INK-82

Proposal Type
Experiment
Project Lead
John Schenk
Date or Duration
Six (6) weeks for development and testing of the working prototype
Proposal Name
gmDM
Status
In Review
Submitted
Mar 21, 2024 10:41 PM
3/26/2024: This proposal has been updated and revised by John Schenk after receiving feedback from the community.
INK-82 - Original Proposal

Proposer

Submitted By:

John Schenk

Twitter:

@johnschenk

Discord:

schnk.eth

Team:

John Schenk, FinOps/Product Eyal Toledano, Dev/Product Grover Light, Design/Product

John is a finance, operations and business development executive with 20+ years experience working in Web3, crypto/blockchain, media/entertainment and technology. He is a repeat entrepreneur and Head of Media & Entertainment / Web3 at Escalon. John served as CFO/COO at Make Sense Labs, where he worked alongside Eyal and Grover on two blockchain-based messaging apps. John served as the first Doodles Community Council Treasurer. LinkedIn: https://www.linkedin.com/in/johnschenk/

Eyal is a tech entrepreneur with 15 years experience in leadership roles across B2C and B2B products. Full stack engineering and growth marketing skill set with a focus on market/product-fit and initializing value propositions with hyper growth potential. Founded the WizzyMinistry. Built and executed the Triwizzy Tournament. Experiments Lead on the original Doodles Council. Also built the platform you’re reading this on :] LinkedIn: https://www.linkedin.com/in/eyaltoledano/

Grover is a designer with 15+ years experience building digital products and brands in social, messaging, ecom, web3/crypto/blockchain, and now food & beverage CPG. Currently, he is the co-founder of the viral donut brand, glonuts, the healthy, but who cares alternative with retail distribution at Wholefoods, Erewhon, Equinox, and more. Grover has been a doodles holder since December 21’ LinkedIn: https://www.linkedin.com/in/groverlight/

Intro

Name of Experiment:

gmDM

Experiment Duration:

Six (6) weeks for development and testing of the working prototype

Experiment Type:

Digital Products (e.g. online courses, art, etc.)

Experiment One-Liner:

gmDM is a direct messaging application for NFT holders

Experiment Cost:

25000

Details

Experiment Description:

gmDM is a direct messaging application for NFT holders. Summary: Our team endeavors to solve a highly common yet challenging issue facing NFT holders everywhere - opening a line of communication between two verified NFT holders without sacrificing privacy or security. Problem scenario: @holder is a passionate Doodles holder who comes across a mid-rare grail Doodle that catches their eye. Unfortunately, this highly attractive NFT is listed at a price that is a bit out of reach - or perhaps not listed at all. They want to contact the holder to determine if the holder is willing to negotiate a transaction; however, there is no simple, safe and efficient way to communicate. And friction exists at every touchpoint:

Tracking down the verified holder is a lengthy effort and a hack job at best. Avoiding bad actors is a challenge because scammers pose as community members. Communicating in a timely and effective manner is largely nonexistent. Solution: gmDM is a direct messaging application for NFT holders. It’s a web application and API platform that allows you to search up an NFT by trait or item number, draft a message, and hit send.

Experiment Success:

Number of users in the network Number of threads per user Number of messages per thread Average chat length (session, total) User to access fee conversion rate Number of users paying access fees DM to sales conversion rate Number of sales transactions Average sales transaction value Generally, we want to have strong indicators that applying a transactional layer on top of the chat will yield volume we can take a % of. And the features we’re building will be aligned against those goals - chat activity, likelihood to transact, etc.

Experiment Product:

