01
introduction
In the first half of the year, STEPN became a phenomenal project in the industry with the deep support of Binance and Sequoia Capital. In 2020, the rapid development of DeFi and NFT provided a catalyst for the P2E model. With the popularity of AXIE last year, P2E entered the public eye.
Now that Binance and Sequoia Capital have joined hands again, will HOOKed become a super project in the second half of the year? Hooked Protocol aims to build an entry point for Web3, providing users and enterprises with a tailored Learn&Earn product experience and infrastructure to enter the Web3 world.
This report will start from the overall multifaceted nature of HOOKed and conduct an in-depth analysis of the sustainability, totality and potential risk points of its projects, thus providing a reference for the evaluation of the projects.
02
Core Viewpoint
With the previous case of STEPN, and still led by Binance and Sequoia Capital, it is likely to be a hot project in the second half of the year. This is mainly due to three reasons: (1) top endorsements, including Binance and Sequoia; (2) fast project advancement and strong development and delivery capabilities; (3) capital operation methods, data, and publicity. We can see the presence of Lin Capital, but the product itself is not important.
Hooked adopts a dual token model. Hooked adopts a dual token model: governance token HOOK and utility token HGT (Hooked Gold Token). HOOK is mainly used for community governance and on-chain transaction gas fees. Holding incentives include access to exclusive community events and the opportunity to purchase limited edition NFTs on the platform. 20% of the total supply of HOOK is allocated to the team and advisors, 30% is reserved for the ecosystem, 25% is allocated to the community, 5% is sold through Binance Launchpad, and 5% is used for private placement.
In addition to a good economic model design, hooked also has many key designs to ensure that incentives are effective and to avoid economic system collapse. For example, the game diversity below the platform is simple to play: 1) Quiz-to-Earn: Users can get immersive Web3 learning from the beginning, and get the first Token reward by answering the quiz correctly. 2) PoWT (Proof of Work and Time) Mining Game: The game uses the classic proof of work mechanism to motivate users to contribute energy and time within the platform. 3) Social recommendation: Users only need to share and build their Web3 social graph to get generous Token rewards. 4) Stake and Swap: Users can have their first crypto wallet and store crypto assets, and use Hooked Wallet for Staking, Swap and transfer transactions.
Of course, the project also has some risks: 1) The project was rushed: HOOK's official website was launched on the 21st, the white paper was uploaded on the 22nd, and then the IEO was launched on the 23rd. It was so hasty that it felt like a completely re-skinned project. Seeing that BNB has risen, we can ignore the quality of the project. After all, Stepn's users are all real money recharges, and 99% of hook's users are estimated to be robots that are trying to get free money; 2) Data fraud: Although hook's founding team has only four people, the data is all fake. Twitter has only been registered for more than a month, and there is no live person on Discord. However, the number of downloads on the Google Market exceeds 1 million, and the number of active users exceeds 2 million. Are these data too fake? 3) The product itself is not perfect at present. We see more of Binance's signboard, and the early fomo sentiment is a bit serious.
03
Project Overview
Hooked Protocol aims to build an entry point for Web3, providing users and enterprises with a tailored Learn&Earn product experience and infrastructure to enter the Web3 world. Hooked has launched a product called Wild Cash in Indonesia and Brazil, which currently has more than 2 million monthly active users. The application is equipped with gamified learning features and has achieved exponential growth through its built-in social recommendation mechanism.
3.1 Team Information
Jason Y is the CEO of Hooked Protocol. He has worked at Uber and Meta (formerly Facebook), has been engaged in consumer Internet and strategic growth for more than 10 years, has created many products, and has experience in operating web2 users with over 100 million users. According to A&T Capital, the Hooked Protocol team members come from the text growth platform Midu (under China Literature Group), which was once invested by Tencent. The core team has rich 2C market promotion experience and strong product capabilities.
In Jason Y's LinkedIn, he hid his work from 2018 to 2022, but according to multiple media reports, Midu's CEO Yang Ji worked at Facebook and Uber the same time as Jason, and there were rumors in October this year that Yang Ji had left Midu. Jess L is the chief marketing officer and has worked at Uber and Google. According to LinkedIn information, the two were colleagues at Uber.
3.2 Financing
Web3 social network Hooked Protocol has completed its seed round of financing. Investors include Binance Labs, Sequoia Seed Fund and A&T Capital. The amount of financing was not disclosed.
