JOYGaming - Our Tokens Could Become the Universal Currency for Online Gambling.

Zusammenfassung

JOYGaming is the first developer focusing on gaming platform based on blockchain technology. It aims to create a fair and transparent ecosystem between players, developers and the online casino operators. JOYGaming believes that the collaboration is mutually benefit to all.

At present, players are forced to trust the black box behind online casinos and games. The lack of trust from players is the biggest challenger for the gaming industry. Online casinos have to invest huge amount of money into brand building and advertising to attract players. JOYGaming’s innovative technologies based on the Ethereum platform help increasing the players confidence and the level of trust. Trust is the most valuable asset which attracts visitors and increase the numbers of games played. It has a positive impact on increasing revenues and reducing expenses.

JOYGaming has been operating its own regulated licensed online casino for years (https://playcosmo.com) and generated transactions with more than 500,000 US dollars a day. It has legitimate licenses in UK, Malta and Curacao. Before the actual launch of the ecosystem, JOYGaming already enjoys the massive support given by the contracts signed with the major casino gaming distribution operators, which gives JOYGaming access to over two hundred casino operators worldwide, including William Hill, Ladbrokes Coral, BetVictor and others famous online casinos. This could help our gaming developers to overcome the legal barriers and integrate to the backend of the entire operation quickly and cost effectively. JOYGaming has also developed ten famous in-house casino games of which four are played on BetVictor, one of the leading Asian online casinos that generates over 10 billion USD revenue a year.

The JOYGaming project team has extensive experience working for multi-billion dollar companies within the gaming and blockchain industry. The JOYGaming platform is being supported by gaming professionals, such as Mr. Keld Knudsen who has more than 30 years of experience with blue chip and multinational organizations. Moreover, Mr. Keld Knudsen has years of experience in online gaming and he joined Mr Green (which is a public listed online gaming operator on NASDAQ) as CFO during its early start-up phase.

1. Gaming Industry analysis

The online casino market currently stands at 50 billion USD annually. This is expected to grow to 100 billion USD by the year 2025. Moreover, the Sports betting could soon be legalized in the U.S. and this will add another 150 billion dollars to the entire market within the next 5 years. These billions of dollars in wagering transactions is only part of the story. Figures from casinos operating in black markets or offline casino transactions have not been included yet. JOYGaming is ready to explore the opportunities in this rapidly grown and lucrative market.

1.1 Existing Problems in the Gaming Industry

Transparency of Games and Casino Operators is low

At present, there is uncertainty for casino operators to have the requisite funds to pay out for winnings and they might even refuse to pay for legitimate players’ wins. Furthermore, there is no transparency to players on whether the game wagers are valid. Players tend to believe that sometimes wager can be manually controlled by casinos in their favor.

The blockchain technology behind the JoyGaming network will be welcomed by all players as it can provide a fair, trust worthy and transparent operation from the moment players log in to the moment players win their stakes. Besides, it will also ensure the longevity and sustainable development of the industry.

Slow Payout by Casino Operators

Payouts by casino operators usually take place within the traditional banking system that can take several days for it to arrive to the players’ bank accounts. The rule of the banking system is rigid which cannot accommodate to the liquidity needs of players.

Lack of Innovation and Interaction

Slot games are the main revenue generators for online casinos, however it has the least interaction between games and players which most portion of players are over 35 in ages. The new generation tend to be interested in more innovative and interactive games. Therefore, operators need to keep their games fresh and exciting continuously to stimulate players to adhere to the gaming platform.

Online Gaming Affecting Player’s Credit Scores

Over 95% of the online gaming transactions goes through the traditional banking systems and banks record gaming transactions as a risk on the credit score of an individual. As such, players’ credit scores are adversely affected.

Excessive Multiple Payment Processing Fees for Deposits

The service charges for depositing fund into an online casino are prohibitively expensive through traditional methods (e.g. credit cards, paypal, SMS) which are in the range of 5-10% of every transaction. This is because gaming is seen as a high-risk industry as players might potentially issue a chargeback if they lose. In addition, players typically deposit, then withdraw their winnings, and this occurs around ten times throughout the lifespan of the customer journey. This results in a significant accumulated payment processing cost that is absorbed by the operators which narrow down their gross margins deeply.

Extensive Costs and Time Frames for Game Developers

There are substantial hurdles that a developer must go through to create a casino game, and have it integrated into an online casino. Firstly, a random number generator server for fairness purpose which is licensed by the relevant gaming authorities has to be created. Thereafter, the game’s front end, backend, mathematical models, graphics and music have to be combined into a game. It is then sent to a certification lab in which the game will trial play for millions of times to ensure the return rate to player is fair enough.

Once the game is verified, the developer must integrate directly with the casino’s backend and obtain a developer’s gaming license before the game can be launched. It takes a considerable amount of time and upfront cost to develop a single game to a single casino. It generally takes six months to a year to obtain a license in one jurisdiction and six months to integrate with a casino after finalizing commercial discussions. Thus, A single game development will cost around $100,000 USD and six months of development work.

2. How Blockchain Benefits Gaming Industry?

2.1 Advantages of Blockchain for Gaming

More Confidence in Online Casinos

If players trust the games and casinos that they are engaging with, they will be more likely to wager larger amount of fund and increase playing time, which will drive revenue and profit for casinos. This renewed players’ confidence will also increase players’ satisfactions and reduce chargebacks for casinos.

Players Get Winnings Earlier

The players’ trust in the casinos will increase as they know their funds can be easily retrieved to their own pockets. They would then be more willing to deposit larger amount of money frequently.

Engaging a New Generation of Players and Developers

Operators will be able to reach of a wider players base to ensure that their revenues are consistently growing by offering a wider variety of games on their platforms. With the introduction of modern technologies and second screens, the casino operator’s image can be revamped as new in the eyes of the public.

Furthermore, if more developers create more games for casinos, casinos can control the cost more effectively as it will break the monopolistic control of gaming development firms and allows for more innovation and game creativity to flourish within the gaming industry.

Not Affecting Player’s Credit Scores

No Players want their credit scores to be affected by participating in online entertainment. JoyGaming could solve this problem when transactions occur outside of the traditional banking system.

Lower Transaction Costs

Players initially deposit fund via a traditional method of payment. Afterwards, when players want to withdraw, it is then converted into a cryptocurrency which can be converted back to fiat easily through an exchange or kept in their wallets. This reduces unnecessary transaction costs the next time they deposit into an operator, and operators will achieve significantly higher margins.

Driving Down Costs and Time Span for Developers

More developers will be able to work on developing innovative solutions for the gaming industry and increase their margins. This would democratize the game development process and eliminates game development from being a privilege that is only for a few large well-capitalized development firms. This disruption is like the app store model headlined by Google Play Store and Apple’s App store.

Developers can make use of JOYGaming’s multi gaming licenses (United Kingdom, Malta and Curacao) , casino integrations, and mathematical models to significantly lower the cost and shorten the length of time to become integrated.

2.2 The Properties of Smart Contracts

Our Platform will use the Ethereum network as a blockchain based ecosystem. The Ethereum network is well-established, accepted and used by the community with a full Turing-language capability. While there are some latency issues, a middle-ground decentralized solution is proposed that can significantly reduce this latency.

The use of an Autonomous Agent (i.e. a Smart Contract) builds trust in the system because any conflict of interest between the player and the Platform is managed and audited in a decentralized manner. No third party needs to be involved since all the transactions are done via a Smart Contract which guarantees everyone has access always and can verify the game’s security, fairness and transparency. There would no longer be any need for a player to trust in the black box mechanics of a game or a casino’s financial viability.

2.3 Nature of Tokens

JOYGaming tokens will be available for purchase on the Ethereum network as an ERC20 token. In the most basic sense, JOYGaming tokens (JOY) can be used by developers to access services and an algorithmic stable coin (USDJOY, GBPJOY, EUDJOY) by players to wager on games on the Joy Gaming network.

For casinos and game developers

The tokens can be used to secure payment for running games and for receiving payment from players. Casinos can guarantee real-time affiliate payments to all developers, thereby affording new casino operators the same highly lucrative affiliate deals that are currently available only to the largest brands. They also have access to a wider pool of players interested in cryptocurrencies and a wider range of games to offer on their gaming platform.

For the smaller game developers that rely on bigger casinos to “back” the games, tokens can be used to receive commissions from the casinos that provide the reputation and the working capital to offer the game.

All legitimate parties are afforded the security of knowing the immutable smart contracts, coupled with the tokens, eliminates fraud on the network.

