XYO World Q&A — Part II
On May 15, XY — The Persistent Company and XYO Foundation opened up a request for comment for the new joint project, XYO World. In the first installment, we discussed some of the more common questions submitted by users. Today, I’d like to discuss some of the most interesting and thought-provoking questions we got, with substantial answers that really get to the heart of XYO World.
Q: How does [XYO World] provide near real time or historically archived location data that’s more accurate or reliable than other options?
A: This is an excellent question, and I’m glad it was asked because it suggests a strong grasp of the project and the rules as laid out, and brings attention to the fact that we need to further explain the concept and the usage.
What makes XYO World useful for developers is the way it delivers supplemental geolocation data. The additional data it can provide along with location, and how it integrates with the other XYO systems and virtually limitless platforms is unique.
To quote XY CEO Arie Trouw, “It allows for regional [or] location based features that can be shared across multiple apps.” Apps that use XYO World have shared geolocation data, can pull features from XYO World, and can build on that data. It’s a single sign on for location data across apps and developers.
Additionally, the staking system overlaid visually on existing location data provides a snapshot of human expectations for traffic and use of that area. While this does not provide proof of location, it does provide a common data set which could be used for extrapolation purposes and utilized by any app built with XYO World integrated.
Most such systems use historical or real-time data to provide insights, but XYO World crowdsources human beings to see where interesting things are expected to happen, without having to rely solely on whether or not interesting things have happened there before. And it incentivizes early action (and thus provides early indicators) by giving the first to buy the largest stake. In this way, it can help anticipate fluctuations in user density that would otherwise have to be monitored by conventional means.
Crowdsourcing has been used before for enriching geolocation data. One of the best examples is the Waze app, which taps its users to warn others of traffic conditions such as traffic jams, road closures, and even speed traps. It’s ideal for fast, on-the-fly information about a location that appears and then disappears as quickly as it’s needed.
Something less ephemeral is needed for other applications, so the data can be used for building those applications. XYO World can provide a realistic sketch of network usage and user density ahead of time, based on the number of parties staking quadtile ownership using it. This is why staking is currently a popular model for blockchain projects. It incentivizes crowdsourcing and demonstrates consensus. XYO World gamifies the process and makes it accessible and attractive.
Disneyland in California introduced an annual pass called the Flex Pass, wherein members reserve their dates of use ahead of time, and in return receive a steep discount on the dates that are open to them through reservation. This gives the park a realistic extrapolation of attendance on that date, and management can staff and supply appropriately.
Staking is becoming an effective method of forecasting across industries. Last year, Disneyland in California introduced an annual pass called the Flex Pass, wherein members reserve their dates of use ahead of time, and in return receive a steep discount on the dates that are open to them through reservation. This gives the park a realistic extrapolation of attendance on that date, and management can staff and supply appropriately.
The basis for the infrastructure is already well in progress from the user base for XY’s COIN app, who are already using a geoclaiming system for temporary stake and providing other data relevant for developers. As XY’s app suite and app installs increase, the XYO World product becomes more viable for adoption by outside partners, and has the potential to come to market with critical data infrastructure already in place.
Q: The tiered payment system sounds like a pyramid scheme or multi-level marketing. Is it any different?
A: It’s understandable that people saw it this way, but the resemblance is superficial.
XYO World differs from an MLM in a number of key ways. As geotokens have no primary seller and geotoken owners have no choice in the child geotokens being sold, nor are they required to do anything to sell them, this payment structure is a relatively small element of the system. It does not rely on recruitment or high-pressure sales. And there’s no upline/downline dynamic; each new generation replaces its predecessor and the top of the hierarchy constantly rotates out once the eighth generation is reached.
In an MLM structure, being the top of the “upline” is normally the only way to profit because the “downline” is being taken advantage of, relying on a small percentage of their own sales while their “upline” receives a percentage of those sales while recruiting others to do the same. The bottom rotates out because they aren’t making any profit, rather than the top rotating out by design as in XYO World. Successful MLM participants are usually among the first to join the MLM, and just recruit others to sell for them. The sellers then make very little, if anything.
