The WOM Protocol, which is based on blockchain technology, will enable brands to access genuine word-of-mouth recommendations. The WOM Protocol will provide a way to reward creators for their product-referring content without compromising consumer trust in the content and its creators.
WOM Token Ltd. will launch a Token Generation Event (TGE). The purpose of the TGE is to finance the creation of the WOM Protocol and to bring immediate value to the WOM Token. WOM Token Ltd. (WOM Entity) will act as an initial arbiter and then dissolve once a Decentralized Autonomous Organization (DAO) has been established.
The WOM Token will be sold through a Dutch auction. This enables the WOM Token value to be market-driven, while ensuring a fair distribution of the tokens.
The WOM Entity is building the WOM Protocol platform to enable brands to connect with fans and reward them on a global scale. It will facilitate the scaling of the WOM Ecosystem and enable monetization of word-of-mouth content for brands, creators, and publishers. It will do so without one central party exclusively profiting from the collective value created by genuine word-of-mouth content within this global marketplace. Every participant not only creates value, but has the opportunity to profit from the value growth they create as acooperative.
The ultimate goal of the WOM Entity is to structure the WOM Protocol in a way that it cannot be owned and controlled by one single entity. Instead, it will be equally owned by everyone participating in the protocol through receiving, using, or holding WOM Tokens. Changes in the protocol could lead to beneficiary groups of participants and will therefore be decided by everyone involved in a collaborative way. This will be achieved using state-of-the-art blockchain governance mechanisms for decentralized organizations.
Independent, decentralized applications (DApps), will enable brands to engage with the WOM Protocol directly without the need for a trusted third party. The DApps will list available WOM content on the blockchain and connect it to brand campaigns. These links are created through smart contracts that measure the engagement with each piece of content and subsequently reward the content creators. The WOM Token, running on the Ethereum blockchain, enables a reward mechanism to incentivize the creation and supply of WOM content without the need for a brand to pay for access.
The WOM Protocol also enables content apps, blogs, and other content distribution platforms to easily implement a new and non-invasive revenue model. Every platform that hosts brand- and product-recommendation content, alongside other forms of content, can implement the WOM Protocol.
Once the protocol is enabled, the platform’s users can earn WOM Tokens by creating and sharing WOM content. The content platform can then take a share of the WOM Token rewards and therefore does not need to
rely on an advertising model to generate revenue. Rather, the revenue comes from focusing on user experience and growing the user base of content creators and consumers.
The WOM Protocol will be designed as an open, censorship-resistant, and decentralized protocol. It may be used by any other company, app, entrepreneur, or individual who stands to benefit from connecting with a high quality, word-of-mouth content marketplace. The objective is to enable an entire ecosystem to emerge, in which any content creator, publisher, developer, and brand has access to the open-source WOM Protocol and therefore genuine word-of-mouth marketing.
The WOM go-to-market strategy focuses on apps with a high proportion of Generation Z users. Teenagers and young twenty-somethings are a great starting point to bring blockchain to the masses. They are digital natives and understand the concept of digital scarcity much more intuitively than older generations. They also grew up with social media and are open to earning extra incremental amounts to increase their pocket money.
YEAY GmbH will be the initiator and first adopter of the WOM Protocol and the YEAY app will be the first platform to implement the protocol.
As the number of participants in the WOM Ecosystem grows, so does the demand for WOM Tokens, which are needed to interact with the protocol. In this way, the network effect increases the monetary and utility value of the token over time.
The State of Online Marketing
Word-of-mouth is the oldest and single most effective means of persuasion known to humankind. In the digital era, the power and reach of word-of-mouth has grown exponentially.
Every day 2.1 billion product recommendations are made among friends on social media, across blogs, within emails, and through instant messengers. 1 People casually share photos, videos, and links with one another promoting things they have bought or want to buy, be it food or fashion, without realizing the commercial value of their voices.
The trusted relationships between consumers and their peers have the power to influence brand perception and also convert into sales. Peer-to-peer marketing is the leading driver behind almost 50% of all purchase decisions. 2 Businesses know this – that’s why they have been measuring their Net Promoter Scores for the past 15 years to see whether their consumers like their product or service enough to recommend it to their friends.