Overall, tokens will have a value based on what users are willing to pay to use the services on the JOYGaming network.

3. Introduction of Stable Coin for Transactions Within JOYGaming

This section addresses price stability of a coin for the gaming industry based on three things:
a) the anonymous aspect of a token (meaning that a public address should not match to a user if possible),
b) decentralization with a self-balancing, self-correcting mechanism,
c) effective use of transaction fees to stabilize the price peg. Bringing all of these elements together are important to create and maintain an effective price-stable universal coin/token for the gaming industry.

WHY

Price stability, transparency and value creation as well as maintaining value are the holy grails of cryptocurrencies. These are specifically needed, if a single cryptocurrency may become universally adopted. There are numbers of white papers which address overall price stability for cryptos, yet the notion behind this short-disposition is to describe an environment for a stable coin/token ideally for an investor group in the gambling industry.
What is necessary for a token to achieve universal adoption are based on the understanding that it must be at least as good as those currencies in which they are competing. A currency, either digital or fiat, to reach a level of stability must be seen as a:
a) medium of exchange
b) unit of account
c) store of value

HOW

Gamers do not want to speculate on currency volatility but focus on the probabilities of the game. Therefore, a cryptocurrency for the gaming industry must:
a) be a store of value only;
b) derive from a censorship resistant ledger;
c) escape local banking institution: supporting anonymity;
d) avoid currency control; and
e) avoid the impact on the store of value by collapsing economy.

The way to achieve these is to issue a coin that is based on a recognizable peg, whilst avoiding the inflexibility and difficulty in maintaining the peg. To maintain an effective peg is to ask:
a) how much volatility can the peg maintain? (resisting downside selling pressures)
b) how expensive to maintain the peg?
c) how easy to analyze the bank of behavior by which the token/currency can recover?
d) how transparent the peg is to traders to observe the true market conditions.

It is axiomatic that a transparent peg is more robust against manipulation of changes in sentiment. A stable universal currency, which can be easily adopted for the gaming industry must maximize real-world stability by; withstanding a great deal of volatility, not extremely costly to maintain, easy to analyze the stability parameters and lastly, transparent.

There is a growing amount of research on the taxonomy of a stable currency, they are grouped into 3 areas: fiat collateralized coin, crypto-collateralized coin and non-collateralized. Each of the groups has its own pros and cons, whether it is effective for a stable crypto for the gaming industry, depends on the trade-off the investors are willing to accept, and the flexibility of their risk profiles.

What is needed for a stable digital currency?

a)price stability;
b)scalability;
c)privacy, and;
d)decentralized, avoiding unchecked monetary policy.

JOYGaming will look into the discussion with a real-world example on how to establish such a digital currency for the gaming industry.

The ideal way to start is to look for solutions already provided, such as Basecoin. Basecoin has expanded the Seigniorage shares model, which is supported by the Quantity theory of money. In principle, the model seeks to use crypto projects to replicate the Federal Reserve Board of the US in a decentralized algorithmic way.

A great place to start, but challenge with a Seigniorage shares model is the death spiral. The current Basecoin model carries the risk of a death spiral if there is a rapid decrease in demand in the coin, which would be accompanied by issuance of bonds; to take coins out of the system to stabilize the price, bonds will be continuously issued eliciting a death spiral and lack of confidence in the coin.

The basic element of any currency is the Schelling point; if enough people have confidence in, the system will survive then a virtuous cycle is created that ensures survival of the system. A stable coin must be seen as a free-floating asset tracking an underlying peg, via a redeemable collateral, market incentives and future expectations. It is well to note, that economies which develop around a stable universal coin will cease to be incumbent upon the peg to derive value.

JOYGaming Solution

The JOYGaming solution is based on the Seigniorage Shares model, suggested by Basecoin with a specific twist to guard against the risk of a death spiral; exploring a simple way to counteract the risk.

The current Basecoin model is based on the workings of coin demand:

- A rise in demand (as the network grows) will trigger an increase in the price of the coin, to combat the increase in price so the coin is remarkably pegged to the underlying fiat currency, shares are issued, thereby increasing the supply of coins and bringing the price back in line with the pegged fiat.
- Alternatively, if there is a drop-in demand (a shrinkage of the network) then the price of the coin drops and bonds will be issued to remove the coins at some future date, thereby decreasing the supply of coins and reestablishing the peg.
- If the demand for the coin increases then the corresponding increasing in coinage supply will pay out first bond holders, once all the bonds are paid out, then shareholders will have an opportunity to access the newly minted coins.

Please note that the bonds are binary options with an indefinite payout date; Basecoin sets the carried payout liability at 5 years.

The JOYGaming solution will tweak this model:

-Issue bonds without an end date,
- An open auction of coins, if prices rise above a certain price threshold, then the market is infused with more coins, thereby stabilizing the coin against the fiat.
- Ensuring that token holders maintain their holdings by establishing a dividend pool of 30% of transaction fees, which will be distributed pro-rata, as part of the holding return*1
- The transaction fee can also be used as a floor to the coin if the network shrinks significantly triggering a price change vis-a-vis the peg.
- For the bonds to combat a rapid decrease in demand of the coin, there will be a cap on the number of bonds issued, the first milestone will be to use any outstanding transaction fees to purchase the tokens.
- The bonds will carry no liability as the open auction will serve the bond holders first, once a price level has been triggered, thereby be redeemed for more coins if the price moves above a certain price point vis-a-vis the pegged fiat. The open auction will also ensure liquidity to the bond and coin holders.

Under-deployed transaction fees will be used to prop the stability of the token, if there is no need to intervene, the unused transaction fees will be placed in a fund to be used first before issuance of bonds, again to place another hurdle to guard against a death spiral. It is important to highlight that the lighter the touch when correcting the token vis the peg, will result in a more stable coin. In addition, the gaming industry is one industry where the probably of the network growing is much more probable than shrinkage of the network.


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*1 Dividends from the transaction fees pro-rata based on:
30% for holders of the coins 30% for dividends for bonds and for buyers of last resort.
30% for organisation 5% for nodes 
5% for referral funds.

4. Viability of JOYGaming development

4.1 Fixing Bad Reputation: Improvement on Transparency and Efficiency

The JOYGaming network relies on decentralized smart contracts to guarantee and record all that happens on the blockchain. Through the blockchain, JOYGaming will be able to audit everything that happens on the Joy Gaming platform. Players will be able to view the outcomes and the rewards of the network in real time. Players could always control their own JOYGaming wallet (and withdrawals are simpler and conducted more quickly), unlike traditional casinos where deposits are made to the casino account.

JOYGAMING implies smart contracts to coordinate the transactions between players, developers and casino operators, and improves upon the transparency and game’s fairness within the JOYGaming system . Demand for API services to develop games on the JOYGaming platform will drive the utility of JOYGaming Tokens (JOY).

The JOYGaming network provides a frictionless rewards system, guaranteed pay-outs, attraction of otherwise unobtainable affiliates, eliminates potential fraud and reduces payment processing fees. Since payments are outside of the banking system, payouts are much quicker and player’s credit scores are not affected.

4.2 Create a Gambling Ecosystem: The JoyGaming Platform

4.2.1 Game operations

Ecosystem benefits and structure

By operating on the blockchain, users can easily identify where their money is going and whether the results are fairly generated. User experience is our top priority and we will offer a wide variety of games, strong security and reliability.

In addition to user benefits, developers benefit from the large liquidity pool and additional reputation provided by operating on the Joy Gaming network. Developers will be able to easily “prove” the games that the user plays because it is transparent and on the blockchain. The developer will connect to casinos and collect commissions from the games being played, while knowing they have a robust audit trail. Developers are crucial in the gaming industry. We at Joy Gaming understand developers will work to provide the best experience in terms of fair reward, full support on the marketing process and a greater capacity of players.

To ensure the success of games, Joy Gaming provides support to the developers within the Joy Gaming ecosystem.

Support to developers is provided on:

* Client acquisition by providing marketing and direct access our client
* base Compliance from a legal and licensing perspective
* Blockchain integration
Developers only need to focus on the game development, JOYGaming will do the rest.

