The following is an objective review of the Virtue Poker ICO. The review is based on certain criteria, which we think are important for an ICO project to succeed. We measure a successful ICO by short and long term ROI estimation.
The following is not financial advice.
Virtue Poker, founded in 2015 by Ryan Gittleson, is a decentralized online poker platform. The project soon incubated into ConsenSys, which is a respected and well known company in the crypto sphere, building decentralized apps.
Virtue Poker is trying to solve the major trust issues with the current online poker industry, which is currently valued at 2.5B USD, and expected to grow to 5B USD by 2021.
Since the invention of smart contracts, we have had the ability to transfer value to an escrow wallet on the blockchain, with its own set of rules that are transparent to all. That means we don’t have to trust a third party to hold our funds any more.
Virtue Poker is a first mover in trying to accomplish the mission of providing a fully decentralized poker platform built on-top of the Ethereum blockchain, IPFS, U-port identity verifier and more.
Virtue Poker is to launch a fair ICO. 20% of the tokens are given away for 12.5M USD, 0% Bonus to all rounds. Main-net is to launch around Nov-2018. There is an option of another sale round 28 days prior to the launch of the main-net.
Let's get on with our evaluation!
The Virtue Poker project is a project out of ConsenSys.
ConsenSys is a venture production studio building decentralized applications, primarily focused on the Ethereum blockchain.
Ryan Gittleson, Founder, Head of Business Development and Marketing:
Before working on Virtue Poker (Since 2015), he worked as the Head of Customer Acquisition for a New York based startup, TodayTix, a Broadway ticketing mobile app. There he oversaw the growth in its user base from 150,000 to 700,000.
Jim Berry, Lead Platform Developer:
Software developer for the past 30 years for projects like the Hubble Space Telescope ground system, Framingham Heart Study and Linux drivers. He also worked on computer games for companies like MicroProses, Looking Glass and Electronic Arts.
Javier Franco Algarrada, Platform Developer:
Javier is a senior software engineer with 10+ years of experience. He has been working for more than 5 years in gambling across different products like lottery, virtual sports, casino games and sportsbook. He holds a bachelor degree in computer science and a master's degree in web engineering from Malaga University.
Jose Luis Diaz, Gambling Technology & Product Strategy:
Joseph has been working on Ethereum and more recently ConsenSys since Jan 2014.
He holds a degree in Electrical Engineering and Computer Science from Princeton.
Andrew Keys:Head of global business development at ConsenSys and previously worked for UBS investment bank in equities analysis.
Andrew drives strategic technological partnerships, business development and communications for ConsenSys and co-founded ConsenSys Enterprise, to create Ethereum blockchain solutions for Fortune 500 clients.
Professional poker players
Ifrah Law PLLC, US Gaming Matters
Ifrah Law PLLC has presented iGaming clients since the inception of the industry. Their clients include Full Tilt and Poker Stars, for whom Jeff Ifrah negotiated a historic agreement in 2011 with the Department of Justice which paved the way for iGaming in the United States.
For all team members and advisory board, please visit the team's page.
Trust issues in the current online poker industry
In May 2008, Cereus Network (Ultimate Bet and Absolute Poker) admitted that a former employee gained access to an administrator's account that allowed him to view all player's cards on the platform. Over the several years that the fraud occurred, this individual and his co-conspirators stole approximately 20M USD.
With Virtue Poker: Cards are encrypted and only seen by the card holder
Full Tilt Ponzi Scheme
On Sept. 20, 2011, came the biggest Black Friday aftershock when the DOJ amended the Black Friday complaint to include allegations that Full Tilt Poker and its board members, had defrauded players, and that Full Tilt Poker "was not a legitimate poker company, but a global Ponzi scheme." The amendment detailed how Full Tilt Poker owed approximately $390 million to players worldwide, including about $150 million to American players, while having only about $60 million on hand in its accounts.
On August 2014, Full Tilt was acquired by Amaya Gaming Group (along with Poker Stars) and is currently one of the top online poker sites.
With Virtue Poker: The funds are always in the players’ wallet, except during a game when the funds are in an Ethereum smart contract wallet as an escrow.
Virtue Poker Platform
The team's goal is to address the shortfalls of the current poker industry in creating a new decentralized online poker network with trust, transparency, and accountability built in and transparent to all.
