What is Siglo?
Siglo is a protocol that facilitates the use of mobile applications to accrue value and exchange it for increased mobile access and other goods and services. Users accumulate this value by sharing information, attention, and engagement with Siglo brand partners, and then exchange it for mobile connectivity in the form of airtime top-ups. Mobile apps built on top of the Siglo Protocol monetize the use of data with the consent of users and pass these earnings back to the user.
The Siglo Protocol will facilitate unbanked users’ increased access to networks via the creation of decentralized mobile networks that are incentivized, encouraging access to populations which were not previously covered by mobile networks. Network providers without major infrastructure would have the ability to provide services and still charge customers without having a traditional OSS/ BSS stack. The use of blockchain and smart contracts allows Siglo to redistribute the value to the creator of the data: the consumer, in a fair manner.
An active Siglo ecosystem will exist from day one through the Pig.gi Android app, which has 1.1 million registered users and 200,000 monthly active users in its first two markets: Mexico and Colombia. Millions of off-chain transactions have been made via Pig.gi users in the last 18 months using the existing off-chain data reward point, called the Pig.gi Coin. Now with the Siglo Protocol, the ecosystem uses the blockchain and smart contracts to manage this relationship between the app, users, and the brand sponsors. Siglo is the key to accelerating the growth of digital economies in emerging markets.
Why use Siglo?
With the historically high cost of computers and limited access to a stable power grid and landline connectivity, much of the developing world was late to adapt to personal computers. Factoring in cost and the fast advances in the functionality of modern smartphones, the emerging market has largely gravitated towards accessing the internet through their phones, rather than computers. In 2016, smartphones accounted for 55% of internet connections, a number which is expected to grow to 71% by 2020.
Research shows that consumers in these markets spent a total of $2bn USD on prepaid data and airtime. According to a GSMA Intelligence report from Q4 2016, 72% of the world’s mobile connections are pre-paid. Steady, affordable access to the internet is already bridging the “quality-of-life” gap in emerging markets at increasing rates. Access to mobile connectivity has been synonymous with socio-economic development, leading to cultural enrichment and communication across larger geographical barriers.
Factoring in average wages and the cost of top-ups in Mexico and Brazil, it takes an estimated 8-40 hours of work for consumers to earn just 500MB of data. Using the Pig.gi app, these same users can earn airtime top-ups during their commute, at home, or at any time their schedule permits them to interact with the app. This means that users are more connected than before and can use income otherwise used for mobile access for any multitude of other expenses such as education, and better food. Studies have clearly shown the correlation between upward economic mobility in emerging markets and digital inclusion, including access to the internet.
As these developing markets continue to see economic growth and connectivity, brands are showing high interest in reaching these populations. However, they are challenged by the fact that they cannot reach emerging segments with the same level of efficiency as can be done in long-established markets such as the U.S. and Western Europe. In these highly developed markets, brands have a plethora of historical data and active communication channels through which they can understand consumer preferences.
The Siglo Protocol
The Siglo Protocol is built upon a proven model with a critical mass of users. By adding a blockchain layer for transactions, and as part of the existing top-up reward model in the Pig. gi app today, we will be able to scale the model across emerging markets and support the unique value of top-up coins in each market using a universal clearing protocol.
From its inception, the Siglo ecosystem will have sizeable participation through Pig.gi, and upon reaching the milestones outlined below, Siglo will release the open-source protocol for other applications that offer an exchange of value between users and brands and have digital and financial inclusion as their modus operandi. Siglo’s value proposition is unique in that it is being launched into a market where loyalty and significant participation have already been achieved through Pig.gi’s existing user base. Historically, user acquisition for Pig. gi is low, $0.10 – $0.25 USD per registered user, tangibly demonstrating a mechanism for mass adoption is already in place and functioning.
We anticipate that with time, the Siglo will increasingly become a medium of exchange for digital transactions in emerging markets, as these same users leapfrog traditional banking solutions, arriving at more inclusive and accessible ways to transact online.
The Siglo Token
The motivation for creating a tokenized blockchain protocol layer is threefold. Key transactional pieces of the ecosystem benefit from immutable, auditable ledgers on the Ethereum blockchain.
- Brand transactions, where tokens are held in escrow, backed by an inventory of products, and then distributed to users who choose to share their data, attention, and opinions.
- User transactions, when Pig.gi Coins, or other app points in the future, are exchanged for products, like airtime top-ups.
- User to user transfers, where current alternatives are inefficient and costly. This includes, but is not limited to, cross-border remittance payments.
- In the future, other applications can use the protocol for transparent and accurate ledgers of value-transfer between users, providers, and brands.
The challenge of a token economy, such as this, is balancing the volatility of a free-floating token with the need for a stable user-facing currency in markets where the cost of advertising and cost of mobile airtime are variable. They address this problem by having two tiers, the Siglo Token and the data reward coins that are always fixed and backed by an inventory of products.
The current off-chain points are the data connectivity “coins” that are given to users when they interact with content and brands. Today this is the Pig.gi Coin, but in the future, this could be any reward coin or point distributed in different markets. The total value of these app coins is always less than or equal to the value of inventory held, like airtime top-ups. The amount of time it takes a user to earn a certain value may vary between markets since the rate of redemption is a function of local fiat and advertising cost.
To purchase products and top-ups from local carriers, users can exchange their data coins. Users can also redeem Siglo Token with their coins to exchange them on third-party exchanges for other token or between different Siglo apps. They intend to build an exchange for inter-protocol exchanges and peer-to-peer transfers.
Even as the Siglo Token price on the open market may fluctuate, the price for local top-ups in-app coins remains stable. This is desirable for transactions by users, especially in emerging markets, where less understanding of financial dynamics exists. On the other hand, there are market forces that may drive the price of the Siglo Token up, like an increase in demand by brands, increase in demand and velocity of use by users, and the increasing value of the consumer data that these users share. By separating the user-facing connectivity coin and the Siglo on-chain token, we can insulate end users from volatility and inflation of the open market token.
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