4.2.2 JoyGaming Platform for Players, Developers and Operators

JOYGaming’s platform for developers is live at (https://JOYGamingplatform.io). Currently, it has a demo blockchain based slot game for developers, players, operators to test drive. Developers can now use our API services and mathematical models to start the development of games to place live on our JOYGaming Casino network.


https://www.youtube.com/watch?v=PZJUvS8qJzo&t=18s

JOYGaming’s solution is blockchain-based, and it allows developers to create games that are run on its backend through a smart contract, rather than directly on the blockchain. As all the results are recorded within the blockchain, there is significantly lower fraud. Thus, players can verify that developers are running games exactly as described on the blockchain. Further, game developers and software houses can connect and integrate with liquidity providers, such as casinos, to provide access directly to their games. Both the casinos and the developers benefit from the additional revenue and increased game innovation. The lack of reputation of any specific site can be offset by the fact that rules and underlying infrastructure of the games are recorded on the blockchain (in addition to the approval system before games are allowed to go live on the Joy Gaming network).

4.3 Tokenomics

4.3.1 The JOYGaming Token (JOY)

Joy Gaming Coin (JOY) is used for utility transactions between developers, casino operators and the Joy Gaming platform. When a developer uses the Joy Gaming API to develop blockchain-based casino games, developers will be using JOY to access these services. Joy Gaming anticipates having hundreds of developers working on the Joy Gaming platform to become the app store for wagering games for casino operators.

4.3.2 The Joy Stable Coin (USDJOY, GBPJOY, EUDJOY)

Joy Stable Coin (USDJOY, GBPJOY, EUDJOY) is an algorithmic stable crypto currency that is pegged to regional fiat currencies (pounds, euros etc) and will be used for wagering purposes between the players and operators while playing the game. Players do not wish for their wagering currency to fluctuate substantially during game play.

4.4 Cases studies

The software development company

Avent is a software development company that wants to create an online gambling game. They have an amazing idea that would change the industry. However, casinos are not willing to hire Avent because the market is not tested yet. Avent could run their own private game online, but this comes with multiple issues. First, Avent doesn’t have the capital to offer their own private high stakes games. Second, users will hesitate to trust an unknown company. In addition, users are also not comfortable with the idea of handing over their credit card information to a 3rd party who will have access to all the funds. This means that Avent would find it very difficult to make a profit on their innovative gambling games.

Joy Gaming solves this in two ways. First, if Avent were to run on the Joy Gaming network, they would get exposure to numerous of liquidity providers (i.e. casinos. Second, the transparent and immutable nature of smart contracts and a trusted RNG generation algorithm would assure potential users that the games they are playing on Avent are fair. Finally, because all the transactions are conducted directly from the user’s wallet, they have access to all the funds anytime and would be more willing to try out Avent. Avent is now able to reach more customers than before and can focus more time on developing additional innovative games.

The user

Users are tired of having to constantly browse between many different casinos and games room, which requires them to trust an increasing number of third parties. Joy Gaming ensures all the transactions are visible, rules are immutable within the blockchain, and it verifies its developers. Therefore, users can play on Joy Gaming’s network and be assured that the games are fully verified and secure. Because no funds leave the user’s wallet until a game is initiated, the user is assured that their funds are safe and secure.

The casinos

Casinos are always looking for new ways to attract users and improve the quality of their games. Casinos also have the expertise, capital and liquidity to run games independently. Unfortunately, casinos cannot simply add random games because newly developed games are often not accepted by the mass market. The Joy Gaming network brings a solution.

Developers that create new, exciting and experimental games can enter contracts directly with casinos. In this case, casinos are the liquidity provider in the smart contract, and each time a user plays the game, the casino would pay a commission to the developer. It’s a win- win scenario.

5. Implementation of JOYGaming

Joy Gaming has been operating an online casino https://playcosmo.com which has access to gaming licenses in UK, Malta and Curacao for the past 4 years. Also, it holds a B2B UK gaming license, and has a B2B pending license for Malta. It has over 4,000 live games on its website.

Also, JOYGaming has signed with casino distribution operators which gives Joy Gaming access to over 200 casino operators including William Hill, BetVictor etc. This will give developers quick integration to the backend of operators and save money using our licenses. JOYGaming also have developed ten in-house casino games of which four are distributed on BetVictor, one of the leading Asian online casinos (games like Icy Cash Splash, Angel Girl Devil Girl, Outlaw Women of Spin Town and C'est Cheese).

Angel Girl Devil Girl https://www.youtube.com/watch?v=pZEtQO9kU6w (for game play)

Icy Cash Splash

C’est Cheese https://www.youtube.com/watch?v=g0v_3z9n20M (for game play)

Outlaw Women of Spin Town https://www.youtube.com/watch?v=TzFUWGrUhVA (for game play)

6. JOYGaming Technology Analysis

6.1 Technology Stack Data Structure

Our technology stack is primarily composed of three main components: the blockchain layer, game applications (back/front end) and the Random Number Generator (RNG). The back/front end of the games will be running on databases, however all parts that could lead to any form of dispute between the player and the platform will be decentralized and audited over the blockchain using smart contracts.

The above figure demonstrates the communication between approved game applications and the Joy Gaming Random Number Generator.

The Blockchain Layer

The blockchain layer has three functions: token management, game outcome management, and providing auditability of the Random Number Generator.

The Token Management

In a traditional online casino, clients send money to the casino to play its games. This creates the opportunity for potential fraud. Joy Gaming solves this problem by using blockchain technology. All player funds will be stored in each player’s JOYGaming wallet. When a player places a bet, the money will be sent to a smart contract which will manage the outcome of the bet in a decentralized manner. Using blockchain means that the casino (i.e. the Joy Gaming Platform) has no control over the player’s money at any time.

To summarize:
* The player owns his/her money all the times.
* The player is the only person who has management rights over their funds.
* Wagers will be managed in a decentralized manner using smart contracts.

The Game Outcome Management

For each player’s wager, a smart contract will be used. The smart contract will manage the information provided by all parts of the system (game code, RNG, player input). The smart contract will then verify the outcome of the play and automatically allocate funds to the right person according to the established contract rules.

For example, Player A initiates a bet on the roulette.
1. The fund will be automatically sent to the roulette contract
2. The random number generated for this turn of the roulette will be copied and recorded within a smart contract. (Note: everything critical, both RNG and game history, to the gameplay that occurs will be recorded on a smart contract).
3. Utilizing the random number generated, the game code will send the outcome to the smart contract
4. The winner will then be automatically credited. If the player loses, then the money is divided between the developer and the platform management. This split is negotiated during the development phase and applied automatically when a player loses.
5. Finally, the player can decide to restart the process and continue play, or end their gaming session

Demo Code for initially registering a game on the network

The code below demonstrates registration of a game on the Joy Gaming network. The registration is done fully through the Ethereum network, so participants can easily verify that the contract has been officially approved by the network. Through this demo, we see that registration can be called through the GameRegistry() function whereby the game will be registered on the Joy Gaming network. (Note: The amount to be credited to the developer can also be specified, through the setPlatformShare(uint256 newShare)).

    contract GameRegistry is Ownable {
        using SafeMath for uint256;
        address public tokenAddress;
        address[] public gameList;
        uint256 public decimals = 5;
        uint256 public platformShare = 5 * 10**(decimals.sub(2));
        address public controller;
        mapping(address => bool) public gameRegistered;
        event ControllerTransfer(address originalController, address currentController);
        event PlatformShareUpdate(uint256 originalShare, uint256 newShare);
        event GameRegistered(address game);
        event GameDelisted(address game);


        function GameRegistry(address _tokenAddress) {
            owner = msg.sender;
            controller = owner;
            tokenAddress = _tokenAddress;
        }

        function setController(address newController) public onlyOwner {
            require(newController != address(0) && newController != controller);
            ControllerTransfer(controller, newController);
            controller = newController;
        }

        function setPlatformShare(uint256 newShare) public onlyOwner {
            require(newShare < 10**decimals);
            PlatformShareUpdate(platformShare, newShare);
            platformShare = newShare;
        }

        function createGame(string _name, uint256 _payoutRate) public {
            address newGame = new Game(_name, msg.sender, this, tokenAddress, payoutRate);
            require(!gameRegistered[newGame]);
            gameList.push(newGame);
            gameRegistered[newGame] = true;
            GameRegistered(newGame);
        }

        function delistGame(address game) public onlyOwner {
            require(gameRegistered[game]);
            gameRegistered[game] = false;
            GameDelisted(game);
        }

        function registerGame(address game) public onlyOwner {
            Game g = Game(game);
            require(!gameRegistered[game]);
            gameRegistered[game] = true;
            gameList.push(game);
            GameRegistered(game);
        }

        function getGameRegistered(address game) public constant returns (bool registered) {
            return gameRegistered[game];
        }
    }
    

The Random Number Generator (RNG) Auditability

A key part of the gaming industry is the verifiability of a RNG. In the traditional sense, random number generators are usually administered by the company hosting the games. However, in our case, this will be decentralized and demonstrably fair because every game will run on a custom-built algorithm that relies on the RNG linked to the Ethereum network smart contract. This is described in more detail in the Wrapping Phase and pay-out process.

