate the pricing mismatches through its pricing mechanism supported by artificial intelligence, it can benefit from this through its revenue streaming products.
The GINOA’s artificial intelligence works on historical data and gathered it in a pool as per the characteristics of the collection and historical trading prices. With the data collected from the Ethereum network and through the help of TensorFlow (Google’s a machine learning mechanism) to decrease the errors and Amazon AI, NFT & Metaverse collections are priced at optimum prices which we call as “GINOA price”. After this analysis stage, AI provides the most accurate and proper price thanks to its machine learning and tells you whether the current selling price of NFT & Metaverse is expensive or cheap.
In the early stage of GINOA, its developers tested the product with most liquid 3 NFT projects via artificial intelligence by synchronization of Ethereum main net. After the dataset integration, our beta version was started, and we add 2 more collections and made the last test of the Beta version in July 2021. Finally, in October 2021 our Alpha version of ginoa.io has become alive. Since then it’s working on its machine learning mechanism to increase the pricing accuracy to higher level. Due to its limited funding, it started to provide pricing valuation with limited number collections namely, CryptoPunks, Meebits, Bored Ape Yacht Club, Decentraland and Clone X.
Ginoa uses Amazon AI for finding a fair price for each collection item, it helps users to learn the instant value of NFTs and Metaverse lands. Ginoa will solve all pricing problems including scoring NFTs for lending & borrowing platforms.
Details of Innovation for GINOA’s Services & Products as per Market Needs
GINOA’s innovation stage only focused on the needs of the NFT community, hence it will be serving to them on 5 separate product line as below,
- GINOA pricing service: This service will be free of charge
- 3D map of Decentraland: This service will be free of charge
- NFT Barter Place: These barter trades will be subject to Fees
- Autonomous NFT Trader: There Will be Portfolio management fees
- NFT Pawn/Factoring: These barter trades will be subject to Fees
- Ginoa Pass: Ginoa’s NFT Collection for Ginoa-wide internal utilities.
GINOA pricing service is a mechanism fed by AI as detailed on the GINOA’s introduction part. Of course, the historical data was not the only metric on pricing calculations. First of all, our historical executed pricing data input was weighted as per the exponential time weighting. So basically, while we are doing pricing valuation, we use the Exponentialy Moving Average Model. This means that, AI and machine learning mechanism is gathering the data from the main net but appointing a higher level of weight for the recent data rather than the past ones. The EWMA model appoints a decay factor λ, where 0 < λ < 1, that represented to weight each day’s percentage price change over the market data. As said before, more recent days receive a heavier weighting than older days. This model helps us to focus data storage, enable us to follow the daily volatility changes as well as help us market forecasts.
Additional three metrics for the AI backed pricing mechanism are the rarity of collections or metaverse lands, current market popularity of those specific collections and probability of liquidation of those unique digital assets in the market. There is a simple positive correlation on rarities, if a NFT’s rarity is higher, it means that it is more expensive than the other comparable NFTs. Couple of tools in the market that provides ranking for rarity over the NFTs, namely Rarity Sniper is one of the most popular one. The thing is, having the information for rarity is not sufficient to determine the pricing, it’s just one of the many indications that needs to be considered. Popularity is a very subjective metrics to comments on it, hence we’re relying on the team’s experience on NFT market as well as the recent trends, reports that are issued in the market. Last but not least, the liquidity and volumes of bids and offers in the market are to be focused for those specific collections and metaverse lands. Thanks to the blockchain technology and our expert developer, we can scan these through the Ethereum main net continuosly. After all these inputs, GINOA’s AI is providing a GINOA price which is the price that needs to be traded. If the current market price is below than the GINOA price, this indicates an opportunity for an investor to buy it at a lower price and sell it either at GINOA price in the market or at a higher one. GINOA is representing these opportunities in its website called “ginoa.io” as best opportunities, most recommended, cherry picks, fit ones and fair ones as per their return levels.
3D Map of Decentraland; normally investors are buying lands from Decentraland over the 2D maps. The issue here is that Landlords can built a taller building if they own lands next to each other, and the only way to see this is the 3D map not 2D. Therefore, as a free of charge service to the community, GINOA will build a 3D map for Decentraland so that investors can check in a real-life format to see what’s the current building around next to their potential land. 3D Map of Decentraland will become alive on September 2022.
NFT Barter Place; liquidation problem of NFTs is an obvious problem for everyone in the market with a one-of-a-kind solution which cover number collections. Initial idea for the Barter Place came from Larva Labs who is the inventor of Meebits. Larvalabs established a barter place only for Meebits but there was no reference pricing, hence that project didn’t attract too many users. Given the fact that GINOA can determine the exact price for NFTs and Decentraland land, it can create a platform where both parties can bring their NFTs from in their portfolio that they decided to exchange or replace with other collections. GINOA’s Barter Place will enable this with Smart Contracts on the back of it. Thanks to the AI mechanism that can decide on correct pricing for both sides, counterparties who will get into the Barter Trade will have a reference rate of level to this barter with the bids and offers. Through these trades, GINOA will apply fees over the total volume of barter. Barter Place will become alive on August 2022.
