Cryptocurrency analyst. Founder and editor at btcpeers.com
The Decentralized economy based on permissionless protocols is swiftly growing as more people in the world embrace the idea of P2P ecosystems.
It is no wonder the DeFi market has tripled within the past two months to hit a total locked value (TVL) of $3.7 billion according to DeFi Pulse. While skeptics have speculated a bubble, innovators are working round the clock to see to it that more opportunities emerge from decentralization.
Initially, the prevalent idea was Decentralized Finance (DeFi) in terms of financial services like lending and borrowing markets. This has, however, evolved over time as more industries tap into the potential of decentralized protocols.
One niche that has particularly shown to be compatible with the P2P ecosystem is the content creation space which is today dominated by centralized networks run by big Tech. That said, a new decentralized protocol dubbed WOM Protocol is seeking to change modern-day marketing as we know it.
WOM Protocol Pte. Ltd. which is behind the creation of an ad-free marketing environment has in fact partnered with Chainlink in an effort to decentralize the price feeds of its native token.
Being an area with so much potential, I have been following it keenly and decided to have an interview with WOM Protocol CEO, Melanie Mohr. She gave detailed insights on the DeFi space as well as the potential in MarTech which is now a blockchain prospect.
Andrey Sergeenkov: Decentralized protocols are starting to shape a new economy; can you give us some insights as to what demand factors are pushing the space to grow significantly?
Melanie Mohr : As with other sectors where decentralization is getting traction, the advertising and marketing area is rife with misaligned interests.
Agents and platforms are incentivized to extract as much revenue as possible from brands and advertisers, regardless of true engagement with real users. Users are annoyed by the onslaught of ads.
Advertisers are confused and disappointed at the effectiveness of the ads, and the inability to do true correlation. Platforms do a minimal amount of fraud prevention, to placate advertisers while still keeping large revenue from them.
Decentralized protocols are an attempt to disintermediate some of the misaligned agencies while providing true shared interests and income for users, platforms, merchants, and brands.
Andrey Sergeenkov: What is WOM Protocol’s role as an upcoming contributor to the shared or protocol economy?
Melanie Mohr : The WOM Protocol is designed precisely to create and enable this proper interest alignment, to share rewards and advertising revenue to those directly involved. We very intentionally refrained from adding any component of revenue for ourselves, to maintain a proper interest alignment, and to pave the way for eventual full decentralization.
The WOM Protocol scales an entire ecosystem to enable monetization of word-of-mouth content for brands, creators, and publishers. Word-of-mouth content is known as authentic recommendations from real product fans.
Numerous studies across decades prove this form of brand advocacy is far more effective and has a higher conversion than any currently-available marketing channel because the messages come from peers and not the companies.
Brands and marketers do not have an effective and scalable way to properly identify, incentivize, and measure trusted peer-to-peer recommendations. Even worse, methods such as affiliate and influencer marketing compromise the trustworthiness of content and its creators.
The WOM Protocol, together with the WOM Token, provides a way to reward creators without compromising consumer trust in the content and its creators. We are confident that it will become a viable marketing channel for brands, targeting the $335 billion annual digital marketing spend, and the main revenue stream for content platforms.
Our blockchain-leveraging MarTech solution is currently being tested with more than 900 brands--including Adidas - and platforms with a network of hundreds of thousands of creators and authenticators.
Andrey Sergeenkov: The Decentralized economy has come to be defined by digital tokens, does WOM protocol have its own native token and how is its value accounted for?
Melanie Mohr : We have the WOM token, an Ethereum ERC-20 token, which is traded on a number of top tier exchanges. Within the WOM protocol system, the token is used as a value transfer between users, merchants, brand managers, platforms, and financial investors.
The “users” include both those who create content, those who view and help validate the content, and the platforms who are delivering the interface for engagement, in this case, any digital platform from social networks to e-commerce.
All have a role to play in creating viable and trusted communities, which significantly improves the engagement and reliability of advertising and marketing for brands, merchants, and platforms.
In general, brands and any kind of advertiser purchase WOM and use them to reward content creators, platforms, and content authenticators. They use the WOM campaign manager to access content and interact with the WOM ecosystem of digital platforms that deliver the content to the right audiences.