Game Application (Back & Front-End Management)

Game application codes will be hosted on our servers or hosted through the IPFS/Sia/Storj network. Game outcome will then be communicated to the smart contract. Thereafter, the game servers will provide the state of the game to Blockchain using JSON RPC via IPC. The user experience won’t be impacted by the usage/availability of the blockchain because all game outcomes will be available immediately. This feature ensures that user experience is close to traditional gameplay, while ensuring that the process is also fully transparent and decentralized. Every game code will be accessible on the blockchain along with full auditability on the random number generated.

Randomness Based on Blockchain Information

The key is finding a decentralized RNG generation technique that our games can utilize based on the blockchain. The current solution utilizes the usage of block generation information (such as timestamp, nonce, hash of the current block, and so on) to generate random numbers. Although those numbers are generated by miners, it is highly unlikely a miner could successfully change the outcome of the game on the Ethereum Public Network, because the miner would have to possess enough mining power to mine the block several times within the public environment competition (around 14 seconds), as follows:
1. The miner is competing in the mining process of the Public Ethereum Blockchain environment
2. The miner finds the nounce and is now able to get the reward
3. The miner checks the nounce and Block information generated against the winning requirement of the game
If it matches, the miner populates the result
4. Otherwise, the miner restarts the mining process to find another nonce that fits, forgetting about the previous mining reward.

Even though this method would be highly reliable, we rejected it because we were seeking a model that did not allow any room for potential manipulation.

RANDAO (a decentralized autonomous organization which aims to generate fully decentralized random numbers) is a very interesting possibility, but it is not mature enough to be implemented at this time. Joy Gaming supports the development of fully decentralized random numbers, and we will invest time studying RANDAO because, if fully mature and reliable, it is wholly aligned with our development plan.

Generating decentralized RNG numbers - Agile Approach

The random generator must solve the following challenges:
* Time and delays from the blockchain ecosystem, such as mining block time
* Decentralization and fully auditability
* Licensing and legally compliant

The proposed solution:
The randomness of numbers will be introduced through a congruential generator algorithm that generates pseudo random sequences of numbers, which will change by adding input of data from the outside world (e.g. player movements over the platform, Forex and cryptocurrency exchange data, etc.). These datasets are used because they have both unexpected behaviour and are always available. This solution is compliant with licensing requirements because it can provide all the needed random numbers in a short amount of time, without impacting user experience. In order to strengthen our RNG model, we will initiate a double verification using the Blockchain technology by mining each number over a transaction. It will then be impossible for Joy Gaming to manipulate the numbers in any way.

JOYGaming technology:
* Blockchain-based back-end and development stack.
* Auditability and transparency over gaming codes - all contracts are accessible by players all the times.
* Smart Contract implemented and connected to the game back-end through APIs.
* Security provided by the Ethereum Public Network.
* A game registry system connecting game developers to liquidity providers (casinos).
* Random number generation systems that allow games to be publicly verifiable and easily accessed by game developers.

6.2 Obstacles to the blockchain adoption

User experience is crucial when it comes to working on an online gambling initiative. Joy Gaming has worked hard to find the right balance between the speed of the gaming experience and the decentralization that comes with use of a blockchain for the online gambling industry.

Possible issues that Ethereum faces in its current state:

The Ethereum Blockchain is not an optimal system to process data quickly because the Proof of Work mining process happens every 14 seconds. Furthermore, Ethereum is not made to store massive amounts of data, given that the blockchain is copied on every participating node of the network. Therefore, a fully decentralized system at every point - from the RNG to the game itself - would not be the best option because there would be a significant time delay and players do not want to wait minutes to get the play results. Further, smart contracts managing large amounts of data and processing non-linear logic are expensive.

GAS price

The Ethereum introduced GAS price mainly to avoid “DDoS like attacks”, where a rogue person could create a large number of contracts to impact the efficiency of the public network itself. This way, GAS frequently changes its cost with the aim of an accurate usage of smart contract demand.

The Joy Gaming platform is a realistic balance between speed and decentralization in to provide the optimal player experience. Every game populated on the platform will comply with the following requirements of decentralization:
* The speed of the user experience will not be impacted - i.e. the game outcome needs to be available within a few seconds.
* No third party, developers, or the platform have rights over the tokens or the money spent in the games.
* According to the game result, pay-out will then be automatically processed to the winners or the actors involved in its development.

Although every game will be offered by different developers, there will be a game acceptance process (see section 6.5) where the Joy Gaming team will ensure the Developers comply with our speed and decentralization requirements. No game will be populated on the platform if it does not comply with those requirements. We may include an additional player KYC process, whereby only Joy Gaming verified players are permitted to use the platform so that we ensure a higher level of fair play and legal compliance.

Examples and scenarios of Blockchain integration 

As explained earlier, the technical features of all games need to match two requirements: minimize the delays caused by using of Blockchain and utilize its decentralization.

The following overall Game Architecture matches the Joy Gaming Platform requirements in terms of security, decentralization and speed. There are four main components:
* The Blockchain - the smart contract controls the pay-out according to the game outcome.
* The GS (Game server) - represents the databases where the game runs.
* The WS (Wallet server) - the Platform actor’s wallet will be updated according to final play outcome

The Process is divided into several phases:

The Loading Phase

We aim to avoid the verification transaction time on every bet during the loading phase because that will minimize the delays caused by the blockchain and will considerably impact the speed of the user experience.

To meet this requirement, the user will be asked to send money to the selected game smart contract while the game is loading and configuring.

This process requires fifteen seconds to load the game and set up the blockchain smart contract. This process is allowed if, and only if, the user has been checked and verified through the KYC process. It will be impossible for non-verified players to send money to the smart contract and an automatic error message will guide him to go through the KYC Process (more details in section 15).

Game initiation process

The token amount moved into the smart contract will be populated onto the WS (Wallet Server) as the initial client’s wallet value. The GS (Game Server) can be seen as a cache- like system, where the value of the platform actor’s (developer, platform, client) money will increase or decrease depending on the gameplay outcome.

Each client’s bet will be communicated to the GS (Game server) to determine outcomes.
1. WS sets up the temporary wallets - the amount of the client’s wallet will be the one invested during the loading phase. A double check is performed onto the smart contract to make sure the initial amount assigned to the client’s wallet is the one invested to the client during the loading phase.
2. The user places a bet (for example, 5 JOYGaming (JOY) tokens are placed on RED in a roulette game).
3. The bet will be communicated to the GS and processed using the RNG (that is audited within the Blockchain). Depending on the game’s outcome, the WS’s wallets (Client, Platform and Developer) will be updated accordingly.
4. His process will be repeated as long as the user has funds and does not wish to stop playing.

Demo smart contract for running a game on the network

    function Game(string _name, address _owner, address _registryAddress, address _ tokenAddress, uint256 _payoutRate) {
            name = _name;
            owner = _owner;
            registryAddress = _registryAddress;
            registry = GameRegistry(registryAddress);
            tokenAddress = _tokenAddress;
            token = ERC20(tokenAddress);
            payoutRate = _payoutRate;
            isActive = true;
            decimals = registry.decimals();
        }
        function activate() public onlyOwner {
            isActive = true;
            GameActivated();
        }

        function deactivate() public onlyOwner {
            isActive = false;
            GameDeactivated();
        }

        function ownerDeposit(uint256 amount) public onlyOwner {
            require(amount > 0);
            require(token.transferFrom(owner, this, amount));
            ownerAvailableDeposit.add(amount);
        }

        function ownerWithdraw(uint256 amount) public onlyOwner {
            require(amount > 0 && amount <= ownerAvailableDeposit);
            ownerAvailableDeposit.sub(amount);
            require(token.transfer(owner, amount));
        }

        function playerJoin(uint256 initialDeposit) public whenActive {
            require(!playerInGame[msg.sender]);
            uint256 potentialPayout = getPayout(initialDeposit);
            require(potentialPayout.sub(initialDeposit) <= ownerAvailableDeposit);
            ownerAvailableDeposit = ownerAvailableDeposit.sub(potentialPayou sub(initialDeposit ));
            playerInGame[msg.sender] = true;

            if (initialDeposit > 0){
                playerCurrentGameDeposits[msg.sender] = initialDeposit;
                require(token.transferFrom(msg.sender, this, initialDeposit));
            }
            PlayerJoined(msg.sender);
        }