It is reported that Hooked Protocol aims to build a community-driven social network with a token economics design, where users can get a gamified experience. The team is currently integrating wallets and DIDs. Hooked Protocol will first be launched on BNB Chain and will be expanded to other Layer 1 blockchains in the future.
Why did Binance invest in Hooked Protocol?
1 ► Binance Investment Logic (Interview Content)
1. The application layer may be the main theme of the next cycle, and customer acquisition will be an extremely important part
Application layer trends: Looking back over the past year and a half, although they have not been able to gain a long-term foothold, application products such as Axie and Stepn have had a strong out-of-circle effect in a short period of time; if we look at the next crypto cycle, combined with the fact that the infrastructure has attracted a huge amount of funds and is becoming more and more perfect, the next cycle is expected to see more applications adopted by the mainstream population.
Customer acquisition is the key: In a market full of new application products built on the new underlying layer of blockchain, how to acquire customers is bound to be a problem that every application must consider and solve.
2. The Hooked team is highly capable, and Binance’s ecosystem is lacking in customer acquisition, so the success rate of the cooperation between the two parties is high
Hooked team: The core team has rich 2C marketing experience and strong product capabilities, which will enhance the quality of Hooked;
Lack of Binance ecosystem: In the current Binance ecosystem, neither Binance Exchange nor the BSC chain ecosystem has a mature Learn & Earn product. Such products are bound to be urgently needed by Binance during the application cycle, and it is likely to be a win-win situation for Binance and Hooked.
1. More and more attempts at the application layer and higher product strength
Compared with the cycle in 2017, the proportion of application projects in the cycle started in 2020 has increased significantly, and there are a large number of out-of-circle cases, e.g. NBA Top Shot, Axie, Stepn, Yuga Labs.
Compared with CryptoKitties, Axie and Stepn have obvious innovations in their models, and the completeness and usability of their products have been greatly improved.
3 ► Business Overview
1. Development stage:
Phase 1: Single product platform: The goal of Hooked’s first phase is to first establish a crowdsourcing application with a built-in incentive mechanism. Through the combination of entertainment applications with gamified experience and incentives, it will guide non-circle users to smoothly enter Web3 and divert traffic to Web3 applications.
Learn & Earn task example: Integrate key concepts of cryptocurrency such as staking & claiming, NFT minting into casual games. Users complete game content on the one hand, and answer questions on the other hand, and participate every day to earn rewards;
Phase 2: X-to-Earn Aggregator: As more and more users participate and receive education on the Hooked platform, other types of x-to-earn are also willing to cooperate with Hooked to further expand Hooked's user base. Eventually, the platform will be able to guide these users to other web3 projects, including exchanges, Gamefi, NFT, DAO, etc.
04
Token Economics
The Hooked protocol adopts a dual-currency model, in which the HOOK token is the governance token in the Hooked protocol that reflects the value of the ecosystem, and HGT (Hooked Gold Token) is the only utility token in the ecosystem, which is used to dynamically incentivize the community to make continuous contributions.
4.1 Main Currency HOOK
HOOK tokens are mainly used for community governance, gas for on-chain economic activities within the protocol, staking incentives, social elements, and longer-term goals. Its governance rights are reflected in the rights and votes in the Hooked ecosystem proposals, and behaviors that are beneficial to the platform will receive initial airdrops.
The social element is reflected in the fact that HOOK tokens have the privilege of purchasing limited edition NFTs (game tools, secret boxes, etc.) within the Hooked protocol and accessing exclusive community activities. The platform promises that the token income obtained in this part will be destroyed. The overall economic model is similar to the StepN model.
Additionally, HOOK tokens will be invested in innovative practices that benefit the ecosystem of individual participants and businesses as a whole, ensuring substantial liquidity and token value that grows in direct proportion to the value of the entire community.
HOOK tokens are based on the BNB chain, with a total supply of 500 million.
20% of the total will be used for private placement, 20% for the team, 30% for the ecosystem and treasury, 25% for the community, and 5% for the bAn Launchpad. The private placement price is 0.06-0.12 USD, and the bAn Launchpad price is 0.1 USD, which means a valuation of 50 million USD.
The initial circulation of HOOK tokens is 50 million, and the circulation will be 19.16% after one year, until it is fully released in 2029.
According to the launchpad price of B-An, the initial circulation market value of HOOK tokens after listing is 5 million US dollars, and the total circulation market value is 50 million US dollars. According to CoinMarketCap data, the total circulation market value ranks around 320th in the entire network.
