Ara Token Sale Review – Decentralizing Content on the Blockchain
I rarely do this, but there was an interesting reddit post about a platform being launched that was supported by Disney and Sony. Obviously I clicked on it to find out more. Therefore, here is my unsponsored Ara token sale review for those interested in the platform or those just looking to see what is on the market right now.
Nothing should be considered investment or financial advice. Enjoy the ride.
What is Ara
Ara is an Ethereum based ERC-20 token that is aiming to fix the problem of content monetization, proof of ownership, and create a direct to consumer marketplace for content creators. The project is a subsidiary of their parent company Littlestar which is a content creation platform for the distribution of AR, VR, and traditional content. Ara is more than likely not directly supported or funded by Disney or Sony, but I am sure their parent company is leveraging those relationships to support their subsidiary which by all means makes sense.
Ara Purpose
The purpose behind Ara stems from the ongoing problems with creating content in almost every industry. Content creators are often either copied, not credited, or get no value at all from their work. This is especially bad in the social media world, online platforms, movie industry, and even in the music industry. Most of the time content is freely copied with no consequence while the creators have no way of proving their stake or defending their content.
Although, Ara is mainly targeting game development, music streaming, and video creation to start.
Ara Benefits
Ara has great benefits like security and identification all on a blockchain based ecosystem. More than this, creators and developers using Ara only need to publish their content once on the Ara network. After publishing, the content will be distributed through out the entire network and available cross platform which saves time, money, and effort.
Selling direct to Consumer
To break this down further, the creators will be able to make more money on their content by being able to sell directly to the customer and reward them for hosting the content as well. This eliminates third party sellers, publishers, and marketplaces which dig into the overall profits for creators.
In addition these third party sources are time consuming, costly and over leverage the market to get their way by manipulating prices. In short, they limit the creators impact and exposure by acting like gate keepers between creators and the consumers.
Sharing Economy
In a weird twist the Ara team likes to identify their project with AirBnb. If we think about it, the sharing economy does not have to stop with houses and cars. People are already starting to share their computer resources through mining and staking to support the network for most blockchains.
Creators that make movies or songs or even video games could potentially sell shares, royalty options, or gather funding through a similar sharing economy. Likewise, they can sell the rights to their creations and gain more liquidity. In particular, this would drive competition in the market further than ever before.
Ara ID
Giving power back to the users and content creators is no easy task. Therefore, the team has designed a few ideas to help out. The first idea is establishing users Ara ID. This is an ID that every content creator and user will have in order to identify themselves across multiple platforms.
Diving more into this, Ara is aiming to be implemented in platforms like Youtube, Vimeo, etc. The idea is to have the Ara ID recognized across all platforms. Then platforms can simply run an API or scrape the decentralized database on the blockchain for ID verification. This proves the authenticity of the IDs and also allows a common system for IDs cross platform. With these IDs, content creators will have more control over how they are paid, setting prices, and more.
Content Creators Options
Some of the cool options that content creators will have based on the AFS Standard are listed below from a quick excerpt of the White paper:
1) Royalties: Purchases can be customized to distribute proceeds amongst many different Ara accounts by percent breakdown.
2) Bulk Purchases: Prices can be tiered based on quantity purchased.
3) Resale Conditions: Purchased content can be resold a number of times for at least a minimum resale price as specified by the content creator.
4) Ownership Transfers: The owner of an AFS can readily transfer ownership to another Ethereum address.
5) Pre-Orders: Content can be purchased before it is available for download. Purchasers can submit a reward budget ahead of time so that they can begin downloading an AFS as soon as it is available.
6) Scarcity: Content creators can define a maximum number of sales for an AFS, after which the AFS becomes unlisted and unavailable for purchase.
–Ara White Paper, Page 9
Competitors in Content Decentralization
While the idea is a great one, it is not exactly unique. There are already two platforms in this space looking to do similar things that I can think of off the top of my head without doing any research. While Ara does boast substantial partnerships, most of these are grandfathered in due to their parent company.
Let’s look at the two similar competitors I can think of.
Pie Pie vs Ara
Similar platforms have risen up that claim to give the power back to content creators similar to Pie Pie (formerly Lit). Pie Pie is a social media platform that leverages cpu usage to mine while providing passive income for content creators through likes and views. This platform can be thought of by imagining if Facebook handed out small tokens every time you received a like on your photo or someone replayed one of your videos.
