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redBUX ICO Review

Before reading this article, please read our disclaimer found at the bottom of the article or here. This Paid Story is brought to you by Me.mento.

The Erotica VR Token

Introduction

Me.mento is a company based in Berlin, Germany. They make vrXcity, a Sims-like virtual world where users can interact in VR with artificially intelligent, photo realistic avatars of their favorite erotic stars with which they can carry out any and all of their fantasies. They are raising money to put the finishing touches to vrXcity, to launch the product and increase the number of adult content stars on their roster to over 7,000 in 2 years.

Their ICO is currently underway, they are raising €130M in exchange for their redBUX tokens. The company is currently selling 10,000 redBUX for €100 (€0.01 per token). There is a 35% discount for the public pre-sale period which will continue until April 15th, the discount will then decrease to 15% after April 16th and will decrease further to 5% on April 30th. Their website can be found here (Warning: link for adults only).

They are capping the pre-sale to 3.9B tokens. An extremely ambitious ICO. We expect to see adult content (and VR) gaining a lot of momentum in the near future. As of today the project has already sold most of their presale tokens (over 2 billion).

The Idea

Combining Sims and VR Pornography

What makes this ICO special is how easy it is to believe the product could be huge. They’ve already demonstrating they can attract the necessary partners by bringing on big names in the space, like Wicked Pictures and several famous adult stars. Nearly everyone naturally drifts to pornography when thinking about applications of AR & VR. vrXcity is what you get when you combine the Sims, VR, and adult content.

What if you could interact in absolutely any way you want? What if you wanted to experience your favorite pornstar, through BDSM, in the moon, or a spaceship? What if you could be anyone you want?
— Sebastian Malm, CPO at redBUX

It’s the world’s first interactive VR erotic platform for adults. Users can interact with fully animated, artificially intelligent avatars of their favorite adult stars (and eventually amateur models that are ‘scanned in’ via pop-up shops and kiosks). They claim to have a 2 years head start on competitors both on quality, and also on their library of 3D models already generated from their previous company.

The company has been in operation since 2014, it was initially focused on making 3D printed models of erotic actors for companies like Wicked Pictures & JOYclub, before transitioning to making 3D digital avatars instead.

“The idea to start with 3D printing came from the fact that it allowed incredible amounts of customization. We had the necessary equipment to scan and create models of porn stars. The transition to VR became clear”
 — Sebastian Malm, CPO at redBUX

Context: Market Sizes & Demographics in VR & Pornography

It is useful to colour the explanation of vrXcity by providing context of the size of the VR/AR and pornography industries.

Pornography:. The global pornography market is one of the largest in the entertainment industry with approximately $100B in sales annually. For further context, the US pornography industry is 50% larger than Hollywood movies on a basis of profits and is larger than both the NFL and NBA combined. In Switzerland, a conservative country, 25% of internet users consume erotic content and in Germany 12.5% of all internet traffic goes to pornography. Needless to say, despite its taboo status, the adult entertainment industry is massive and worth pursuing.

VR/AR: The International Data Corporation (IDC) place the VR market at $5.2B in 2016 and expect it to grow to $162B by 2022, growing at a CAGR of 85.4% (AR) & 44.5% (VR) respectively. The primary demographics of VR users are males under the age of 40, matching up well with that of the pornogrpahy industry. It’s also important to mention that the growth rate of this industry is also expected to be the largest in the technology and entertainment industries. Companies like Google have invested hundreds of billions in VR technologies in the last 3 years.

Pornography has played an important role in the entertainment technology industry over the last several decades. It was instrumental in the success of VHS over Betamax in the 90’s (which was superior technologically) and of Blu-Ray over HD DVD in the mid 2000’s. Me.mento believes pornography will play a similarly important role in the adoption of virtual reality as an entertainment medium by changing the pornography experience from passive (pictures and video) to interactive (virtual reality).

“Sex is all about interacting with each other. The cam girl boom shows that people want to have interaction, there is still a large barrier between the user and the cam girl, you cannot really interact.” 
— Sebastian Malm, CPO at redBUX

vrXcity will be a digital marketplace occurring in a virtual world, comprising: erotic stars (via photorealistic models), consumers, advertising partners and 3rd party content providers. See the figure below for a high-level overview of how each party will interact with vrXcity.

Figure 1. High Level Overview of vrXcity Platform. Image from Page7 of redBUX white paper found here

Erotic Stars — Adult stars and amateurs can create 3D models of themselves at any of me.mento’s scan centers, artificial intelligence is then used to ‘animate’ the avatar, allowing users to interact with a lifelike character.