        function announceResult(address player, uint result) public onlyController {
            require(playerInGame[player]);
            require(result <= uint(GameResult.draw));
            playerInGame[player] = false;
            GameResult gameResult = GameResult(result);
            if (gameResult == GameResult.win) {
                require(resolvePlayerWin(player));
            } else if (gameResult == GameResult.loss) {
                require(resolvePlayerLoss(player));
            } else {
                require(resolveDraw(player));
            }
            GameResultAnnounced(player, result);
        }

        function resolvePlayerWin(address player) private returns (bool success) {
            uint256 payout = getPayout(playerCurrentGameDeposits[player]);
            playerCurrentGameDeposits[player] = 0;
            if (payout > 0)
                playerDeposits[player] = playerDeposits[player].add(payout);
            return true;
        }

        function resolvePlayerLoss(address player) private returns (bool success) {
            uint256 playerDeposit = playerCurrentGameDeposits[player];
            playerCurrentGameDeposits[player] = 0;
            uint256 payout = getPayout(playerDeposit);
            uint256 platformShare = playerDeposit.mul(registry.platformShare()).div(10**registry.decimals());
            require(platformShare < playerDeposit);
            if (platformShare > 0)
                platformDeposit = platformDeposit.add(platformShare);
            uint256 profit = playerDeposit.sub(platformShare);
            ownerAvailableDeposit = ownerAvailableDeposit.add(payout.sub(playerDeposit)).add(profit);
            return true;
        }

        function resolveDraw(address player) private returns (bool success) {
            uint256 playerDeposit = playerCurrentGameDeposits[player];
            playerCurrentGameDeposits[player] = 0;
            uint256 payout = getPayout(playerDeposit);
            if (playerDeposit > 0)
                playerDeposits[player] = playerDeposits[player].add(playerDeposit);
            ownerAvailableDeposit = ownerAvailableDeposit.add(payout.sub(playerDeposit));
            return true;
        }

        function playerWithdraw(uint256 amount) public {
            require(amount > 0 && amount <= playerDeposits[msg.sender]);
            playerDeposits[msg.sender] = playerDeposits[msg.sender].sub(amount);
            require(token.transfer(msg.sender, amount));
        }

        function platformWithdraw(uint256 amount) public {
            require(msg.sender == registry.owner());
            require(amount > 0 && amount <= platformDeposit);
            platformDeposit = platformDeposit.sub(amount);
            require(token.transfer(msg.sender, amount));
        }

        function getPayout(uint256 deposit) private constant returns (uint256 payout) {
            return deposit.mul(payoutRate).div(10**decimals);
        }
    }
    

Wrapping Phase and Pay-out Process

The user can stop the game session and start the wrapping phase at any time using a straightforward process facilitated by the friendly game front-end. The wrapping process consists of:
1. The user’s stop request will be populated onto the GS and WS.
2. The GS will create a history file of the session, the file will then be hashed.
3. The last updated amount of the WS wallets along with the hash will be sent to the smart contract.
4. According to the information sent, the smart contract will change its state and process the pay-out on the blockchain.

Game Acceptance Process

We believe that our approach will attract a number of developers and game propositions.
In order to make the game acceptance process efficient and relevant to our platform, all new game propositions will be processed as follows:
1. Auditing the code - our experts will make sure everything matches our security and legal requirements.
2. Testing the game based on various metrics - time, security, costs, blockchain integration, user experience, etc. If the results from Steps I and II are successful, then the proposed game will go through to the integration process.
3. Smart Contract development.
4. Test and security audit of the developed Smart Contract.
5. Game Launch over the platform.

Once the game is populated within the Joy Gaming network, everything will integrate from within the system. If the developer requires additional liquidity, he/she will easily be able to access the pool of casinos that are willing to participate in offering the games. If there are other technical issues, our team will support the developer to find a prompt resolution.

Sample payout smart contract

  uint256 playerDeposit = playerDeposits[player];
      playerDeposits[player] = 0;
      uint256 payout = getPayout(playerDeposit);
      uint256 platformShare = playerDeposit.mul(registry.platformShare()).div(10**registry.decimals());
      require(platformShare < playerDeposit);
      if (platformShare > 0)
          require(token.transfer(registry.owner(), platformShare));
      uint256 profit = playerDeposit.sub(platformShare);
      ownerAvailableDeposit = ownerAvailableDeposit.add(payout.sub(playerDeposit )).add(profit );
      return true;
  

Within his contract, the developer can elect to receive a share of the profits made by running the game. This is specified in the platform-share variable. After each game run by the casino, the developer will receive a small portion of the revenues. All of this is directly encoded within the smart contract so there is no wait between the game being played and they payout.

6.4 Other technologies

While sample code is included in the whitepaper to demonstrate the functionality and implementation of JOYGaming (JOY) tokens, our code repository can be accessed through our github link below: https://github.com/JoyPlatform/joy-contracts. The code will be commented to give full visibility and understanding of our approach from a development perspective. If you have any questions, please contact our team over the communication channel at any time.

Blockchain Technology beyond Ethereum

Ethereum is not market ready for gaming technology because there are still issues with speed and scalability that need to be solved. In this section, we will present two additional technologies that could add value to our initiative and may be integrated into our development plan.

IOTA: Decentralization using DAGs (Directed acyclic graphs)

IOTA is a new innovative decentralized approach. It is not a blockchain ecosystem, rather it introduces the concept of tangle. A tangle is literally a blockchain without blocks and it makes the consensus process an intrinsic part of the system.

This innovation introduces game changing features for the Gambling industry:

The negative for the gambling business would be the transaction validation time. However, the transaction time is directly impacted by the number of active participants (since you must participate in two other validations in order to make your own transaction validated). Thus, a larger number of users will decrease the transaction time (which is currently between 2-3 minutes). Notably, the IOTA network is still on a beta version and the free transaction feature will likely attract large amounts of users and thereby resolve the transaction validation time. The potential of this ecosystem has no limit, and we are following its development and hoping to test game integration in the near future. [1]

Decentralization of storage and hosting

Decentralized storage is an open market since the blockchain technology is not made to store data. Sia [2], IPFS [2], and Storj [3] are the main competitors for this market. The general idea is to allow users to store data or rent available storage capabilities managed over a decentralized environment.

For example, many people in the world possess unused storage capabilities. The competitors mentioned above propose to store data with a high level of security across a network of participants that are looking to be rewarded for their hard drive rental. If a person wants to store a 1 gigabit document, then the document will be split into many pieces and each piece will be encrypted. Then, those encrypted pieces are copied and spread over each participant’s hard drive.

The power of this model is that the only way to access the file is to possess the private key of the document holder, since it is impossible to find all the encrypted pieces of all the participants in the network. It provides strong security for a very attractive price and is just a little more expensive than common centralized systems. This technology allows storage of very sensitive data over any user’s computer because everything managed between the renter and user is via a cryptocurrency payment.

As presented in section 11.3, we chose to store a hash of a client’s game session over the blockchain environment to make available a full traceability of the user’s journey. Using the decentralized storage in our model would provide security of the history and a strong reliability because the system no longer has a central point of failure.

Joy Gaming is looking into using this solution for potential integration in its further development.

Affiliate engagement

New casino operators often struggle with player liquidity. Also, large affiliates do not want to deal with small start-up games by developers because they often have poor conversion and low retention rates with players. Therefore, large affiliates are hesitant to deal with small developers until they have some trading history. As these small developers are paid on a periodic basis and not in real time, they often suffer cash flow issues. Joy Gaming easily solves this through our pay-per-game model. Each time customers play on the game, the payments are made to the respective participants in the game. This ensures an agile ecosystem with a small feedback loop that will even further encourage new and innovative operations by developers.

7. Team

The JOYGaming team has decades of experience within the gaming industry and comprises of senior executives and developers from multi-billion dollar gaming operators like Bet365, Pokerstars, Novomatic and Uber.

These firms generate hundreds of millions of dollars in transactions a day and the team is well experienced to deal with the security and scalablity of building out such systems. JOY Gaming developers have extensive experience building out complex mathematical models, systematic game development and blockchain applications.

JOY Gaming is advised by the CFO of Mr Green (publicly listed online gaming operator on NASDAQ), Keld Knudsen, to assist with financials and strategic planning. He has extensive experience to dealing with financial numbers particular to the gaming industry and operational expertise in running a large public company.

7.1 Team Members

CEO

Andrew MacDonald

20 years of experience in Retail and Online gaming working for major blue-chip companies. Successfully applying marketing retention techniques focusing on the individual player as well as ensuring quality game offerings to promote business growth. A keen troubleshooter with a strong data focus.