The main difference between Pie Pie and Ara is that Ara is going to be more of a market place based structure where content creators can set prices for using their content instead of having a direct social media aspect tied to it. While these are not identical in structure, the thought of decentralizing content is not new.
Machix vs Ara
The second project I thought of came from one of the original creators of Pie Pie, Machix. Machix has a more closely related idea to Ara in that it is a monetization platform for music artists. On this platform, a music artist can sell shares and royalty rights to their songs which investors can purchase or fund.
Machix is more inline with Ara in that it is a marketplace that artists can utilize to distribute their music, sell rights, and fund their projects.
Where does the name Ara come from?
A little off topic, but I saw this question during research. The answer is in one of the projects main videos.
The name is representative of the where Zeus and other greek gods came together and vowed to take down the titans. In the same sense, the Ara project is looking to use blockchain in order to take down to traditional landscape of content monetization.
Challenges for Ara
While the Ara platform is a great idea, they most certainly has an uphill battle.
The largest benefactor to their idea is the parent companies contacts and resources. Additionally, the fact that blockchain is currently hitting another bull run is a huge plus. Besides that, there really are not many new ideas or innovative concepts in this project. Yes, the idea is cool, but the problem still stands as tall as it ever did, unifying the platforms.
The largest problem for this idea is getting platforms like Youtube, Vimeo, soundcloud, to not only recognize your product but to utilize and depend on it. This product only works long term they can convince these platforms to unite to combat the problems of content coping.
Without these platforms working to uphold the Ara ID and the content contracts that the creators will have that prove they own the content, it really does not change much.
International Law
The other elephant in the room is international law. I know from research that Machix and Pie Pie (mentioned above) both had problems with defending contracts internationally. You have to remember every country just about has different laws on owning and identifying who owns what in terms of content.
If the government or regulatory bodies in each respective country do not uphold the blockchain data then they are basically useless in a court of law. Which in turn means, a lot of money wasted on litigation and time proving you own content based on decentralized blockchain records.
While there are several countries around the world starting to allow blockchain based records and transactions to be used in court as evidence or facts, that does not mean every blockchain or protocol will be upheld. The is no way for governments or courts to go through and authenticate every single blockchain stack or ledger.
Ara Token Sale
Now that I have gone through everything I consider worth mentioning, let’s discuss the token sale.
The token sale will open up on February 28, 2020. Although, there is currently no information to be found about the amount of tokens to be sold, financial token economics, or the price per token. Really, there is very little financial information about the project, funding, or token sale at all.
This could mainly be due to private funding coming from existing clients, but it really removes the main market from contributing to this decentralized project. Although, they do a decent job of listing out the token utility.
Ara Token Utility
Currently, the only utilities you get by owning the Ara token from the white paper are:
1) Consumers can use Ara tokens to make any sort of purchase, ranging from digital content for enjoyment to new Modules to participate in
2) Service requesters can use Ara tokens to initiate job requests and to set bounties for the successful completion of those jobs
3) Service providers can deposit Ara tokens as a commitment to fulfill a task in return for rewards.
4) Developers can use Ara tokens to deploy new Modules into the network
Ara White Paper, Page 14
Ara Token Sale Review
To be blunt, there really is not much to go off of. There is not a lot information on the funding for the sale, the token availability, or the time frames. The best part is their 2020 roadmap simply states,
Virtually every piece of content in the world indexed, searchable, bought and sold on Ara
-Ara Roadmap
Seriously, I do not think that put much thought into the “after” part of development. While it is great that they are bridging into blockchain and pushing the space further through development and exposure, it does not seem to be a complete market strategy.
For myself, I would not invest in the Ara token sale. Especially not with the lack of transparency on the financial side. What this seems more like is a privately funded company that wants to launch their company public through a “token sale” similar to a traditional IPO when they want to add liquidity for early investors and further fund the project by creating new shares or “tokens”. In essence, anyone investing now has already missed the seed and early series rounds, the most profitable times to invest.
In addition, there is an excessive amount of competition for this space and no real answer to “how” they are going to get all of the platforms on board. For me, I like the idea. Although, I am not sold. I wish them the best of luck, but as they say on Shark Tank,