4.2 Sub-coin HGT
There is no upper limit on the issuance of HGT tokens, and the number of HGT tokens issued depends on the amount of money earned by users completing in-app tasks. The only way to produce HGT tokens is for users to complete in-app tasks. Specifically, they can earn coins by answering questions, earning coins by inviting others, and POWT mining, etc., which motivates users to experience Web3 in the game.
HGT tokens earned through various in-app tasks and behaviors can be unlocked and converted to uHGT (unlocked HGT tokens). HGT tokens themselves are not liquid and tradable, so the uHGT mechanism is used to manage the liquidity of HGT. uHGT uses a community-driven and algorithmically adjusted unlocking mechanism to ensure a sustainable model, adjusting the reward amount, frequency, and unlocking cap based on user participation proof and community contribution, in order to reduce the speculative risk of reputation and value when token prices fluctuate.
The HGT consumption mechanism is to purchase NFTs in the app, enhance the gaming experience, and unlock advanced rewards. The earned HGT tokens can also be converted to HOOK tokens. The current uHGT token price is 0.00000065 USD, and the amount of USDT in the liquidity pool is 9900.
05
Key design for sustainable development
Combining the above streamlined and fun gamified learning concepts, Hooked Protocol created its first Dapp, Wild Cash. Wild Cash is a multi-functional learning and earning DApp that combines the Quiz-to-Earn mechanism, various interesting in-app rewards, and a built-in wallet and user digital identity.
5.1. How to earn coins
Currently, there are three ways to earn coins in Wild Cash: answer questions, invite, POWT, and pledge. The tokens earned by users are Gold, which can only be used within the application and can be used to upgrade in-game items (more efficient mining hoes, mine carts, etc.).
5.2. Earn coins by answering questions
The quiz earning coin activity is divided into prize quiz and quiz training camp. In both activities, users have the opportunity to receive Gold token rewards.
Users can first participate in the prize quiz to understand the answering scenario, familiarize themselves with the question bank content, and prepare for the special question-answering session. The prize quiz has two modes: one is to share 500 million Gold tokens within a limited time, and the other is to share 1 billion Gold tokens within a limited time. Users can participate in any event from the first answering time to 24:00 on the same day.
The way to participate is to answer questions at a fixed time, and the token rewards will be issued every other day. There are 10 questions in each guessing event. If the user answers the question incorrectly or fails to answer the question within the specified time, it will be considered a failure. You can use the resurrection card to revive. There are 3 resurrection opportunities per day for each event. Every time a user successfully invites others to download and register the Wild Cash app, the user can get 5 resurrection cards as a reward. There is no upper limit on the number of resurrection cards.
The Q&A training camp has 3 training areas, each with different difficulty and token rewards. The question bank consists of 10 basic questions related to the cryptocurrency circle, and the answer time for each question is 60 seconds. If the user answers 10 questions correctly, there will be 1 chance to get the Gold token reward. If all 10 questions are not answered correctly, the question will be answered in a loop until all 10 questions are answered correctly. If you quit midway, you will lose the reward.
The Q&A training camp will set the number of questions that users can answer every day based on their historical accuracy rate. The higher the accuracy rate, the more questions you can answer, and the more rewards you will get. According to PANews tests, you can get 1,100-1,800 Gold tokens for each quiz.
5.3. Invite to earn coins
Users can copy their personal link in the invitation earning interface to invite friends to participate. Successfully inviting a single user can get 5,000 Gold tokens. At the same time, a ladder of invitation rewards is set. The first successful invitation can get 30,000 Gold rewards, and successfully inviting 3 people can get 31,000 Gold rewards, and so on.
When the user you invite starts mining, you will receive 5% of the mining reward of the invitee. This reward is a platform reward, and the mining reward of the invitee will not be reduced. In the invitation interface, you can click the corresponding button to remind the invitee to participate in mining, and you can remind them once every 24 hours.
5.4. POWT Mining
POWT refers to Proof of Work Time mining, which simulates Bitcoin mining. Users can mine a limited amount of Gold tokens through in-app functions (such as token mining games), thereby cultivating and enhancing the daily Web3 experience of Hooked users.
