In this interview, Spin Protocol’s founders Jay Yu (CEO) and Kyle Kim (CBO) share their insights into e-commerce market, explaining how their project could help businesses get rid of intermediary burden.
With the remarkable growth of e-commerce, the influencer marketing is attracting attention as a new breakthrough. However, suppliers and influencers are suffering from a variety of problems caused by non-transparency and the intermediary intervention. To find out if there is a workaround, and how precisely the situation can be changed, Coinspeaker reached Jay Yu and Kyle Kim – founders of Spin Protocol, decentralized commerce engine, which empowers suppliers to directly reach target influencers to sell their products worldwide.
Coinspeaker: “In his debut book ‘The Tipping Point: How Little Things Can Make a Big Difference’ Malcolm Gladwell introduced the Law of the Few according to which the success of social epidemic depends mostly on three kinds of people: Connectors, Mavens and Salesmen. Could the massive adoption of SPIN Protocol turn this nebulous concept into a credible business model?”
Spin Protocol Team: “We believe that with SPIN Protocol, many brands or products will be able to reach the “tipping point”.
As Malcolm Gladwell pointed out, a social epidemic occurs unintentionally at an unexpected time and these days, Influencers have become important contributors(factor) in each stage of such “unexpected” social epidemic(diffusion). Influencers nowadays serve the combination of the roles of conenctors, specialists, and salesman. They not only produce information but also distribute information with objective and reliable information in their own professional or specialized areas. Especially, so-called Micro-Influencers, who deal with specific topics in depth are growing rapidly in various fields as much as Mega-Influencers. As Influencers are fully connected, their followers will be the first saleman initiating the social spread.
By eliminating interventions between Influencers, Suppliers, and Consumers, SPIN Protocol aims to accelerate the process of “social epidemic” and assist each participant in the ecosystem to leverage such social phenomenon to reach the “tipping point.”
Coinspeaker: “Are there any specific requirements to become an influencer or a supplier in terms of SPIN Protocol?”
Spin Protocol Team: “There is no particular requirement to become an Influencer or a Supplier on SPIN Protocol. Suppliers however, need to submit the documents such as a proof of brand ownership, business license, trademark rights and POA (Power of Attorney) to register products onboard. As long as such minimum requirements are met, Suppliers and Influencers can agree on the revenue share without any intermediary interventions and freely engage global consumers.”
Coinspeaker: “The S-Fame evaluation index is expected to put to an end to the manipulation on influencers’ sales performance. But is the index itself fully protected from manipulation and slander?”
Spin Protocol Team: “S.FAME of SPIN protocol is calculated based on the weighted average index of all elements including the number of sales, sales revenue, user inflow, number of followers, conversion rate, and the number of agreed deals with Suppliers to rate Influencers.
All the token or fiat transaction will be stored On-Chain. In other words, all the sales and revenue generated from consumer payment will be recorded On-Chain and cannot be modified or revised for rating. Such On-Chain data is given higher weight.
Also, all the user inflow can be tracked from Off-Chain via a separate URL given to an Influencer. Any abusing cases that manipulate the customer inflow and the number of folloers to increase S.Fame will be detected based on Conversion rate(revenue/user inflow). For example, such Influencer with massive number of followers but with a very low conversion rate may indicate that Influencer is using an abnormal means to boost the number of followers or users. In this case, S.Fame will go down.”
Coinspeaker: “According to the token economy scheme, supplier can get the sales revenue in both SPIN token and fiat money, but influencer is not given a choice. What is the rationale behind it?”
Spin Protocol Team: “First of all, Influencers are rewarded in token to prove the transparency of the influencers’ activity data. All token transactions will be stored On-Chain, enabling the transparent recording and management of all Influencer activity data including sales.
It would be ideal if Suppliers and Consumers use tokens only but for practical reasons, it is difficult to force force them from the initial stage. Therefore we will start with Influencers, who is the most important beneficiary and participant in our ecosystem to use our tokens as the main currency at least within our ecosystem.
The more the influencers believe in the value and the potential of SPIN Protocol, the more will they participate actively and even prefer to be rewarded with our tokens. We believe creating such loyal and enthusiastic Influencers is the best way to make this ecosytem successful.”
Coinspeaker: “Let us delve into the token economy of SPIN Protocol. What should influencers and customers do to get rewarded for the contribution?”
Spin Protocol Team: “Influencers and Suppliers make an agreement on revenue share(R/S) ratio and tokens will be rewarded based on the R/S agreement.
Customers receive reward only for payments in tokens and get additional reward for participating in Influencer evaluation.”
Coinspeaker: “Your team of advisors includes not only crypto specialists, but a legal advisor. Do you plan to develop SPIN Protocol under the laws of some specific country?”
Spin Protocol Team: “As a Utility token, the token structure is under review to comply to the legal requirements of jurisdiction of the token-issuing entity.
To avoid any uncertainty of token generation events, the entity has been established in Singapore. And as the most of team members are Korean residents, SPIN Protocol services and fund-usage process will meet the compliances of Korean laws.
Our team has assigned the certified law firms in Singapore and Korea specialized in blockchain projects to clear any issues related to the ICO process and post-ICO activities.
To clear issues on custom and/or global commerce business, the commerce service providers on SPIN’s Application Layer will follow the regulations of each jurisdiction of the business.”
Coinspeaker: “At the moment you have 8 blockchain partners and 43 brand partners. What are your expectations on further collaborations? Maybe, some big names are already involved in negotiations?”
Spin Protocol Team: “We have made a partnership with “AdPic” (one of the biggest Influencer marketing company in Korea) and “Mediance” (Influencer marketing company specialized in Instagram promotion).
Influencer marketing companies actually have the will to enter commerce business to expand business and increase profits for their Influencers but product sourcing and actual operation come to obstacles for further expansion.
SPIN Protocol, however, provides a relevant infrastructures for commerce business such as product sourcing, payment system and logistics to let such marketing companies function on their own.
Hence, partnership with SPIN protocol will empower marketing companies to expand their own capabilities within our ecosystem. We are now in contact with various Influencer agency in Korea, the biggest Influencer agency in Southeast Asia and mega-Influencer with more than 15 million followers in China.
Current Suppliers of Womanstalk made a supply contract with SPIN Protocol and on business agreement with major logistics company in Korea to solve global logistic issue.”