Messaging: gmDM allows any two NFTs to communicate free of charge; however, users can optionally tack on a small fee that charges anyone wanting to start a conversation. This “access fee” allows gmDM users to earn money while also serving as a deterrent to bad actors - scammers, spammers, etc. Users determine the fee they wish to charge, if any, and proceeds are split 50/50 between the user and gmDM. Swapping: Peer-to-peer swapping is a natural next step to NFT messaging; hence, gmDM will provide safe and secure P2P swapping of digital assets (i.e., tokens for NFTs, NFTs for NFTs) through its proprietary multi-chain platform. Partnership Model: The gmDM partnership model enables NFT projects to license our co-branded solution for a one-time upfront fee. Licensees receive API access to our tools, enabling them to integrate the gmDM experience into their own branded communities. Additionally, licensees will be entitled to a share of the proceeds from their users’ access fees. The 50% portion going to gmDM is split 50/50 with licensees, such that participating projects in aggregate receive 25% of total net access fees. Licensees will actively promote gmDM to their community of holders, further perpetuating the network effects and maximizing growth of the platform. Accordingly, gmDM aims to become the de facto multi-chain messaging solution for the entire NFT space. The gmDM licensing partner solution will be packaged and marketed with the following core value proposition: * Messaging layer that solves a major pain point for the community * Increased value for holding an NFT * New revenue stream for the project/licensee Messages will be securely stored off chain and accessible via wallet connect through our dedicated website http://gmdm.app, and through licensee-branded websites and experiences. Strategic Partner: Assuming the Experiment is deemed a success and the Inkubator provide follow-on funding under mutually agreed TBD terms, Doodles LLC will be a strategic partner and the Doodles NFT project will be our first customer - fully exempt from our partner licensing fee. Accordingly, gmDM will serve as the exclusive direct messaging tool for the Doodles community, and Doodles LLC will endorse and actively promote gmDM to its community and the NFT industry at large. Privacy, Spam and Bad Actors: All messages are fully secured through a combination of NFT and wallet address. Holder identities are unknown and never revealed. Like with most Web3 services, spam and phishing attempts can pose a risk; however, it is expected that such activities will be materially reduced by verified holder statuses and user access fees (which cannot be effectively scaled). Roadmap: Phase 1 (“Experiment”): Develop the working prototype, identify a small test group from within the Doodles OF community, test, and collect feedback. Phase 2: Refine the product, complete the MVP, develop revenue-tied features, and launch a “beta” product to the broader Doodles community. Test and further refine to achieve product-market fit (PMF). Phase 3: Develop the database and remaining technology, launch the v1.0 commercial product, market to users and target NFT project partners, provide integration and support. Revenue Model: * Licensing Fees - A one-time fee equivalent to 1 ETH per 100 ETH 7-day volume. For example, the licensing fee for a project with a 7-day volume of 430 ETH would be 4.3 ETH (or roughly $15k). Note: This pricing is subject to change. * Access Fees - A single payment fee determined by the user and charged once to begin a threaded conversation. gmDM keeps 25% net of revenue share to users and projects. Sales Transaction Fees - 0.5% of the total transaction value. * Revenue Share: Access fees will be shared as follows: Users - 50% Projects - 25% gmDM - 25% Note: Fees collected for NFTs associated with unlicensed projects will be split 50/50 between users and gmDM. NFT Projects cannot partake in revenue sharing unless they license the product. Proposal Budget: TBD Phase 1 (“Experiment” product): $25,000 * Development of the working prototype * Website/wallet connect with minimal design * Identify test group, including select members of the Doodles community * Test and capture feedback/results Phase 2 (“Beta” product): TBD * Completion of the minimum viable product (MVP) * Development of revenue-tied features/functionality * Completion of beta product * Launch public “beta” product to larger Doodles community Phase 3 (“Commercial” product): TBD * Development of the database * Marketing * Launch the commercial product * Pitch and secure partner NFT projects (i.e., licensees) * Integration and support

Financial Projections: See attached. Full model available upon request.

Product Distribution:

gmDM will be distributed through our licensing partnerships and referral program. Additionally, word of mouth will be quite strong as users understand the chat functionality and monetization opportunities.

Logistics

OG Holder Participation:

Our working prototype will be made available during the "Experiment" period to a test group of OG Doodles community members. They will have a first-look opportunity to test the product and provide feedback, contributing to the final product in a meaningful way.

Dependencies:

N/A. We run everything custom including our own API, web socket server and wallet-powered authentication - excluding the wallet connection library. No other outside dependencies.

Revenue:

We're projecting significant revenue from licensing fees, access fees, and sales transactions.

Self-Sustainability:

gmDM is projected to achieve break-even profitability within 7 months. We are projecting 8-digital gross revenue by Year 3.

Future Inkubation:

We are fully prepared to scale the experiment through partner network effects, user monetary incentives, marketing, and publicity. The core product will be completed and ready for refinements and completion of the MVP within 4-8 weeks from the end of the experiment period. Our goal is to secure follow-on funding on the heels of a successful experiment. This funding will support development of the public beta and launch the commercial product, taking gmDM through phases 2 and 3 and into self-sustaining profitability. The nature of this funding could involve full “inkubation”, which would entitle the Inkubator fund to a TBD share of future monthly revenue - potentially in perpetuity. Alternatively, it could encompass a seed investment (e.g., SAFE agreement) that would entitle the Inkubator fund to an equity interest in the company and participation in a future exit scenario.