The erotic star can then rent their own studio, a virtual store within the vrXcity world, where they can offer special services to their fans. They can customize their studio based on the user’s preferences, and even advertise various products like lingerie or sex toys.

Erotic stars gain a long-term revenue stream which only requires a one-time effort of creating their avatar at a scanning site. Once created, digital avatars can interact with clients around the clock. These relationships with users are governed by digital contract, payment is sorted automatically using the redBUX token as currency.

Consumers — Pornography makes up 7.65% of global internet traffic. The fastest growing segment of pornography is webcam / live shows, showing the market desires more personalized content. vrXcity offers a personalized experience, but importantly also allows users to do more than passively watch. It allows them to have life like interactions with their favorite erotic stars.

Like the erotic stars, consumers can also rent out studios in this virtual world and design the rooms according to their wants and needs. They can even bodyscan their real-life partners and enjoy unrealized sexual fantasies with them. They can even organize swinger parties with their friends and earn redBUX through admission fees to their events.

vrXcity will also have a feature called Free Style Studio where the users can design their fantasy experiences and can even choose their dream partner including choosing body size, cup size, eye and hair colour. An additional fee is charged for access to Free Style Studio, the fee will depend on the amount of computer effort required to make the desire come true, how long the sequence is and which star the user selects.

Using blockchain will allows users to enjoy a simple, secure and anonymous system that minimizes distractions from their experience when doing things like paying for goods and services in the virtual world.

Figure 2. Use Cases for redBUX in vrXcity

Image caption: Image from company ICO page found here

Brands/Advertisers — brands can leverage the audience of erotic stars and can create ads without requiring the stars to be physically present. Instead of being limited to 2D pictures or videos, products can be advertised through demonstrations and can be purchased on the spot. Sex toys are a common product sold with adult content, in vrXcity sex toys can be demonstrated by their favorite erotic actors. WebCam girls can also exert their influence over their fans for digital or physical gifts. Advertisers can also take out ads on outdoor buildings in the virtual world.

External Content Providers — 3rd party software developers will be able to interact with vrXcity and will be able to publish 3D pornography games, 360-degree videos and other content using redBUX as a secure and anonymous payment option. Me.mento will receive an initial service fee and small percentage of all revenues generated from sales from 3rd party providers.

The Token — The First Adult Content Token

The redBUX claims to be a utility token, and it is based on the standard ERC-20 Ethereum smart contract. Consumers, erotic stars, advertisers and 3rd party content providers can buy and sell goods and services with the token. They will also be able to buy and sell the token on exchanges.

New users will have to purchase redBUX on exchanges in order to interact with the virtual world. Partners outside of vrXcity, like Wicked Pictures and iwantEmpire, will also accept redBUX as payment for their content and webcam channels, increasing demand for redBUX and increasing transaction volume.

There are 3 reasons that inspired us to do an ICO:
1. We needed a good solution for payments which are extremely restricted for the industry.
2. The ability to do licensing and paying pornstars without the need of complex agreements and paperwork, which are extremely restricted for the industry
3. Leveraging the networking effects that cryptocurrencies provide to their customers. 
- Sebastian Malm, CPO at redBUX

The team at me.mento claims to have technology that allows them to create photorealistic 3D avatars of real people. It is unclear if the avatars will really be photorealistic upon release or decent to good quality 3D renders as seen in the white paper. They rely on 3rd party VR/AR headsets like Oculus or the upcoming Magic Leap and auxiliary tools like haptic response equipment to allow their users to experience their virtual world.

They also mention that avatars will be artificially intelligent but do not discuss where progress is at on this front. They will likely need to develop this capability in-house, they’ll also need to find a way to capture the real person’s personality and impart it to their avatar to provide a great user experience.

The blockchain technology allows for a seamless payment ecosystem between all the stakeholders of vrXcity, including consumers, adult stars, advertisers and 3rd party content generators. Simple purchases and other transactions are easy to verify, validate and implement regardless of where users are located.

“Germany is really strict when it comes to payment online, we had to have valuable steps behind so that the overall experience is much better for the user, especially in the VR experience where you cannot just put your credit card, it would ruin the experience”
 — Sebastian Malm, CPO at redBUX

While it is understandable that me.mento would focus their efforts on developing the virtual world itself rather than on building the complex VR hardware, it should be noted that this could make it challenging to offer a seamless user experience due to the numerous VR solutions out there, all of which could introduce slight variations to the user experience.

