We, Lykke Business AG, are a blockchain engineering company based in Switzerland. We have 30 core experts, and we scale up to 100 or more people depending on the project. We are part of a wider Lykke ecosystem but very independent. And within the ecosystem, we have digital assets solutions, a crypto exchange, and market-making. We have been in the market for more than five years. We were one of the earlier pioneers in the market when the blockchain hype started in general. We are focused on developing enterprise blockchain-based solutions. But we can also combine on-chain and off-chain technology and offer off-the-shelf solutions for different blockchain use cases.
Use Case: Tokenization of Equity Share for a Swiss Banking GRoup
In Switzerland, there are not a lot of jurisdictions where a bank can do equity share tokenization due to regulatory restrictions.
This bank wants to give its SME clients a better entrance to the finance market. On one side, you have the SME client. Our bank’s client is the issuer, and this issuer creates the documents required to make the tokens that represent their shares. At the same time, the investor goes through a KYC onboarding process, either by our platform or the bank. Then, the investor provides payment for this token to the bank or payment provider. Then the security tokens are placed in escrow, and the smart contract gets executed. The smart contract manages delivery and payment, and the tokens are distributed to the investor. The payment provider, the bank itself, disperses the investments to the issuer, to the SME client at the end of the day. This is completely based on a blockchain using smart contracts. In this case, you don’t need any intermediary or central security deposit. The entire process of delivery to payment is automated by the creation of smart contracts. The company documentation guarantees the link between the equity and the token.
Use Case: Token rewards for real estate conglomerate.
In 2019, after two years of development, we developed a solution for a big conglomerate to build their token reward ecosystem to displace all the legacy systems they have in place. The real estate conglomerate consisted of malls, different real estate buildings in the Middle East, entertainment community management hotels and leisure, and attractions like aquariums. Based on blockchain, we have built an incentive-driven ecosystem where. We have also developed a front-end application to earn, store and burn the loyalty tokens in one place, along with the ability to exchange these loyalty tokens against each other within the community. Considering the regulatory aspect, they can sell loyalty tokens, for example, cryptocurrency and fiat currency.
There are different advantages to having blockchain, with one of the main criteria being that the data is secure.
Use Case: Tokenized Ecosystem – Retail Conglomerate
Let us look at the challenges for retail conglomerates and what they want to address. They wanted to have a blockchain-based system, which doesn’t necessarily have to displace all the legacy systems, but complement whatever they have and replace just where they had different problems or challenges. It was very important that they have a real-time settlement of the talking points. They wanted to give the clients the flexibility to send points to family and friends and get earning potential for referrals when other clients signed up through a friend to this ecosystem. They wanted to combine specific exclusive offers and events, not only from themselves but also from their partners. The benefit of this use case for our client was instant settlement and protection with no batch processing. Previously the problem for the client was delays with batch processing. In the long run, they wanted to use the new technology to save cost and increase the performance of the number of transactions per second, which was very low with the previous system. They wanted to strengthen fraud prevention in the system. They wanted to use smart contracts to automate the whole process within the ecosystem when earning and burning these tokens. It was also important to potentially integrate APIs with other loyalty point networks. This is not only a closed loop for the ecosystem but opens up to other systems and networks in general. They saw three main benefits for their business partners; they have a full-service portal to manage campaigns and control them but can also easily onboard their partners into the platform ecosystem. Using data analytics, they got insights into customer behaviors and transactions, which could be used to cross o other products or services.
Last but not least, what is the benefit for the end-user and customers of our clients? They wanted to give the opportunity to their clients to use gamification to increase the engagement and the usage of the token reward system and the ability to transfer tokens easily between parties.; potentially for users to own and earn points if they want; open up to the crypto world, and give their clients access to crypto-financial assets for investments; last but not least, the ability to add profiles per account. For example, if you have a family of five or six, you can add different household members.
Use Case: NFT Marketplace.
We have developed this platform, and you can leverage what we have already developed. What is not there can still be developed, in addition. We saw three key areas at the moment in the NFT space. First of all, IP music rights, where we will be going live in the market soon. Secondly, helping clients in realizing their marketplace for art and collectibles. And then gaming is a big topic. Gaming in 2021 had a trading volume of 5 billion US dollars, which is 30% of the whole NFT market. NFT for gaming has quite a big stake in the whole NFT market. Interestingly, if you look, the global gaming market is around 180 billion. The NFTs for gaming are already at 2%. But there’s so much more potential in general.
Why is NFT good for gaming – To monetize memories and emotions and develop a community. Everything is about community. You can generate trading fee revenue by enabling the trade of NFTs. For example, you can attach tokenized memorable moments like medals or screenshots, or you can tokenize items belonging to your favorite player or your favorite Club. You can also get fee revenue from NFT trading, both primary and secondary. This can be done automatically by the use of smart contracts. What is important is the appreciation of value over time on NFTS; there’s an expectation that it’s an investment or can be an investment. And then, for the public and the community’s benefit, it’s around marketing and being one of the early adopters to develop a community around the market.
Mix assets with other metaverses and NFT markets to expand the community. For example, art or collectibles you bought elsewhere can be transferred as collectibles between different games or metaverses or given as a gift token.
I think there are some risks to be aware of that should be avoided as a company when you want to go into that space. The goal of your innovation, where you enter, is to trick your gaming players into spending more money. Ensure that there’s tangible value for the community players, creators, and token owners. Blockchain enables all these sharing and trading proceeds. Blockchain unlocks the ability to have complex player-owned economies and multiplayer games. You can use blockchain technology to enable p2p transactions. It creates direct ownership.
Unofficial gaming markets do exist. Blockchain would make them safe and regulated and generate trading fee revenue. All objects and subjects could be tokenized. You want to allow token holders to vote on game development as a community to strengthen the community and increase involvement. One of the big purposes of the blockchain community is that you can vote and be part of the development – The ability to enable decentralized community-driven gameplay innovations when game rules are unchained and execution is decentralized.
Connecting to the metaverse industries gives us the opportunity to pay with cryptocurrencies to integrate with public blockchains. You can list these tokens on exchanges; you can connect to Metaverse. You can enable the community to innovate on-chain gameplay and vote on that. And last but not least, digital custody enables the service as a provider to keep the private keys and the digital assets safe.