Detailed Budget:

Development, design $23k Technology (software, hosting) $2k

Marketing

Marketing Plan:

Experiment: The Experiment phase will require little to no marketing. Accordingly, our goal will be to identify and secure OG community members who are willing and able to invest time into testing gmDM and providing meaningful feedback. We will design and share a simple process for capturing this feedback. Beta Period: We will work closely with the Doodles team to implement an opt-in strategy and referral plan that maximizes the number of OG Doodles holders willing to participate. Commercial Launch: Between successfully securing our funding from the Inkubator and working with Doodles LLC as our first customer and strategic partner, it is expected that the Doodles team and community council will help spread the word to the Doodles community and beyond. Further, we will leverage the network effects of partner NFT projects. We will present to licensing prospects the following core value proposition: * Messaging layer that solves a major pain point for the community * Increased value for holding an NFT * New revenue stream for the project/licensee

Additionally, we will lean toward a comprehensive marketing strategy that utilizes X /Twitter influencers, a referral plan, and paid marketing. We may also secure a mid-level growth strategist to help achieve our targets.

Two-Sided Marketplace Challenge

Users do not need to opt in to receive messages; messages are waiting for them, provided there’s demand to reach them. NFT owners will have an inbox that contains messages only they can access. The NFT owner doesn’t need to explicitly open the inbox; it’s already open and anyone can send a message to it.

Materials:

We will develop toward our v1.0 commercial product, which we expect to launch by no later than month 6. This will include our product design/assets and functionality, API tools, website, social profiles, and (potentially) a mobile web application.

Extra

Insurance:

Own insurance.

Third Party Insurance:

Extra Details:

Competitive Differentiation: Snag Solutions

Snag provides intra-community messaging. Alternatively, gmDM offers ecosystem wide messaging - and eventually cross chain messaging. Not the same product.

FAQ

Q: Why focus on NFT-to-NFT (N2N) communication, rather than wallet to wallet? A: NFT ownership is a gateway for communication, moving beyond impersonal wallet addresses. You are your NFTs, not your wallet address. NFTs act as the direct discovery tool, ensuring every user knows how to connect based on token IDs within collections. You don't need to find the person behind the 0x address or even the 0x address itself. You just point to the NFT you want to reach, and send a message.

Q: Do you need to join gmDM in order to participate? A: You do not need to join to receive messages; your messages are already waiting for you.

Q: Who can use the product? A: Anyone who belongs to a supported project can use gmDM. Supported projects do not need to license the technology; they simply need to be enabled by the gmDM team. Our plan is to support most known projects, and to accept nominations from holders of lesser-known communities.

Q: Why should an NFT project license gmDM? A: Licensing the product entitles the project to a new revenue stream and API access that can make gmDM accessible to their communities through their proprietary websites and experiences.

Q: Why does gmDM want NFT projects licensing its product? A: NFT projects are best positioned to promote gmDM to their communities, resulting in network effects that play directly into our growth strategy. Additionally, licensees provide a one-time upfront payment to gmDM which serves as an important revenue source for running the business.

Q: What is the purpose of user access fees, and how will this impact the experience? A: Users are not required to attach an “access fee” to their inboxes, but may do so if they wish. It is likely many users of gmDM will not attach a fee; however, those who may elect to do so in order to manage incoming solicitations, create alpha groups, or otherwise monetize their social influence.

Q: Which chains will gmDM support? A: Initial support will be for the Ethereum blockchain; however, our plan is to expand to Bitcoin, Solana and others. Timing yet to be determined.

Q: How will the gmDM service fee of 0.5% complete with the zero fees of X2Y2? A: At this time, the transaction fee is simply an idea. Transacting NFTs is a natural next step to negotiating a trade, so it’s possible users will pay a small fee in the context of convenience. That said, our goal is to gather more information through the experiment and beta period. We will take the product down the path of least resistance.

Q: How do you solve the “cold start”? A: gmDM will rely on interruption discovery through channels that allows the product to earn impressions where its target market lives - i.e. referrals and partnerships being a primary source early on.