XYO World Q&A — Part I
On May 15, XY - The Persistent Company and XYO Foundation opened up a request for comment for our new joint project, XYO World. To our delight, we received comments from over six hundred people. The vast majority of the comments were thoughtful and well considered, and we could not appreciate your feedback more.
In particular, we wanted to identify and highlight constructive criticisms, critical questions, and well-reasoned suggestions.
We’ll begin by addressing the most common questions people submitted. Let’s dive right in.
Q: I’m having a hard time wrapping my mind around the rules, could you please explain XYO World more plainly?
A: No worries! This was the most common question we got, and we anticipated that.
Please remember, these are the technical rules with some explanation, and are the core preliminary document. It’s not a pitch deck, it’s not designed to sell the concept and product to laypersons, but those documents will follow.
Right now, we’re just laying out the rules as the groundwork. Once those are finalized, we’ll produce materials for wide release. If you’re looking for simplified information, stay tuned to XYO’s Medium and other social media.
Q: If the originating four quadtiles aren’t sold by any party, where do they come from, how are they owned, and what’s the advantage in buying them?
A: The geotokens for the originating four quadtiles are simply generated by the system. The buyers will then immediately become the owners and beneficiaries of the system.
The lack of a seller is not equivalent to the lack of an owner, those are different and both are important to XYO World. The system, itself, is the primary (first) seller, but it distributes some of the tokens, burns a few, and returns the rest instead of keeping any. (The buyer/owner becomes the seller on the secondary market.)
Unpurchased geotokens simply exist in the system with no owner. The originating four geotokens aren’t any different from any of the other geotokens in this respect, except that they come into existence without having to have their parents bought first.
This differs from most primary markets in that normally, the beneficiary of the primary sale would be the company selling or manufacturing the product. XY is making the product but has envisioned a system where it’s sold through automation without actually being the seller or making any profit from the sale.
That brings us to our next question.
Q: If XY isn’t profiting from the sale of geotokens, why are you making this product? How does XY make money?
A: XYO World is an ownership and governance system which can be used by other applications, the first of which is COIN, an immediate benefit for XY.
Another benefit of this project is to increase the value of XYO Tokens, to make them stronger and more tradable. XYO tokens have been consistently undervalued. While that was already our opinion, FlipsideCrypto has independently analyzed hundreds of tokens and repeatedly come to the conclusion that XYO was one of the most, and often the most, undervalued token they analyzed in the first and second quarters of 2020. (This finding was brought to our attention, and was not solicited.)
XY - The Persistent Company is the largest XYO token holder. Our asset becomes more valuable the more marketable XYO tokens are. And the more COIN has to offer as a product, the more valuable it becomes. Other projects can benefit from using XYO World for geolocation and we strengthen our own position by providing it. We can give away the infrastructure and teach people to use it if we continue to have a financial stake in the data it provides.
It’s the kind of business model we think we can be proud of. It provides something good for us, for our token holders, for our shareholders, for COIN participants, and for blockchain developers. The value we get from it comes from the platform’s actual market value without the need for sales. Just as with COIN, you can join in even without spending a dime, and the rest of the system still benefits.
Q: It sounds like a cool idea, but complicated. I’m afraid not everyone who wants to join in will be able to understand it.
A: That’s almost always true — we can make a product user friendly but not friendly to every user. That said, if you’ve ever played a board game, you probably know that it’s easier to learn as you go along than when you’re reading the rules.
An easy to use interface and guidance will be provided within the paradigm of the system, and support will be provided as well, so we expect most users who wish to participate to be able to do so. Use will likely take some reasonable technical understanding and learning, though.
A: Will there be any IoT integration with XYO World?
Q: IoT (internet of things) is related to the XYO Protocol; XYO World is intended to be the part of the network which builds consensus and uses established geolocation data. In theory, all of these elements will be brought together in various implementations.
We had some people ask about whether or not BridgeX would be usable with XYO World. If an app developer (including but not limited to XY) uses XYO World to build something which benefits from IoT, then any XYO node, including BridgeX, could be integrated into that app, too.
Q: What value does a geotoken have?