Linkedin profile - https://www.linkedin.com/in/andrew-macdonald-039a5a15

CMO

Mike Leys

Over 34 years of professional experience, including 30 years in marketing sector. Senior Manager and senior marketing specialist with knowledge and proofed involvement in all areas of on and offline marketing and ecommerce across the world. His sector experience includes iGaming, entertainment, mobile, retail, financial services. Since 2005 in the iGaming sector - successfully launching a number of online gaming sites with a focus on attracting quality players.

Linkedin profile - https://www.linkedin.com/in/mikeleys

CTO

Steve Giordano Imbroll

Full 10 years of Software Development experience, 7 years of Business Intelligence, Banking and Finances. High skilled product developer for, a.o., Sony, Uber & PKR Technologies. Professional juggler of multiple requests from various departments. Visioner on the intricacies of the company’s performance. Recently fascinated with Gaming and Securities.

Linkedin profile - https://www.linkedin.com/in/stevegimbroll

7.2 Advisors

Keld Knudsen

Mr. Knudsen has more than 30 years of experience with blue chip and multinational organizations including American Express, Fujitsu Siemens Computers, QXLricardo.com, Macromedia and Unibet. He has eight years of experience in online gaming, joining Mr Green as CFO during its early start-up phase. With a focus on the big picture, he is passionate about driving strategic and business development through financial information and data intelligence.

Justin Jovanovic

Justin is the Chief Operating Officer of investFeed - the leading cryptocurrency social network – powered by over 105,000+ crypto specific investors and enthusiasts since transitioning into Beta in January 2018. Justin has been a part of several successful ICOs, including investFeed’s, and has a passion for progressive decentralization and blockchain innovation.

8. Token sale structure

Cryptocurrency accepted: ETH, BTC, Wire transfer

Hard-cap: JOYGaming (JOY) tokens sale has a hard-cap of 46 340 000 USD.
Soft-cap: JOYGaming (JOY) tokens sale has a soft-cap of 1 000 000 USD. If the total amount raised is below the soft-cap, the offering is considered failed.

Timescale: Starting approximately on 20th of March 2018 and lasting for up to 31 days or before all the tokens are distributed.

Oversubscription: When JOYGaming (JOY) tokens offering raises more than 46 340 000 USD, the token sale will be closed immediately. There is a chance of oversubscription. In such an event, the exceeding amount of fund will be returned within 15 days after the close of the token sale.
Please note that no interest will be paid in such case.

Failure: If the token sale does not hit the soft-cap, then it will be considered a failed token sale. The offering will be terminated and any funds sent will be returned within 15 days after the close of the token sale. Please note that no interest will be paid in such case.

Other risks: The sale of the tokens involves a number of other risks that are explained in the Private Placement Memorandum (PPM) that accompanies the token sale documents. Those risks include, without limitation, the SEC’s current position that similar tokens were considered securities and required registration or an exemption, potential loss of value in the tokens, inability to resell the tokens, failure to develop the Joy Gaming network, and viability of technology risks. The reader is urged to read the PPM for a fuller explanation of the risks and to obtain proper counsel before proceeding with any investment.

Token Distribution

Presale 20% 140,000,000
Sold during ICO 30% 210,000,000
Rewards pool (VIP etc) 10% 70,000,000
Sold on the platform 23% 161,000,000
Founding team, vested for 24 months 12% 84,000,000
Ambassadors, Fund Raising Fees 3% 21,000,000
ICO bounties 2% 14,000,000
Total 100% 700,000,000

9. Road Map for Joy Gaming

JUNE 2017
OP: 500,000 Seed Funding
OCTOBER 2017
OP: Onboard advisors from industry and blockchain
NOVEMBER 2017
OP: Joy Gaming Foundation Established OUT: Speaking at BlockChain Expo
DECEMBER 2017
TECH: Demo Slot Machine using Smart Contracts OP: Application for Gambling Developer License TECH: Launch of Joy Gaming Platform for Developers TECH: Code Audit
JUNE 2018
OUT: First big event “2018 World Soccer Guessing Game Campaign ” and more promotion activities
JULY 2018
TECH: Different math models for all kinds of casino games, integration with crypto wallet on Playcosmo, processing more Commercial partnerships with Casinos
AUGUST 2018
TECH: Real Games live on Playcosmo.com and more than 100 Developers will be developing on the platform
SEPTEMBER 2018
TECH: Starting on backend integrations with more than 10 Casinos
NOVEMBER 2018
TECH: Have actual 10 games live on 10 casinos, Stable coin in test mode
DECEMBER 2018
TECH: Expand into fixed odds games and stable coin live to improve the game experiences.
FEBRUARY 2019
OP: Enter into sports wagering given the relaxed US regulations for sports book on the Federal level (all works are prepared)
JUNE 2019
TECH: Start integration of Joy Gaming Coins with Offline Casinos

10. Declaration of Disclaimers

An investment in the SAFT involves a high degree of risk. You should consider carefully the risks described below, together with all of the other information contained in this Memorandum, the SAFT, and the White Paper before making an investment decision. The following risks entail circumstances under which, our business, financial condition, results of operations and prospects could suffer.

Risks

Risks associated with an investment in the SAFT

Joy Gaming may not successfully develop, market and launch the Joy Gaming technology platform and Investors may not receive JOYGamings.

The Joy Gaming technology platform has not yet been fully developed by the Company and it will require significant capital funding, as well as developer and management expertise, time and effort in order to develop and successfully launch the Joy Gaming technology platform. The Company may have to make changes to the specifications of the Joy Gaming technology platform or JOYGamings for any number of legitimate reasons or the Company may be unable to develop the Joy Gaming technology platform in a way that realizes those specifications or any form of a functioning platform. It is possible that the Joy Gaming technology platform may not ever be released and there may never be an operational Joy Gaming Token. The Joy Gaming technology platform or JOYGamings, if successfully developed and maintained, may not meet investor expectations at the time of purchase. Furthermore, despite good faith efforts to develop and launch the Joy Gaming technology platform and subsequently to develop and maintain the Joy Gaming technology platform, it is still possible that the Joy Gaming technology platform will experience malfunctions or otherwise fail to be adequately developed or maintained, which may negatively impact the Joy Gaming technology platform and JOYGamings.

The Company will use the proceeds of the Pre-Sale to make significant investments to develop and launch a viable Joy Gaming technology platform and subsequently to build a network upon which users can realize utility and value. The Company may not have or may not be able to obtain the technical skills and expertise needed to successfully develop the Joy Gaming technology platform and progress it to a successful launch of the Joy Gaming technology platform. While the Company has sought to retain and continue to competitively recruit experts, there may be a shortage of management, technical, scientific, research and marketing personnel with appropriate training to develop and maintain the Joy Gaming technology platform. If the Company is not successful in its efforts to demonstrate to users the utility and value of the Joy Gaming technology platform, there may not be sufficient demand for the JOYGamings for the Company to proceed with the Joy Gaming technology platform. As a result, or if the launch of the Joy Gaming technology platform does not occur, Investors may lose all of their investment. “Joy Gaming technology platform” means the release of the Joy Gaming technology platform structure upon which online gaming would be enabled in a transparent and verifiable manner, with reduced costs of operation, and at a speed acceptable to online gaming players, as described above in Company Overview.

Investments in startups including Joy Gaming involve a high degree of risk. Investments in JOYGaming sales may involve an even higher degree of risk.

Financial and operating risks confronting startups are significant. The startup market in which Joy Gaming competes is highly competitive and the percentage of companies that survive and prosper is small. Startups often experience unexpected problems in the areas of product development, marketing, financing, and general management, among others, which frequently cannot be solved. In addition, startups may require substantial amounts of financing, which may not be available through private placements, public markets or otherwise.

Joy Gaming may be forced to cease operations or take actions that result in a Dissolution Event.

It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of cryptographic and fiat currencies, the inability by the Company to establish a launch of the Joy Gaming technology platform and the JOYGamings’ utility, the failure of commercial relationships, or intellectual property ownership challenges, the Company may no longer be viable to operate and the Company may dissolve or take actions that result in a Dissolution Event.

The SAFTs may not be transferred.

The terms of the SAFT prohibit transfer of the SAFT. As a result, Investors will be required to hold their SAFT until the earlier of the launch of the Joy Gaming technology platform and the delivery of all of the JOYGamings, or the termination of the SAFT pursuant to the provisions set forth therein. Consequently, Investors must be prepared to bear the risk of an investment in the SAFT until the termination of the SAFT pursuant to the terms set forth therein.