Special Platform components
Ethereum Smart Contracts
Ethereum contracts are utilized for several purposes:
- As a registry (lobby) for all active games on the platform
- As a short-term escrow service for players seated at a given table
- As a repository for all game-specific parameters such as buy-in amount, payout percentages and game type
- Reporting end game results
The game client will initially be a desktop application that is a state-engine that runs the game logic, shuffles and deals cards using a Mental Poker protocol, includes a light wallet, and connects to other players at a given poker table.
Mental Poker – Cut the third party for shuffling cards
In 1978, cryptographers Adi Shamir, Ron Rivest, and Leonard Adleman published a paper that proposed an encryption theme and communications protocol that allows two people in different locations to shuffle and deal virtual "cards" in a way that allows a game to be played without the need of a trusted third-party.
The Virtue team has spent the past two years exploring how to employ the mental poker techniques in its application in a practical way. Mental poker ensures the decks are unreadable to any single player by encrypting and shuffling the cards cooperatively in a way that lets each card be "opened" by one, some, or the entire group. The protocol uses communicate encryption: cards can be encrypted or decrypted in any order. For the basic algorithm- see page 19 in the whitepaper.
The p2p messaging backbone is utilized as a communication and synchronization tool to ensure the user interface for all players at a given table displays the identical game state.
IPFS, a distributed web project, will be used to log hand histories for all games played on the platform. Logs can be retrieved at a later point in time for review either for compliance or for our game security team.
Justice System- Virtue Poker platform node
The Virtue Poker platform acts as a POS (Proof of Stake) platform. The nodes in the Virtue Poker platform are called Justices.
Justices are non-playing peers, assigned to poker tables, who provide security and protection to players on the Virtue Poker network and in exchange receive fees from players (Platform fees). Justices are assigned to tables, and every few seconds, are randomly reassigned to another table. These validators sign each transaction for every hand on the platform and submitting hand histories for storage to IPFS.
Justice nodes provide the network with the following:
Dispute resolution: In the rare case of a dispute between two peers, a justice can resolve the dispute in real-time and award the winner the pot.
Data-feed: required by gaming regulatory bodies and ensured essential services such as collusion detection, bot detection, and multi accounting identification.
Partial storage of player's encryption key: Justices will store a decryption key for the players at the table. The "Dropped Player Problem" for Mental Poker is defined as when a player drops out of a hand prior to a hand being completed. This is problematic, as all players must share encryption keys for community cards to be revealed and for a hand to be completed. Using Shamir's Secret Sharing, each player's keys can be encrypted and split amongst all players plus the Justice. If the player drops, the justice can request the pieces from each player and decrypt the assembled pieces so that the hand can be completed.
All the above is done automatically by a user's computer that’s running a justice node.
A justice node can be activated by downloading the Justice client to a machine, opening the app and activating the Justice. The fees earned by the justice node (VPP/ETH) correlates to his stake of Virtue tokens (VPPs) locked in the justice registry.
User Flow In Virtue Poker
Virtue poker is a server-less application that will run without storing customer funds, and all players will be involved in card shuffling. The user flow can be described as follows:
Download Virtue poker client
A user will visit www.virtue.poker and download the client for Windows, Mac or Linux. The application is downloadable and includes a shuffler, game engine, and user interface.
Users will then be required to create a uPort identity (if they haven't already created one). The user will have to receive an attestation regarding country of residence and age prior to playing on Virtue Poker when required.
Fund a light wallet
The user will be brought to a page that directs them to fund the Light wallet that is pre-built into the client.
Create a Game or Join a Game
The user will have the option to create a private game where he or she can invite other players to join, or go to the lobby which will show all publicly available games via the Casino registry.
The user can join either a public or private game by sending ETH or VPP to the table address of the game they'd wish to join. The table or smart contract will sit on the Ethereum blockchain and acts as an escrow account while gameplay is conducted. Each game on Virtue Poker is represented by a table contract that has the custom parameters of the particular game.
The peers at the table will form a P2P subnet and will use a mental poker protocol that requires each individual peer to shuffle the deck of cards
When a tournament is completed, or when a player leaves the table for a cash game, the table contract will auto-execute and payout each individual player when winnings are due.
Virtue Poker token (VPP)
VPP has four utilities:
- Nodes (Justice system) incentive system: VPPs can be "locked" in a smart contract called the Justice Registry that enable users to stack tokens and validate hands on the network in exchange for fees
- In game currency: Can be used as in game currency but not along with ETH
- Access to special tournaments
- Can be earned as rake back
Much work has been done by the Virtue Poker core team since 2015, and further work is still to be done.
