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KAMAGAMES


too hard to pass KYC, to buy cryptocurrency, to register a wallet? Are these all elements that are impacting mass adoption across gaming? The team found that they were inundated with offers containing elaborate promises of success from the majority of various types of participants in the market. These promises were often clearly far beyond their capabilities. During our token sale, we received a huge number of expensive offers from various organizations, independent contractors and outright scammers for services that they could not actually provide, or in a large number of cases, did not intend to provide. We learned (very quickly) about the extensive level of fraud in this industry and why it’s such a hindrance to growth and trust.


Most of the so-called “experts and advisors” – even those with high ratings and some of whom immediately asked for a multi-millionth stake in the company – did not thoroughly understand the industry or the products. During the sale we heard many promises ranging from the unrealistic to the unimaginable. When we asked direct questions on how these professionals could help  to measure their success, we heard about their own unique abilities to “acquaint us with  manage energy”.


Another key discovery during the KGT project was the realisation that there is little sense in developing a social casino product on the blockchain. The key factors were that most social casino players want maximum simplicity and speed (they can currently pay with one click using a smartphone, without any problems or concerns). Currently, there is not a blockchain capable of processing the number of transactions that we currently have in our games – up to 1.5 million per minute on Pokerist [the #1 grossing app in 101 countries  grossing apps in 45 countries on Google Play – Ed.].


There would also be doubts that the development and support costs would not be recovered as well as the various blockchain commissions and therefore there would be no additional value for either the player or the operator with such a product.


Finally there are also a lot of unanswered questions (challenges) associated with the use of our own RNG (random number generator) on the blockchain and how to make the RNG decentralized while remaining unpredictable. We have seen that very few participants in the crypto market are looking for utility tokens in order to use them for their intended purpose. In fact, it’s the complete opposite with everyone actually looking for a speculative opportunity.


 potential future problems with the majority of ICOs whom, under the guise of a utility token, offered (and still offer) securities. This means that they are failing to comply with the relevant and required corresponding restrictions and responsibilities.


We are certain that large companies will use tokens for solving internal tasks or working with/rewarding their audience. Before our own project, at least two large companies, Line and KIK, made their own announcements and shortly before summarising our own token, we also read the news about the launch of PayPal’s reward system for employees on the blockchain. These developments clearly demonstrate the discrepancy between the expectations and the reality.


Real utility tokens are interesting to an existing audience or to the project team, but do not carry any speculative value for potential investors.


An ICO issuing tokens does this primarily in


order to attract funding and immediately places the token on the exchange. This is what certainly attracts a speculative interest in the project. There really is nothing wrong with calling a spade a spade in our opinion. In many developed countries, including the


The team found that they were inundated with offers containing elaborate promises of success


US, any project, which has a need to attract money, can do it in accordance with existing laws with the help of classical venture capital in equity, crowdfunding or an STO.


Also, we wouldn’t call a token buyer pursuing speculative interest an investor. They are rather a speculator or a trader. It’s hard to imagine somebody who has just invested money in the  opportunity after all.


 gain popularity through the tokenization of assets and then as a tool for raising funds for start-ups. Appropriate documentation and registration of the entire STO procedure will be required which, whilst it may be easier than an IPO, will be much more complicated than ordinary ICOs seen in recent years. We will see professional market participants, such as accredited investors, being able to take part in an STO. The sale of tokens to retail buyers will be blocked for a certain period and the withdrawal of security tokens to the stock exchange will be very close to the listing of  all necessary reporting to the regulatory authorities, the exchange and the owners/ buyers of such tokens.


 their future services and in the case of utility tokens, access to the actual services themselves, although in reality, all ICO participants use tokens for short-term gain, by treating them like securities no matter what they were originally classed as. To the contrary, STOs are called upon to use the blockchain to democratize the access of private capital to 


CIO FEBRUARY 2019 81


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