Andrey Sergeenkov: Being still a young market, what do you think can be done to improve the pricing ecosystem of digital assets to prevent manipulation and market arbitrage?
Melanie Mohr : We can only view this from WOM’s own perspective. We use a private (but publicly auditable) blockchain for transactions within the WOM ecosystem. This allows us to do transactions with immediate finality and zero transaction cost something which is not possible on public chains.
We also provide a “WOM Crypto Bridge” so that any participant may convert WOM to/from the internal chain from/to public ERC-20 WOM at any time.
Andrey Sergeenkov: On that note, does your recent partnership with Chainlink to integrate price oracles reinforce on a decentralization pricing feed approach?
Melanie Mohr : Our intention is to remove ourselves from any type of price setting or market-making. ChainLink is a trusted third party that aggregates information about the WOM trading prices from exchanges where WOM is bought and sold by anyone and provides the price information as an oracle, which we reflect users via our app.
We believe that it is critically important that we use transparent, trusted sources of information on the road to greater decentralization.
Andrey Sergeenkov: The DeFi boom has seen leading exchanges like Binance list Maker and DAO tokens, what are your future plans to have WOM tokens listed by such exchanges?
Melanie Mohr : We certainly expect that as it gains momentum, WOM will be listed on most of the larger ethical exchanges.
Andrey Sergeenkov: Ethereum appears to have taken the lead in terms of DApp development, do you think WOM Protocol might grow that big as well?
Melanie Mohr : We are not a platform of any sort, and we are not a public blockchain, so we have nothing to say about DApp development. Of course, as a protocol, we are open to engagement by any DApp, from any platform. We are building the first DApps to deliver an interface to engage in the WOM ecosystem, but this can be done by anyone else. The WOM content authenticator is already live on iOS and Android. The very special content rating system is for sure the “soul” of the WOM project.
Andrey Sergeenkov: In line with Decentralized products, what is the WOM Protocol niche?
Melanie Mohr : We are all about one thing, interest alignment for all participants without leaching for advertising and marketing.
Since honesty and trust are the key to word-of-mouth recommendations, a central authority would contradict the essence of WOM by definition. Blockchain technology allows the development of the WOM Protocol as a trustless infrastructure for WOM content. The core mechanisms for emitting and distributing tokens as well as managing the trades between brands, content creators and platforms run as immutable code on the blockchain.
Ultimately the WOM Protocol becomes a DAO that cannot be controlled by any single entity. The WOM Ecosystem has a very strong well-thought-out economic model to keep the ecosystem running without one company overseeing everything.
The WOM Protocol is unique and successful because it reverses the current user-generated content trend seen in influencer advertising and other UGC advertising models. In the current model, advertisers pay influencers and other content creators to then represent their brands “organically” on the creators’ social channels. Consumers understand that the influencer is talking about the product or brand because they were paid to do so, and thus scepticism is raised.
With the WOM Protocol, recommendations from creators must first be authenticated and validated by the crowd. Only once a recommendation is deemed “authentic” can a creator begin to earn rewards for their recommendation. In this manner, brands benefit from honest word-of-mouth marketing and consumers trust the authentic, non-prepaid recommendations.
Andrey Sergeenkov: With activity higher in the DeFi lending and borrowing space, why did WOM Protocol choose to focus on MarTech instead?
Melanie Mohr : To transform DeFi to real use requires people to understand the advantages to move into digital assets. The biggest issue is adoption. Building on existing user or customer habits lowers the barrier for adoption. Creating content, watching content, and commenting on content is done by billions of people. Every day, 2.1 billion product recommendations are made in the digital space. Allowing people to earn tokens with this activity, which is very valuable for advertisers, will lead to DeFi adoption. We consider WOM as a catalyst for DeFi.
WOM is an Ethereum based ERC-20 token, which allows for open, clear decentralized exchange of tokens on any Ethereum compatible platform. Internally, WOM tokens are exchanged between participating users on a private blockchain, to reduce both transaction latency and cost. When any user wishes to do any type of fiat/WOM transactions, the fully open and transparent WOM Crypto-Bridge allows migration to any exchange or any direct Ethereum user account. Everything done in WOM is transparent and auditable by anyone on the Internet, providing the best balance between a precise exchange, governed management, and decentralized financial systems.