Completed to-date (2.5 years of progress by the core team):
A poker game can now be played on the Virtue poker software as a private game. Main milestones to be done are related to the main-net. Completed to-date: Gaming app front end, Mental poker integration, and Uport integration
May 22th 2018
Individuals who participate in the token sale will have exclusive access to the
Virtue Poker private Alpha beginning on May 22, 2018. Virtue Poker will be
deployed on a test network with test VPP (tVPP); players can use their tVPP to
compete to win prizes throughout the duration of the Alpha.Oct/Nov 2018
Main-Net LIVE, launch a Poker tournament. Tokens are transferrable.
Date: 25/4/2018, 13:00 UTC
Hard Cap: 12.5M USD
Total token supply: Only 10M tokens will ever be created
Token Allocation: 20% public sale phase 1, 20% public sale phase 2 (Optional), 20% token reserve (Locked until main-net launch), 18.8% Strategic Partnerships (Vested over 24 Months), 17.2% Founding team (locked in escrow and vested over 4 years), 4% Advisors (Vested over 24 Months).
Tokens are transferable once Main-net is live, around Oct/Nov 2018.
Whitelist: 6,000+ Approved Whitelist participants, No individual cap.
Team and Advisory
The team is a part of ConsenSys, which is a well-known and respected company in the crypto sphere, with great networking abilities. The legal advisory board is very experienced in the iGaming industry, obviously, legal challenges will arise along the way and top legal consultation is needed. The team is sponsored by top poker players which can help Virtue Poker to penetrate into the online poker industry.
Trust issues with big online poker companies
It seems that with the current structure of the top online gaming sites, we have no choice but to trust their word in keeping our funds safe and playing a fair game. Events like Full Tilt Ponzi scheme (2011), Lock Poker's use of player's funds (2015) and others are a great motivation to reconstruct the online gaming infrastructure. Virtue Poker is building a decentralized platform with maximum transparency.
With Virtue Poker, a player holds his funds in his wallet or in a smart contract (on the Ethereum blockchain), his cards are encrypted and the shuffling is done by a proven algorithm which doesn't involve a third party.
Main-net live in Oct/Nov 2018
Tokens are transferable only when Main-net is live in Oct/Nov 2018. This means that once the tokens are listed on exchanges, we expect to have not only speculative demand for the tokens, but also real demand for the tokens by players that wish to participate in the Virtue Poker Platform, or by users that wish to join the ecosystem by becoming Nodes in the Virtue Poker Network.
Fair ICO Terms
The total ICO cap for both rounds of the sale is 25M USD, if the ICO phase 2 will happen. The reasonable cap, 0% Bonus and the lockups for the team/advisory board allocation should help the price once VPP are listed on exchanges.
Attract user-base from scratch
Virtue Poker will obviously have big advantages over existing online poker sites, but it is also extremely difficult to attract users to a new platform. Virtue poker will try to penetrate the market by launching live streamed tournaments on their platform, hyped by the attendance of well-known poker players (Advisors of Virtue Poker). And also by using VVPs to incentivize poker players to join the platform.
CryptoPotato ICO Evaluation - result
Team & Advisory board: Broad experience and knowledge in necessary fields (Blockchain and crypto, high level igaming legal consultation, sponsored by world class poker players). Score 9
Stage of the project: May 22nd- private testnet is open for public sale participants. Oct/Nov- Main-Net launch. Score 9
Project potential: Exponential growth potential, the online poker industry today is evaluated at 2.5B USD. Attract user base from scratch is a huge challenge. Score 8
Community and Media: ~2500 followers on twitter, ~12,000 email subscribers (with 40% open rates on emails), ~6500 members on Telegram (Dedicated community of poker players and crypto lovers) Score 8
Token use: VPPs will be locked in by nodes to receive fees, by players for higher rake-back, and exclusively used to join special tournaments. Score 8
ICO: Cap - 12.5M USD, 20% of tokens distributed, 20% reserved for an optional phase 2 of the ICO, 0% Bonus for all rounds of the sale, reasonable vesting periods for team/advisory board allocation. Score 8.5
Whitepaper: The tech and user flow of Virtual poker platform is explained well. Score 9
Backend and Technology: A good use case for Ethereum smart contracts and IPFS. Managed to use the Mental poker algorithm for shuffling cards without a middleman. Score 9
CryptoPotato Virtue Poker ICO score: 8.56/10