The Siglo Protocol: How It Works

A look inside the blockchain protocol for digital and financial inclusion.

In some ways, the Siglo Protocol is a fairly simple concept.

Brands and other entities need consumer insights. Users, especially in emerging markets, need more connectivity and are willing to monetize an asset value that each person has: their attention and non-private information.

We built a platform where users can exchange those value assets for more connectivity. But when we start talking about the different players and stakeholders in the ecosystem, it can get more complicated.

Below is a visual representation of a standard use case. Keep in mind, that the protocol can be used in many different ways, and we already have developers getting creative with the applications (more about this in another post).

This is a sequence diagram that shows chronological events from top to bottom. Across the top, the five players in the Siglo ecosystem can be seen:

1. Brands (or other sponsors)
2. Facilitators
3. Mobile Operators
4. dApp
5. Users

Facilitators are commercial entities like Farrow Ventures, a company that will provide SDKs, APIs and other tools to make it easy for dApp developers to build on Siglo. This isn’t required, but at the beginning, we believe facilitators play a key role in growing the ecosystem.

Farrow Ventures is the first example of this and it has already launched the first dApp to run on Siglo: the Pig.gi app.

As a Facilitator in the Siglo ecosystem, Farrow will share its network of airtime providers, operators, brands, and agencies with developers of other dApps on the protocol.

The next stakeholder in this ecosystem is the brands (as pictured above). Let’s say, for the sake of example, that “Brand X” wants to become a sponsor of mobile internet in a certain market. Through a Siglo dApp, “Brand X” can offer a survey to dApp users and purchase attention from users in exchange for dApp coins that users can spend on more connectivity.

Here’s a step-by-step scenario of what happens when “Brand X” decides to sponsor a campaign with a budget of $100,000 USD:

Step 1: Funds are Placed in Escrow

Right away, these funds are converted to Siglo (SGL) token on a third-party exchange. These funds are placed into escrow governed by smart contracts set to release funds when the escrow conditions are met.

The exact numbers may vary, but in this example, 30% of the budget gets set aside as revenue for the facilitator and the dApp who brings the users.

The other 70% is also set in escrow as product or token that goes to the users who opt-in to participate in an offer or share their attention.

Step 2: dApp Coins are Created

When the funds for users are set in escrow, a fixed number of dApp coins are created. These will be paid to users who chose to participate in-app offers.

Depending on the dApp, these coins could be Pig.gi coins or branded as any dApp coin when they are earned by the user.

Step 3: An Offer for Attention or Participation is Shared with the User

Users are presented with an offer. Let’s say it’s a 5 question survey about product preference from “Brand X” that pays a user 20 dApp coins if they complete it.

A user can decide to participate or not. If they do, their anonymized answers will be shared with “Brand X” at the end of the campaign.

Step 4: The User Engages

The user participates in the 5 question in-app survey and completes it.

Step 5: The User is Paid in dApp Coins

The user earns dApp coins. The reason for earning dApp coins (backed by Siglo token) is simple: the in-app prices for products (like airtime) are stable and not subject to a volatile free floating token price.

This is important, especially in emerging markets.

Step 6: dApp Coins are Exchanged for Product

A user exchanges his or her dApp coins, in-app, for airtime for their mobile device. The dApp coins are burned. A user can also choose to change his or her dApp coins for Siglo Token, to hold it or send it to someone else.

Step 7: Escrow Fulfilled

The escrow conditions set forth in the smart contract are now fulfilled. The dApp coins have been given to the user, the user redeemed these for a product, and the other players (Facilitator and dApp) can now receive their share of the deal — from the 30% of SGL tokens that were set aside at the beginning.

Step 8: Insights for the Brand Sponsor

Finally, the anonymized insights that were collected from users are now shared back with “Brand X”.

Now, all parties have been incentivized, users have more connectivity, brands have new insights, and Facilitators and developers earned their share of the transaction.

Everyone’s happy :)

by Joel Phillips, Siglo co-founder and CEO