WOM Blockchain Protocol
Brands need a way to bring organic word-of-mouth recommendations into their marketing mix in a measurable and scalable way. The people making the recommendations should be rewarded. The relevant publishing platforms should be rewarded as well. And this all needs to happen in a way that ensures the authenticity and trustworthiness of the content.
Thanks to the invention of blockchain technology and digitally-scarce tokens, there is finally a way to meet all of these requirements, while enabling brands to incorporate genuine word-of-mouth into their marketing mix.
WOM achieves this through incentive mechanisms, which are enforced by tamper-proof code and executed on an immutable blockchain. The incentive mechanisms are facilitated by the WOM Token and this keeps the whole ecosystem running and growing.
The WOM Utility Token
The WOM Token is implemented as a token contract on the Ethereum Blockchain, based on an ERC20-compatible standard such as ERC777. The desired core functionality of the token contract is a decentralized and trustless way of transferring the ownership of WOM Tokens.
The WOM Token operates as a value creation incentive to set and maintain a stable value creation within the WOM Ecosystem. This is controlled by smart contracts that define the emission and distribution pattern. The WOM Token itself represents a stake in the WOM Protocol and can be seen as a reflection of the value generated by the WOM Ecosystem.
Essentially, the WOM Token enables the WOM Protocol to reward content creators, curators, and content distribution platforms for spreading the word about brands, products, and services. This increases the circulating supply of WOM Tokens in a controlled way, while value for all participants is created. The process of rewarding content creation and curation is similar to the process of rewarding block creation and security for the Ethereum or Bitcoin blockchain (AKA mining).
The WOM Token enables access to this valuable WOM content for brands. Brands can use the WOM Token to create “campaigns” with budgets connected to specific content and interaction patterns. Based on the campaign criteria and the WOM Protocol mechanisms, the token functions as a means for additionally rewarding selected content.
The content must also emphasize the creator’s true excitement for a brand or product. The higher-quality, more honest, and/or more creative the content, the more consumers will be reached. This will lead to more interactions with the content and a greater reward in WOM Tokens for the creator.
WOM Token Distribution
WOM Token Ltd. will issue a total of one billion tokens in a TGE to be used within the WOM Ecosystem. The WOM Token has eighteen decimal places to enable nano transactions.
After the initial TGE, no further tokens will be created. The tokens will be distributed in the following manner:
In order to fund the development of the WOM Protocol and its Ecosystem, WOM Token Ltd. will hold a Dutch auction to sell 35% (350 million) of the one billion total tokens. The generated revenue from selling the WOM Tokens to participants in the auction will be used to fund the technical development of the WOM Economy and the first interfaces.
WOM Token Ltd. will expand its code team and hire contractors to build all essential parts of the economy. The main contractor will be YEAY GmbH. YEAY GmbH will help to create the Ethereum smart contracts, the
WOM DApps and handle all the marketing, legal, and development operations of the initial WOM Ecosystem.
The first token buyers take an important position in kickstarting the community by funding the initial development. They not only provide the funds to enable WOM Token Ltd. to build the economy, but they also give the WOM Token its initial value.
As most initial token holders are not typical users of the WOM Economy, their overall stake must not be too high. If the stake of WOM Tokens controlled by any one type of participant is too high, the actual token flow and the whole economy could be at risk.
Sale mechanic: Dutch Auction
A total of 350,000,000 WOM Tokens will be distributed during the auction. The auction will be capped at $350 million in ETH and the effective cap will decrease over time–quickly in the beginning and slowing down over time–until the total contributions reach the current effective cap. The sale ends when the total contributions reach the effective cap or at the end of 15 days, whichever is first.
Unlike usual Dutch auctions, participants do not bid on a number of WOM Tokens at a given price. Instead they contribute the total ETH amount they are willing to spend. Once the auction ends, the token price will be determined as a function of the total amount contributed divided by the number of tokens available (350 million). The earlier a participant contributes, the more WOM Tokens they receive as the price decreases.
Everyone who participates will pay the same end price per token, regardless of how early they contributed.
Use of Token Sale Funds
The funds raised from the Dutch action will be allocated as follows:
This article does not constitute investment advice.
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