The tax treatment of the SAFT, the purchase rights contained therein and the JOYGamings distribution is uncertain and there may be adverse tax consequences for Investors upon certain future events.

The tax characterization of the SAFT and the JOYGamings is uncertain, and each Investor must seek its own tax advice in connection with an investment in the SAFT. An investment pursuant to the SAFT and the purchase of JOYGamings pursuant thereto may result in adverse tax consequences to Investors, including withholding taxes, income taxes and tax reporting requirements. Each Investor should consult with and must rely upon the advice of its own professional tax advisors with respect to the U.S. and non-U.S. tax treatment of an investment in the SAFT and the purchase rights contained therein.

Risks associated with the JOYGamings and the Joy Gaming technology platform

The Joy Gaming technology platform may not be widely adopted and may have limited users.

It is possible that the Joy Gaming technology platform will not be used by a large number of individuals, companies and other entities or that there will be limited public interest in the creation and development of a blockchain-based online gaming platform (such as the Joy Gaming technology platform). Such a lack of use or interest could negatively impact the development of the Joy Gaming technology platform and therefore the potential utility of JOYGamings.

Alternative platforms may be established that compete with or are more widely used than the Joy Gaming technology platform.

It is possible that alternative platforms could be established that utilize the same or similar technology underlying the Joy Gaming technology platform and attempt to facilitate online gaming platforms that are materially similar to the Joy Gaming technology platform. The Joy Gaming technology platform may compete with these alternative platforms, which could negatively impact the Joy Gaming technology platform and the JOYGamings.

The open-source structure of the Joy Gaming technology platform means that the Joy Gaming technology platform may be susceptible to developments by users or contributors that could damage the Joy Gaming technology platform or the Company’s reputation and could affect the utilization of the Joy Gaming technology platform and the JOYGamings.

The Joy Gaming technology platform will operate based on an open-source technology maintained by the Company and other contributors. The open-source nature of the Joy Gaming technology platform means that it may be difficult for the Company or contributors to maintain or develop the Joy Gaming technology platform and the Company may not have adequate resources to address emerging issues or malicious programs that develop within the Joy Gaming technology platform adequately or in a timely manner. Third parties not affiliated with the Company may introduce weaknesses or bugs into the core infrastructure elements of the Joy Gaming technology platform and open-source code which may negatively impact the Joy Gaming technology platform. Such events may result in a loss of trust in the security and operation of the Joy Gaming technology platform and a decline in user activity and could negatively impact the market price of the JOYGamings.

The Joy Gaming technology platform may be the target of malicious cyberattacks or may contain exploitable flaws in its underlying code, which may result in security breaches and the loss or theft of JOYGamings. If the Joy Gaming technology platform’s security is compromised or if the Joy Gaming technology platform is subjected to attacks that frustrate or thwart our users’ ability to access the Joy Gaming technology platform or their JOYGamings, then users may cut back on or stop using the Joy Gaming technology platform altogether, which could seriously curtail the utilization of the JOYGamings and cause a decline in the market price of the JOYGamings.

The Joy Gaming technology platform, the open-source software, and other interfaces or applications built upon the Joy Gaming technology platform are still in an early development stage and are unproven, and there can be no assurances that the Joy Gaming technology platform and the creating, transfer or storage of the JOYGamings will be uninterrupted or fully secure, which may result in a complete loss of users’ JOYGamings or an unwillingness of users to access, adopt, and utilize the Joy Gaming technology platform. Further, the Joy Gaming technology platform may also be the target of malicious attacks seeking to identify and exploit weaknesses in the software or the Joy Gaming technology platform, which may result in the loss or theft of JOYGamings. For example, if the Company and the Joy Gaming technology platform are subject to unknown and known security attacks (such as double-spend attacks, 51% attacks, or other malicious attacks), this may materially and adversely affect the Joy Gaming technology platform. In any such event, if the launch of the Joy Gaming technology platform does not occur or if the Joy Gaming technology platform is not widely adopted, Investors may lose all of their investment.

Risks related to blockchain technologies and digital assets

The regulatory regime governing the blockchain technologies, cryptocurrencies, tokens and token offerings such as the Joy Gaming technology platform and the JOYGamings is uncertain, and new regulations or policies may materially adversely affect the development of the Joy Gaming technology platform and the utility of the JOYGamings.

Regulation of tokens (including the JOYGamings) and token offerings such as this, cryptocurrencies, blockchain technologies, and cryptocurrency exchanges currently is undeveloped and likely to rapidly evolve, varies significantly among international, federal, state and local jurisdictions and is subject to significant uncertainty. Various legislative and executive bodies in the United States and in other countries may, in the future, adopt laws, regulations, guidance, or other actions, which may severely impact the development and growth of the Joy Gaming technology platform and the adoption and utility of the JOYGamings. Failure by the Company or certain users of the Joy Gaming technology platform to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines.

As blockchain networks and blockchain assets have grown in popularity and in market size, federal and state agencies have begun to take interest in, and in some cases regulate, their use and operation. In the case of virtual currencies, U.S. state regulators like the New York Department of Financial Services have created new regulatory frameworks. Others, as in Texas, have published guidance on how their existing regulatory regimes apply to virtual currencies. Some U.S. states, like New Hampshire, North Carolina, and Washington, have amended their state's statutes to include virtual currencies into existing licensing regimes. Treatment of virtual currencies continues to evolve under U.S. federal law as well. The U.S. Department of the Treasury, Securities Exchange Commission, and Commodity Futures Trading Commission, for example, have published guidance on the treatment of virtual currencies. The U.S. Internal Revenue Service (the “IRS”) released guidance treating virtual currency as property that is not currency for U.S. federal income tax purposes, although there is no indication yet whether courts or other U.S. federal or state regulators will follow this classification. Both federal and state agencies have instituted enforcement actions against those violating their interpretation of existing laws.

The regulation of non-currency use of blockchain assets is also uncertain. The CFTC has publicly taken the position that certain blockchain assets are commodities, and the SEC has issued a public report stating U.S. federal securities laws require treating some blockchain assets as securities. To the extent that a domestic government or quasi-governmental agency exerts regulatory authority over a blockchain network or asset, the Joy Gaming technology platform and the JOYGamings may be materially and adversely affected.

Blockchain networks also face an uncertain regulatory landscape in many non-U.S. jurisdictions such as the European Union, China and Russia. Various non-U.S. jurisdictions may, in the near future, adopt laws, regulations or directives that affect the Joy Gaming technology platform. Such laws, regulations or directives may conflict with those of the U.S. or may directly and negatively impact our business. The effect of any future regulatory change is impossible to predict, but such change could be substantial and materially adverse to the development and growth of the Joy Gaming technology platform and the adoption and utility of the JOYGamings.

New or changing laws and regulations or interpretations of existing laws and regulations, in the U.S. and other jurisdictions, may materially and adversely impact the value of the currency in which the JOYGamings may be exchanged, the liquidity of the JOYGamings, the ability to access marketplaces or exchanges on which to trade the JOYGamings, and the structure, rights and transferability of JOYGamings.

This Issuance of JOYGamings May Constitute the Issuance of a “Security” Under U.S. Federal Securities Laws

The JOYGaming is a utility token that has a specific consumptive use – i.e., it allows participants in the Joy Gaming technology platform to receive and pay value for online gaming services on a distributed network with significant advantages over current online gaming services. Due to the nature of the JOYGaming, we do not think it should be considered a “security” as that term is defined in the Securities Act.

On July 25, 2017, the United States Securities and Exchange Commission (the “SEC”) issued a Report of Investigation under Section 21(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), describing an SEC investigation of The DAO, a virtual organization, and its use of distributed ledger or blockchain technology to facilitate the offer and sale of DAO Tokens to raise capital. The SEC applied existing U.S. federal securities laws to this new paradigm, determining that DAO Tokens were securities. The SEC stressed that those who offer and sell securities in the U.S. are required to comply with U.S. federal securities laws, regardless of whether those securities arepurchased with virtual currencies or distributed with blockchain technology. The Commission’s announcement, and the related Report, may be found here: https://www.sec.gov/news/press- release/2017-131

After reviewing the Report, we believe that the JOYGaming is substantially different from DAO Tokens, and should not be considered a “security” under U.S. federal securities laws. Nevertheless, as noted by the SEC, the issuance of tokens represents a new paradigm and the application of the federal securities laws to this new paradigm is very fact specific. If the JOYGaming were deemed to be a security under federal securities laws then, prior to the issuance of JOYGamings pursuant to the SAFT, we may be required to register such issuance under the Securities Act. The registration of JOYGamings under the Securities Act would result in significant delay in the issuance of JOYGamings and would require us to incur substantial additional expense.