In XYO World, newer buyers replace older buyers with each generation and then the older buyers eventually just drop off of the tiered payment structure. Users can’t recruit people en masse because each geotoken only ever has four additional sales to be made, most of which goes right back to the person who made the purchase. (A total of 16,384 is the maximum number of geotoken sales that can affect a parent geotoken, but most of those represent payments of fractions of one percent. The maximum number of possible sales affecting each geotoken that are 1% or more of the sale price is only 64.)
The system of requisite geotoken subdivision exists to ensure that important quadtiles can’t be squatted and forced into stagnation. Each time the geotoken is subdivided, so is the ownership stake for the parent geotoken. If this was done without compensation, it would effectively punish users for early purchase, eroding their stake with no reward.
The XYO World selling system incentivizes the early purchase of desirable geotokens, rewarding users who make good decisions early. For the system to work effectively, it needs to reward those people, hence a direct, fair, and market-determined payment system that’s reliant on those subdivisions.
So while the distribution from geotoken sales undeniably has a hierarchical payment structure, that’s pretty much where the similarities end.
Not only are pyramid schemes illegal, their technically legal counterpart, multi-level marketing companies, slip into becoming pyramid schemes with enough regularity that the Federal Trade Commission is known for frequent crackdowns. There’s even a community of consumer advocates dedicated to acting as MLM watch dogs and dissuading people from participating.
We are open to other suggestions and modifying these rules if there’s a better way to achieve this goal.
We’re not going to participate in that kind of marketing, but we do need a way to incentivize early adoption and token burning. We are open to other suggestions and modifying these rules if there’s a better way to achieve this goal, and we will do so in time if need be.
Q: Why are you planning both an auction system and the ability to override it by buying a geotoken immediately?
A: Some participants in the survey had the concern that the “buy it now” feature in the XYO World auction system might result in reduced value for geotokens, or might wind up overriding auctions as the primary mechanism for purchasing. While the “buy it now” option is still in the preliminary stages of consideration, we think it has the power to enhance value and make the system more fair, reducing inflation and increasing engagement.
Probably the most important feature of the XYO World “buy it now” price is that it will always fluctuate. Our shared familiarity with the term likely comes from eBay, where the price is always static and often slightly inflated.
In XYO World, this price will always start as a multiple of the current auction bid. This multiple hasn’t yet been determined, so for the sake of argument, we’ll say it’s 300% of the starting bid. This price will rise each time a new bid is made, to 300% of the new bid. Over time (the increment and period has not yet been determined), the “buy it now” price will drop towards a predetermined minimum, which will also be a multiple of the current auction price, say 200%.
This helps stabilize the auction system in a few ways. First, it helps ensure that unreasonable inflation through bidding wars doesn’t occur, keeping market values fair. This is especially important since child geotokens’ prices are based on the parent’s selling price. On the flip side, it may help raise the value of a geotoken that might otherwise have been undervalued. By permitting a buyer to decide they believe it’s worth more than its current bid without the guarantee that the price would go any higher at auction, that buyer is making a declaration of perceived value.
Additionally, it has the potential to help geotoken sales move along quickly rather than taking hours or days in every case, allowing for an instant gratification that keeps the system engaging. In particular, it’s friendly to new users, who might otherwise be inclined to have a look at XYO World and abandon it as soon as they see they can’t jump right in. They can snatch something up and then familiarize themselves with their new geotoken and the system.
The most valuable geotokens present the most interesting use cases for “buy it now.” At the very least, it should make things fun.
The most valuable geotokens present the most interesting use cases for “buy it now.” Since they’re the most likely to generate bidding wars, “buy it now” is going to be tempting, but that price will also be a risk as it’s going to be steep. At the very least, it should make things fun.
But the more common use is likely to be for purchasing less expensive geotokens. Cases where people don’t mind the price tag and are just looking to make their purchases quickly without having to monitor them. Ultimately, this feature has been imagined for ease and convenience.
Thanks for taking part in this portion of the XYO World Q&A. In the next installment, we’ll bring up some great comments and suggestions. These will address topics such as:
– Requested features
– Improvements that can be made
– Insightful comments about the XYO World system
Please subscribe to the XYO Medium feed to make sure you never miss an important article!