Autonomous NFT Trader; GINOA’s aim is to provide pricing expertise to all products in the NFT world and be an autonomous NFT trader. Autonomous NFT Trader is a robot that finds the best opportunity to buy or sell for a fund that raised specifically for this purpose. Strategy is working like Algo trading bots besides AI interpret the market situations and investor behaviors depending on price movements. In the end either corporate or individual community members will join the fund with their preferred level of investment amount, then there will be lock-up period of 90-days. By the time the lock-up period ends, Autonomous NFT Trader will close the fund and liquidate everything. Then, the profit will be distributed through the investors and GINOA team as 75% will belong to the participants and remaining 25% will belong to the GINOA team. Autonomous NFT Trader will become alive in November 2022.
NFT Pawn/Factoring; GINOA is again focusing on the liquidity problem on NFTs through a pawn/factoring platform. Since, GINOA is able to detect the exact price, it can arrange platform similar to fintech companies invoice financing structure, where NFT holder can be a pledger over his/her NFT and a yield seeker pledgee can come to that platform to have a deposit rate investment with the security of NFT. But at least the NFT holder can benefit this pledging system by reaching the funding with specified interest rate to pay. All these agreements among counterparties will be supported by Smart Contracts. Of course, there will be a hair-cut on the funding amount for the pledger.
GINOA Pass; Service providers such as GINOA to publish NFT collection constating of 20,000 pieces to benefit from the features within the website. In order to utilize this exclusive service, you must have an item from this NFT collection in your wallet. In order to use the Autonomous NFT Trader feature, you must have a Ginoa Pass. These cards are traded in secondary markets. Having a rarer card allows client to pay less commission. The rankings are Alpha Pass with 5% commission with total supply of 100, Beta pass with 15% commission with 1900 supply and remaining will be Omega pass with 18,000 supply.
Results of these Innovations and Roadmap for funding and expanding
Following a 11-month of innovation and product improvement stages through the needs of detecting investors and market needs, GINOA needs a funding to support all the above mentioned products and their infrastructure. Hence, it has issued 10mn of Token Supply whereas 750,000 of which was a circulation supply, 3mn was locked and belong to the shareholders and 6.3mn is unlocked for private sales/investors. GINOA raised initial funds to initiate the first improvements.
First, GINOA needed to improve its power of AI backed pricing mechanism. For the time being, it’s accuracy is around 87% which is good but not sufficient to proceed with it on various products such as Autonomous NFT Trader.
Secondly, GINOA needs to improve its partnership to spread out its services to the community. Therefore, GINOA immediately had an API with Opensea.io which is the largest NFT marketplace. SO that, GINOA can scan through this API in main net before the NFTs are listed on Opensea.io. On top of that, GINOA also worked on its partnerships and integrated with Decentraland, Pancakeswap, Bitget, Coinmarketcap, Coin Gecko, Amazon AI and Bitkeep whereas all those integrations were disclosed to the community in order to increase the attraction & awareness.
Thirdly, in order to move on the next stage, GINOA needs an external funding from Venture Capitals or Angel Investors. In order to increase the accuracy of the pricing model, GINOA’s AI needs to scan Ethereum blockchain on every second. This kind of scanning mechanism requires a server investment which means capital expenditure. In addition to that, our aim is to provide pricing expertise for more than 100 collections in the market which again requires a server capacity. As all co-founders except myself are based in Istanbul, we first initiated an investment tour in domestic market which is Turkey and then Europe. Those negotiations are still in progress but then we realized that the main market for NFT investors is United States, so we decided to hire a US based Ambassador that would support GINOA on the ground with representing it at conferences summits. So, GINOA is now searching for this candidate, which I believe we should we hired it earlier. Yet, we are learning from our mistakes, we have now a US based advisory board member who will assist us to land US safely via onboarding the right Ambassador for us too.
Also, from the VC and Angel Investors tour, we’ve been asked about the proof of concept on smart contracts, back-testing with Monte Carlo simulation on Autonomous NFT Trader as well as income projection in details. Whilst we are working on these, we had a chance to explore new area where GINOA can benefit from.
We’ve provided these reports to the VCs and Angel Investors as per their request, then we had a new tour of Data Sale for the new start-ups who will be working on NFT factoring. We’re about close the first deal where GINOA will book revenue from it as the newcomers to market is more or less 1 year behind us and we’re ready to support them with the Pricing Expertise so that community can benefit more from this debut pricing expertise service.
Recommendations
For the new web 3.0 start-ups, GINOA’s initial recommendation is not to wait for search of funding. As GINOA team focused on the product development for so long, we overlook to approach potential funding counterparties. Our initial investment tour started following the product become alive that is the equivalent of 11 months.
Analyzing the potential competitors are very important on building start-up from the scratch. It would better to figure out the details of initial investment for competitors i.e. finding out the investor (VCs and/or Angel Investor) so that they can approach to them or a similar one.
Having the right team members and advisors play significant role in order to move on both on the product development side as well as investment seeking tour and marketing activities.
Expectations on NFTs Future
All in all, NFTs are already in our life and it will be spreading throughout the next years. This has start as a revolution on the digital art but it will be having a huge impact on gaming, web 3.0 as well as the consumption behavior of the upcoming generations. Therefore, keep thinking and investing on this and never give-up the hope on blockchain technology and welcome the new ones.
[1]Rosenfield, Meni Overview of Colored Coins https://allquantor.at/blockchainbib/pdf/rosenfeld2012overview.pdf
[3]Nicenko, Ana (2022) https://finbold.com/global-nft-trading-volume-grows-over-200-in-2022-surpassing-50