Andrey Sergeenkov: How does this MarTech ecosystem add value to stakeholders who include content creators, authenticators, platform users, and brands?
Melanie Mohr : The WOM protocol is designed and intended to create proper ethical compensation and rewards to the direct participants. It specifically excludes intermediaries who add no value. It makes sure that all reward mechanisms have aligned interests with all parties.
Creators and authenticators are rewarded for their work, and platforms gain rewards and direct engagement insight, allowing them to tune their platform. Brands have precise information, allowing for more accurate measurement of campaign effectiveness, and much better price-performance metrics.
Andrey Sergeenkov: What are the cutting edge Decentralized Apps integrated by WOM Protocol to deliver on the said value?
Melanie Mohr : The great thing about the WOM Protocol is that regular apps can adopt and benefit from the Protocol. Apps aren’t required to be DApps to use the WOM Protocol. However, any DApp from any blockchain can use WOM Protocol’s functionality.
To kick start the ecosystem we have built initial versions of a WOM content authenticator app and a WOM campaign management tool for advertisers to access the content and place marketing budgets in the form of WOM tokens, to boost content and scale reach.
Andrey Sergeenkov: So far, are there any major adopters to these solutions offered by WOM Protocol?
Melanie Mohr : The WOM Protocol is currently being tested with more than 900 brands--including Adidas--and platforms with a network of hundreds of thousands of creators and authenticators.
The first creator app that adopted the WOM Protocol is the YEAY app. The YEAY app is social commerce and product recommendation platform with 180 thousand registered users. Currently, the WOM Protocol is in “test mode” in the YEAY app and creators can make recommendations, stake, and earn a version of WOM Tokens that will be swapped to real WOM Tokens when WOM activates the crypto bridge in autumn this year.
Signing Adidas as the first massive global company client is a key point for the project. It signals trust, helping us further establish credibility as the next big MarTech solution. Since starting in the Adidas accelerator we have worked closely with Adidas to develop the first brand campaign using the WOM Protocol and the WOM Campaign Manager. adidas has provided valuable input into the development of the WOM Campaign Manager allowing us to better understand the needs and desires of advertisers.
Advanced Store, one of the European leaders in the display advertising space, will test and use the WOM campaign manager to access WOM content and to run campaigns for their many brand partners. The YEAY app has also integrated Advanced Store’s affiliate network, making every recommendation on the app immediately shoppable around the world.
Other adopters are Groupify and Mycashbacks.com. Both platforms will allow their users to receive WOM Token rewards for honest word-of-mouth recommendations.
Andrey Sergeenkov: Where do you see DeFi in the coming years and how does WOM protocol’s solution align with this vision?
Melanie Mohr : We see DeFi as a recognition that full decentralization as a starting point is not realistic. We are working in a way which puts full decentralization as the end goal and target, while pragmatically guiding the system with informed choices of trusted partners, which includes both centralized and decentralized services. As DeFi becomes more and more capable to handle things such as fiat settlement and cross border transactions, we will enable such services and integrate connections with them in the WOM Protocol.
Andrey Sergeenkov: DeFi News A recent Q2 report by ConsenSys revealed that yield farming frenzy and tokenization protocols drove the market up, don’t you think it might just be another ICO like bubble given FOMO might be driving the market?
Melanie Mohr : Such things are always a danger. We think that by staying firmly aligned with our philosophy and goal of full decentralization, by enforcing proper behavior in the protocol by proper interest alignment, and by being vigilant against leeches, we will not fall victim or participate in such scam-like behavior.
Andrey Sergeenkov: There have been quite a number of security breaches in the industry with close to $26 million compromised in Q2 alone, what is WOM Protocol’s strategy when it comes to network security?
Melanie Mohr : For our token, as an Ethereum ERC-20 device, we have the inherent security of the Ethereum ecosystem.
We are totally paranoid and diligent in our own systems. We implement very low-level controls, such that every public-facing server is actually just a simple reverse proxy with very stringent access controls, and all production servers are behind those proxies on private VPN networks.
The servers are distributed to multiple data centers for fault tolerance and redundancy. Our philosophy is to block everything by default, and open only exactly what is required for the service.
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