A: Like most NFTs, geotokens are collectible. Each one is unique, and represents a real, tangible place. You can visit the quadtiles you own, and no one else can own them or duplicate them. And as XYO World utilizes blockchain, there’s a trustless system in place to prove your ownership and its origin.
In addition to being collectible, they also represent XYO World stake. The system can be integrated into third party apps, the makers of which can choose to benefit their users using the XYO World staking system.
The first staking use will be COIN, which will have a pay structure similar to geoclaiming for those of you who already participate in COIN. Whereas geoclaiming is temporary, XYO World staking is akin to ownership. You would, effectively, become a COIN landlord. COIN is also looking at ways to demonstrate this in-app advantage of ownership with customization for your quadtiles.
Q: The document says geotokens can’t be destroyed, but then talks about burning tokens. These seem contradictory, how can you burn tokens that can’t be destroyed?
A: This system has two very different tokens, one of which is destroyed by the system and the other of which is indestructible.
The indestructible ones will always be called geotokens or NFTs. Geotokens are the ERC-721 non-fungible tokens that denote ownership of a quadtile, which demarcate real pieces of the surface of the earth.
The tokens being burned by XYO World are XYO Tokens, an ERC-20 cryptocurrency token. These are burned so that the remaining tokens are more valuable.
Q: It sounds like this system exists to benefit XYO and to get more geolocation data, is that correct?
A: Yes, that is correct. The model for XYO Network is to create a network of easily accessible geolocation data, in both relative and absolute terms, so that locations can be proven and the data can be recorded publicly and permanently.
The XYO Protocol successfully did this for relative location data, and now it needs additional absolute data, which will be provided by XYO World.
The benefits created by this system are conferred to all XYO Token holders, including but not limited to XY - The Persistent Company, who in turn takes on the development costs of the project. Smaller token holders receive the same benefits as XY, whose development costs they subsidized with their various purchases between 2018 and 2020.
Q: Why is this a joint project between XYO Foundation and XY - The Persistent Company? It should belong just to XYO!
A: The geotoken system will be owned by the XYO Foundation, but development of the first platforms for it will be covered by XY.
Based on the feedback we got, it sounds like some people believed that ownership by XYO alone would be altruistic while co-ownership with XY would be for-profit, but that’s not the case. In fact the reverse is true.
XYO Foundation isn’t taking on the burden of the development costs for a large-scale project that directly benefits XY, but does receive the benefits of new open source breakthroughs. The same will be true of any partner that chooses to use or contribute to XYO World’s open source components.
Shareholders and token holders will benefit along with XY if token prices rise. XYO will benefit when it receives new technology and infrastructure. And XYO and its volunteer developers will not be burdened with costs that are actually owed by XY or its partners.
Q: If XYO is open source, then what parts of XYO World need to be proprietary, and why is the project for-profit?
A: The portions of the system that will be owned by the XYO Foundation will be open source, but not every element of the project realistically can be open source.
Certain elements of its implementation need to be proprietary — for example any back end with stored user data, such as user account information. XYO World is not limited to blockchain, its use in apps is likely to be account-based in order to work in an accessible and convenient way, which means that someone has to take responsibility for the costs involved in maintaining those elements of the system.
What can be open source are elements that can be used by other developers, such as the geotoken NFT that will be developed and the blockchain that will have to come online. Those are useful outside of the context of just XY products like COIN, and as such will be the property of XYO Foundation for the benefit of blockchain development.
This is common among many open source projects. For example, the Android operating system is open source, but Google licenses the Google Play Store, which gives the official version of Android a competitive edge. While mobile developers all get the advantage of access to the software, Google still turns a profit in developing it by having a licensed version.
In fact, XYO World isn’t even a traditional for-profit product, in that it’s not sales based, it’s value based. Our ability to profit from this system is strictly dependent on the success of the system as a whole, rather than on who chooses to purchase it.
Thanks for taking part in this portion of the XYO World Q&A. In the next installments, we’ll be discussing in depth the best questions we’ve received, as well as the best comments and suggestions.
The next questions to be addressed will include:
How does this provide near real time or historically archived location data that’s more accurate or reliable than other options?
The tiered payment system sounds like a pyramid scheme or multi-level marketing. Is it any different?
Why are you planning both an auction system and the ability to override it by buying a geotoken immediately?
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