The ICO

Their ICO is currently underway. The pre-sale began on March 22nd and finishes April 15th. During this time the company is offering a 35% bonus to redBUX purchasers. The estimated price will be €0.01 minus the 35% discount. The main sale will take place starting on April 16th and will continue until May 15th. The minimum purchase requires is €100 worth of redBUX tokens.

Me.mento will issue 13B redBUX out of a hard-capped 20B supply. Unsold redBUX tokens will be burnt after the token sale. The white paper explains they are raising €130M, €39M (3.9B redBUX) coming from the pre-sale and €91M (9.1B redBUX) from the main sale. You can purchase the tokens with either Fiat currency (Euro and USD) or with cryptocurrencies (ETH, BTC, BCH & LTC) here. Citizens of all countries can participate in the sale, except those in the US, China, Singapore, South Korea, Vietnam, Iran, North Korea, Syria, Sudan & Cuba.

The following pie chart shows how the token supply will be distributed:

Figure 3. redBUX Token Distribution

Image Caption: Image found on page 14 of redBUX white paper found here

As of March 26th, 2018, they have sold 2,020,286,982 tokens of the 3.9B they are offering, or around 52% of the pre-sale total.

Application of Funds: The funds from the ICO will be used to finish the vrXcity prototype, complete internal product testing and then private & open beta testing. Following beta tester feedback the product will be prepped for a full launch with MVP level features including 3D avatars of over 900 adult stars, and the ability to enjoy peepshows, lapdances, stripshows and interactive VR sex. However, other features like access to digital shops, multi user features like group sex, the ability to scan yourself into the virtual world and interactive hardware for more immersive experiences won’t be available until almost 2020. See below for a breakdown of the use of funds and for the features to be released upon initial launch.

Figure 4. Use of Funds

Image Caption: Image found on Pg 16 of redBUX white paper found here

Figure 5. Features to be Released Before 2020

Image Caption: Pg 18 of redBUX white paper found here

Traction

Based on the white paper, the team is near completing an alpha version of vrXcity and should begin testing shortly. They expect to complete alpha and beta testing in time for a summer 2018 release of the product. This product requires massive amounts of development work so this is an impressive feat in and of itself. It is unclear how the team is incorporating artificial intelligence into the first version of the product, if at all. The white paper could have done more to explain this part of the product.

The team has demonstrated very impressive progress in establishing licensing agreements with over 900 adult film actors, including stars like Texas Patti (238K facebook followers) and Jessica Drake (275k Instagram followers). They also have agreements in place with 7,000+ camgirls, 150+ retail stores which will advertise their products in vrXcity and receive social pushes from 100+ partner websites which boast massive audiences.

Team

Me.mento has a strong founding team with the necessary business and technical experience to deliver the virtual reality product. The only unclear capability surrounding the me.mento team is if they will be able to build the artificial intelligence talent to create avatars that can provide a good user experience through human like interactions.

Tobias Platte, me.mento’s CEO, has led marketing at a Deutsche Bank, ran an international advertising agency as well as several startup companies. Sebastian Malm is the company’s Chief Product Officer, he has deep experience in game design and user experience, this experience will be a great asset to me.mento in developing an unforgettable virtual world experience. The team is growing quickly, with 14 team members in R&D, 4 in concept & game design, 12 in animation, 21 in character art and 9 more developing vrXcity’s virtual environment.

They have strong advisors in place to help facilitate the partnerships and agreements they will need to build up a sufficient content base for a good launch. Examples of strong strategic advisors include Steve Orenstein, founder of Wicked Pictures and blockchain experts like Till Von Ahnen and Andreas Rayo Kniep.

Conclusion

Compared to many ICOs out there, this product is one of the easiest to imagine having a very strong demand if executed correctly. It almost doesn’t require explanation, people inherently understand how big a product like this could be simply based on how large the pornography industry is and how much the experience could be improved by making it interactive. Future features like being able to create avatars of significant others is also very interesting and could lead to significant changes to relationships as we now experience them.

There is some ambiguity around the technical progress of the project, particularly around the artificial intelligence claims found in the white paper. It could be the case they are contracting out this part of the product, that the white paper was simply unclear or that the AI components of vrXcity won’t be released in the initial product. A strong user experience will be a must for them to win over customers. The bar for quality is high, if the team is unable to provide realistic looking avatars, or enjoyable human like interactions with those avatars, adoption may be capped to a group of early adopters.

The team has demonstrated very strong traction in aligning themselves with some of the biggest companies in the industry, getting licensing agreements in place with over 900 adult stars and over 7,000 webcam girls. The potential marketing push from partners like Wicked Pictures and the adult stars & camgirls who are incentivized to bring users to the platform is likely to make this project successful, given they can release a compelling product.

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