The Pre-Sale may be subject to registration under the Exchange Act if the Company has assets above

$10 million and more than 2,000 Investors participate in the Pre-Sale.
Companies with total assets above $10 million and more than 2,000 holders of record of its equity securities, or 500 holders of record of its equity securities who are not accredited investors, must register that class of equity securities with the SEC under the Exchange Act. With the capital raised from the Pre-Sale, the Company may surpass $10 million in assets as it builds out the Joy Gaming technology platform. Furthermore, the SAFTs are likely considered a security under U.S. securities law and because there is the possibility that this Pre-Sale may surpass 2,000 Investors, the Company may have more than 2,000 holders of record of its equity securities following the Pre-Sale. However, it is possible that the SAFT is not an “equity security” even if it is a “security”. If the total assets and equity security holders conditions are met then Joy Gaming will have to register the Pre-Sale with the SEC, which will be a laborious and expensive process. If such registration takes place, much of the information regarding the Pre-Sale will be available to the public. The Company would have the ability to avoid registration in such a scenario if the SAFTs convert into the JOYGamings prior to the last day of the Company’s fiscal year, but, due to the unpredictable nature of complex software development such as the Joy Gaming technology platform, there is no guarantee that the Joy Gaming technology platform will have launched by such a date.

The Investors will have no control and the Company may only have limited control once the launch of the Joy Gaming technology platform occurs.

The Joy Gaming technology platform is comprised of open-source technologies that depend on a network of computers to run certain software programs to process transactions. Because of this less centralized model, the Company has limited control over the JOYGamings and the Joy Gaming technology platform once launched. In addition, the Investors are not and will not be entitled, to vote or receive dividends or be deemed the holder of capital stock of the Company for any purpose, nor will anything be construed to confer on the Investors any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise.

There may be occasions when certain individuals involved in the development and launch of the Joy Gaming technology platform may encounter potential conflicts of interest in connection with the Joy Gaming technology platform, such that said party may avoid a loss, or even realize a gain, when other Investors in the Pre-sale or in JOYGamings are suffering losses.

There may be occasions when certain individuals involved in the development and launch of the Joy Gaming technology platform or JOYGamings may encounter potential conflicts of interest in connection with the Pre-Sale and the Joy Gaming technology platform, such that said party may avoid a loss, or even realize a gain, when other Investors in the Pre-Sale and the JOYGamings are suffering losses. Investors in SAFTs may also have conflicting investment, tax, and other interests with respect to SAFT investments, which may arise from the terms of the SAFT, the Joy Gaming technology platform code, the timing of the launch of the Joy Gaming technology platform or other JOYGaming pre-sales, or other factors. Decisions made by the key employees of the Company on such matters may be more beneficial for some Investors than for others.

Investors may lack information for monitoring their investment.

The Investor may not be able to obtain all information it would want regarding the Company, JOYGamings, or the Joy Gaming technology platform, on a timely basis or at all. It is possible that the Investor may not be aware on a timely basis of material adverse changes that have occurred with respect to the Joy Gaming technology platform. While the Company has made efforts to use open-source development for the JOYGamings, this information may be highly technical by nature. As a result of these difficulties, as well as other uncertainties, an Investor may not have accurate or accessible information about the Joy Gaming technology platform.

JOYGamings have no history.

The JOYGamings will be a newly formed token and have no history. Each SAFT should be evaluated on the basis that the Company or any third party’s assessment of the prospects of the Joy Gaming technology platform may not prove accurate, and that the Company will not achieve its investment objective. Past performance of the Company, or any similar token or SAFT, is not predictive of future results.

If the Joy Gaming technology platform is unable to satisfy online gaming requirements or needs, security, privacy, and other government and/or industry-specific requirements, its growth could be harmed.

There are a number of online gaming, security, privacy and other government- and industry-specific requirements or concerns, including those that require companies to notify individuals of data security incidents involving certain types of personal data. Security compromises could harm Joy Gaming’s reputation, erode user confidence in the effectiveness of its security measures, negatively impact its ability to attract new users, or cause existing users to stop using the Joy Gaming technology platform. Government enforcement actions against tokens and/or blockchains because of the potential money laundering concerns or enabling of illicit transactions could significantly harm the viability of the Joy Gaming technology platform and the value of the JOYGamings.

The further development and acceptance of blockchain networks, including the Joy Gaming technology platform, which are part of a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of blockchain networks and blockchain assets would have a material adverse effect on the successful development and adoption of the Joy Gaming technology platform and the JOYGamings.

The growth of the blockchain industry in general, as well as the blockchain networks with which the Joy Gaming technology platform will rely and interact, is subject to a high degree of uncertainty. The factors affecting the further development of the cryptocurrency industry, as well as blockchain networks, include, without limitation:

* Worldwide growth in the adoption and use of Ethereum, and other blockchain technologies;

* Government and quasi-government regulation of Ethereum, and other blockchain assets and their use, or restrictions on or regulation of access to and operation of blockchain networks or similar systems;

* The maintenance and development of the open-source software protocol of the Ethereum networks;

* Changes in consumer demographics and public tastes and preferences;

* The availability and popularity of other forms or methods of buying and selling goods and services, or trading assets including new means of using fiat currencies or existing networks;

* General economic conditions and the regulatory environment relating to cryptocurrencies; or

* A decline in the popularity or acceptance of Ethereum or other blockchain-based tokens would adversely affect our results of operations.

The slowing or stopping of the development, general acceptance and adoption and usage of blockchain networks and blockchain assets may deter or delay the acceptance and adoption of the Joy Gaming technology platform and the JOYGamings.

The prices of blockchain assets are extremely volatile. Fluctuations in the price of digital assets could materially and adversely affect our business, and the JOYGamings may also be subject to significant price volatility.

The prices of blockchain assets such as Ethereum have historically been subject to dramatic fluctuations and are highly volatile, and the market price of the JOYGamings may also be highly volatile. Several factors may influence the market price of the JOYGamings, including, but not limited to:

* Global blockchain asset supply;

* Global blockchain asset demand, which can be influenced by the growth of retail merchants’ and commercial businesses’ acceptance of blockchain assets like cryptocurrencies as payment for goods and services, the security of online blockchain asset exchanges and digital wallets that hold blockchain assets, the perception that the use and holding of blockchain assets is safe and secure, and the regulatory restrictions on their use;

* Investors’ expectations with respect to the rate of inflation;

* Changes in the software, software requirements or hardware requirements underlying the Joy Gaming technology platform;

* Changes in the rights, obligations, incentives, or rewards for the various participants in the Joy Gaming technology platform;

* Interest rates;

* Currency exchange rates, including the rates at which digital assets may be exchanged for fiat currencies;

Fiat currency withdrawal and deposit policies of blockchain asset exchanges on which the JOYGamings may be traded and liquidity on such exchanges;

* Interruptions in service from or failures of major blockchain asset exchanges on which the JOYGamings may be traded;

* Investment and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in the Joy Gaming technology platform or JOYGamings or other blockchain assets;

* Monetary policies of governments, trade restrictions, currency devaluations and revaluations;

* Regulatory measures, if any, that affect the use of blockchain assets such as the JOYGamings;

* The maintenance and development of the open-source software protocol of the JOYGamings;

* Global or regional political, economic or financial events and situations; or

* Expectations among Joy Gaming technology platform or other blockchain assets participants that the value of the JOYGamings or other blockchain assets will soon change.

A decrease in the price of a single blockchain asset may cause volatility in the entire blockchain asset industry and may affect other blockchain assets including the JOYGamings. For example, a security breach that affects investor or user confidence in Ethereum may affect the industry as a whole and may also cause the price of the JOYGamings and other blockchain assets to fluctuate.


USE OF PROCEEDS

A significant portion of the proceeds of the Pre-Sale will be used by the Company for the development, marketing, partnerships and operations associated with the Joy Gaming technology platform, including to achieve the launch of the Joy Gaming technology platform powered by a blockchain and the JOYGamings

References

[1] https://iota.org/IOTA_Whitepaper.pdf

[2] https://www.sia.tech/whitepaper.pdf

[3] https://ipfs.io/ipfs/QmR7GSQM93Cx5eAg6a6yRzNde1FQv7uL6X1o4k7zrJa3LX/ipfs.draft3.pdf

[4] https://storj.io/storj.pdf

[5] https://bitcoin.org/bitcoin.pdf

[6] https://github.com/ethereum/wiki/wiki/White-Paper

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