Cyrus Taghehchian, co founder of Splyt
Splyt is a well-funded ecosystem with $2.2million raised in a private sale. While that figure in and of itself is impressive, what is more impressive is that the founders turned down a further $350 million from people wishing to buy more tokens. Stop the lights, what happened there? In the world where millions can be shaken from the trees, these founders said they had enough already. In what parallel universe have we landed? Ladies and Gentlemen, Splyt is the name and you are very welcome indeed.
Co-founder Cyrus says very simply that $2.2 million was enough and that they were staying within their means.
“If we took in more money, things would have been more complex. We had enough money to build our project. Moreover, we built it as a non-profit. We see Splyt evolving. We believe in decentralized governance and we intend this platform to become a social utility for society. We raised over two million and that was all we needed to get to this point.”
This stance is even more unusual given Cyrus’ background which includes a stint at corporate consultancy firm Deloitte as well as setting up his own successful consulting business. In fact, part of that experience of working for a large consulting firm taught him three things. The first was the realisation of the friction between maximizing profits and doing the right thing.
“Part of fulfilment is doing things for others, for giving not just receiving. So, a successful company for me looks after the value in all the community.”
“How to make a powerpoint.”
Actually, that second point is an actual thing. The experience of working at Deloitte taught him the value of story. How to create an easy to digest storyboard in a few slides.
“It’s been one of the most effective tools I’ve taken away from Deloitte.”
While at Deloitte, Cyrus managed one project that included 2000 people. He also quickly recognized that quality assurance is as critical for large enterprise projects as for startups.
“That’s the third learning I took away – how to be agile. I strive always to bring efficiencies into software delivery, how to shorten cycle times to get product out there faster with the highest quality.”
At this point I should add that Cyrus is also an Ethereum Magician but no, that does not involve magic tricks or bunny rabbits and hats; there are no tricks that cannot be shared on pain of death. He is instead part of a cohort of individuals dedicated to the betterment of the protocol through cooperation.
“In some ways it is a little bit of magic.”
Anyway, back to Splyt which Cyrus describes as a better way of doing Amazon’s marketplace. The peer to peer marketplace on Amazon accounts for $250 billion worth of revenue and these are not Amazon products. In fact, some $175 billion of that revenue comes from third party seller fees who are selling under the Amazon brand.
“In fact, Amazon picks ups between 40 and 60% of seller profits and it’s very difficult for sellers to create a sustainable business. Also this is not transparent – the actual fees are hidden so no one knows what deals are being done.”
Cyrus’ view is to decentralise the entire ecommerce supply chain. It is all transparent and anyone can pull inventory from the shared global catalogue. The stock is then displayed on the affiliate site and once the item is sold, the seller drop-ships it to the purchaser, and the smart contracts within the eNFT release agreed profits to both seller and brand. There are no fees as the site is set up for not for profit.
“It’s on blockchain, it’s open source. Anyone could copy what we have done and compete on price – except we don’t charge.”
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Splyt removes the Amazon function, ie the centralized aggregator of inventory, creating instead a decentralized sharing of inventory on the blockchain. Blockchain provides the security and removes the need for trust.
They could charge a small percentage for transactions, but as the technology will be open-sourced, eventually somebody will undercut that.
“We’ve removed the game theory that drives everything to zero, but that does not mean people can’t make profits. We are about adding value not maximizing profits. Our own model is based on something like Mozilla FireFox, a non-profit linux project where everything is open and free but profits are made on other items like education or consultancy.”
Now enter the NFTs or non-fungible tokens which Cyrus describes as programmable data.
“NFTS are programmable data which can be programmed in such a way to be secure. It’s great that there is this current hype around NFTs as art, but it’s much more than that.”
NFTs in Cyrus’ world are data sets that are secure, transparent and safe – like stock in the universal catalogue. Each time a product is uploaded to splyt, an eNFT is minted and assigned to it, which is then made available to retailers and affiliates in the ecosystem. He was investigating their use before CryptoKitties were invented, before the term NFT was popularized and indeed tended to use the term “tokenised asset” back in 2017.
In fact, when Cyrus first encountered Bitcoin in 2014, he understood the power behind eliminating digital double spend through technology. The next learning point for him was in 2017 when he was figuring out how NFTs might work – and thereby reduce the double sell issues.
“This is much cheaper than other methods of posting stock – one push and your NFT is available everywhere. A blockchain is a public ledger or database and that is how we make it work.”
When a seller creates their eNFT (e-commerce NFT), they are asked a number of questions including quantity available, recommended retail price, and the bounty or commission paid to the end retailer. The retailer looks at the list of products, checks out the price and commission and selects items for their store. This also eliminates counterparty risk as sales generated from an affiliate are recorded and cannot be ignored; it is all tracked on the blockchain.
The blockchain then uses smart contracts to create escrow accounts which holds funds until the item is delivered and which then release the funds. The smart contract automatically releases the correct percentage to the retailer and original seller.
Purchasing can be done with crypto and currently Cyrus is looking at integrating a credit card fiat gateway.
“Handling traditional payment methods is important. For newcomers to this space tackling wallets and private keys can be daunting – we want people to benefit now without having to understand crypto.
“We are intentionally backwards compatible with web 2.0. We have a web 2.0 interface for the majority of the web population with a web 3.0 backend. We’re the marketplace of marketplaces.”
Using NFTs and smart logic also allows Splyt to minimise the number of parties in any given transaction. The NFT cannot be stolen; it will only share data with the confirmed parties. This protects everyone.
So the platform token, how does this fit in?
Again Cyrus uses real life examples to explain his project. Craig’s list is free but full of unregulated people and possible scams. Amazon and eBay offer better security but cost an arm and a leg. Splyt aims to bridge those worlds.
Sellers are requested to deposit the token, TCR, proportionate to the cost of the items. If the transaction is successful, then the token is returned. This makes for manners on sellers, while scammers may lose their money. It also profits sellers as the more tokens they hold, the more items they can sell.
While an Ethereum man (magician) at heart, Cyrus has opted to run Splyt on the PolkaDot blockchain as it better suits ecommerce. Cyrus sees PolkaDot as Ethereum with built-in sharding.
In terms of roadmaps, this year the intention is to build clients so anyone on Shopify or WooCommerce can download an app and be integrated into Splyt, the decentralized ecommerce network. As the project is open source, he is letting others build clients or apps on top of Splyt. PolkaDot is not yet live so first on his list of priorities is creating interoperability between it and the EVM, or the Ethereum Virtual Machine. This is where the Ethereum magician enters the frame again, but I can’t tell you his secrets because otherwise I’d have to kill you. Only this is open source and so you can go read it for yourself.