The default mining efficiency of the application is to mine 1 gold per second, the mining time is 1 hour, and the upper limit of a single account is 10,000 gold per 24 hours. Users can improve mining efficiency by clicking the Tap button, or cast a hoe with higher mining efficiency. The casting price of a hoe with a 2HGT/s efficiency is 9,600 gold, and the casting price of a hoe with a 3/s efficiency is 19,800 gold. At the same time, the capacity of the mine cart can be increased to increase the amount of gold that can be mined per day. The casting price of a 16,000/24h mine cart is 36,000 gold, and the casting price of a 33,000/24h mine cart is 68,000 gold.
According to the system settings, the first priority is to upgrade the mining efficiency and mining car capacity to maximize the daily coin production.
The mining efficiency of the hoe upgraded to level 3 is 3/s. You can get 10,800 coins by mining at normal speed for 1 hour. At this time, the capacity of the level 1 minecart is sufficient. If the user clicks the screen to increase the mining efficiency, you need to buy a level 2 minecart. Therefore, after starting mining, you can upgrade the hoe first, and then continue to upgrade the hoe to level 3 after the next 24 hours, and then upgrade the minecart capacity after the second 24 hours. After the third 24 hours, upgrade the hoe. This efficiency is currently in the form of a blind box, so the subsequent operations depend on the efficiency of the hoe.
5.5. Earn Coins by Staking
HGT earned through the above methods can be used to earn more tokens through staking, with an annualized return of 20%. The staked tokens can be deposited and withdrawn at any time. When the earned Gold reaches 800,000, users can exchange it for uHGT in the app, and then exchange it for BUSD. According to the Wild Cash app, the exchange ratio of Gold and uHGT is 1:1. According to the current secondary market price of uHGT, 800,000 Gold tokens are worth 5 US dollars.
06
Conclusion
In summary, from the product experience, the application is highly complete. The official has also reduced the risk of sub-coin HGT being minted by robots in batches through the answering rules. In addition, the limited-time and limited-quantity purchase of tools to improve mining efficiency has slowed down the mining output speed, requiring users to spend more time and energy to participate. However, the invitation reward mechanism has huge loopholes, which can be completed by witch attacks at zero cost, and the current economic ecological cycle path within the application is extremely single, and demand cannot meet supply. This model will lead to the HGT token price having no support value in the short term. It is necessary to observe whether Hooked officials will improve the invitation mechanism and build a richer economic cycle within the ecosystem.
From the perspective of the economic model, the circulation of the parent coin HOOK was extremely low in the early stage, and the total circulation market value was only 50 million US dollars, which may be for the purpose of market makers to achieve strong control. In addition, Hooked officials once held a Halloween event and issued more than 40,000 Hooked Party Passes (in the form of SBT, non-transferable) to the community. According to official information, the Pass card can be regarded as an early user certificate. If the official attracts market attention by airdropping HOOK tokens to the Pass card, there will be a large number of zero-cost tokens sold in the short term, so it is necessary to pay close attention to official information.
From the perspective of ecological needs, in the current Binance ecosystem, except for Stepn, which caused short-term FOMO and made the economic activities on the BNB chain extremely active, there are no other similar phenomenal products. The Hooked protocol has the potential to attract more users to the BNB chain. But this depends on the economic cycle within the Hooked protocol being diverse enough, otherwise there will be another period of silence after the FOMO sentiment.
Finally, Lin Jiujiu reminded:
1. The wild gold farming effect of hooked is not obvious, and it is more infrastructure-oriented, which has limited appeal to users in the circle. If you want to go out of the circle and capture the traffic effect outside the circle, the demand for wild to make money is not strong enough. In the short term, it is more of a speculative game for the name of Binance, rather than recognition of the hooked product itself.
2. IEO hard cap is 2.5 million USD, and 10% is circulated at the opening. It is estimated that it is not a problem to reach 2-5U at the opening of 20-50 times, corresponding to a circulating market value of 50 million-125 million. If it can rise sharply and then fall back to below 20 times, I will consider it again. Otherwise, I will continue to buy the bottom of OP, IMX and the like (public chains of 100-200 million or 2nd layer). At present, I have not seen enough things in hooked, more of which are vision and Binance brand.
3. The last launched pad project was stepn, which was launched again after 9 months. It is estimated that many people will choose to charge on hooked because they missed stepn. The surge of gmt by 20 or 30 times after the decline is due to stepn, a gamefi with strong gold-making ability. The out-of-circle effect and wealth-making effect are directly maximized. This time hooked is more infrastructure-oriented. Be cautious about fomo and don't accept chips that are too expensive.
Let us wait and see whether Hooked can take advantage of Binance IEO to lead the next wave of Web3 trend.
