CARV Verifier Node - Alpha opportunity in the modular data layer for Gaming and AI

Market opportunity

Data is the new gold. Since the 90’s, data has become the foundation of the most important invention of the 20th century: The internet . Every day, the amount of data being produced is huge and continues to grow fast.

But in its early days, the design of the internet was such that users had a sense of ownership and freedom over their data. This led to a period of creativity and innovation which resulted in many applications that have shaped how we live. But then things changed when a handful of big companies started to grow massively and the internet network got intermediated by those centralized platforms. Today 1% of social network platforms represent 95% of the web traffic and they have all the power to decide on the rules of the game and how to manage those huge amounts of data.

Over time, the internet migrated to an “ad based” business model powered by user data. This led to a huge growth in the data monetisation business.

However, this growth didn’t benefit users and creators on the internet as the high take rates of corporate networks took most of the revenue away. In addition to that, those data were not managed carefully, leading to growing concern over data protection and online privacy issues.

Ultimately, this corporate takeover of the web has stifled innovation, making the internet less dynamic, less fair, and less interesting for creators and users. This is why the “web3 ” movement began in the first place: To bring back individual sovereignty on the internet, place economic and governance power in the hands of users and end for real the common “Big tech says so.”

But for this vision to become a reality, one of the most important challenges to tackle is around data management. In other words, how to manage the entire data lifecycle so that users are back in control of their own data and can be rewarded fairly and in accordance with their choice. This is the mission that the CARV is trying to solve - create a new era for data self-sovereignty.

Overview of CARV

CARV sits at the intersection of data management and DePin (Decentralised Physical Infrastructure) and focuses on the value creation of data, for both users and developers. It is currently the largest modular data layer powering the Gaming and AI sector and the full tech stack of CARV comprises three main products: CARV Protocol, CARV Play, and CARV AI.

CARV Protocol

CARV Protocol is a modular data layer that facilitates data exchange and value distribution, mainly across gaming and AI. This protocol encompasses the entire data lifecycle process and enables users to own, control, verify, and monetise their data fully. This represents a game changer from the current corporate network models where users' data are misused, unsecured and out of the control of users. For businesses, the CARV Protocol provides access to high quality data in a private and user-compliant manner to enhance their operations. As such, this protocol aims to become a pillar of a user-owned internet.

The entire design of CARV Protocol is modular and composed of several layer that can be seamlessly integrated with one another:

• Identity layer: It integrates identities and data through CARV Link, Oracle, and other data verification services
• Data storage layer: This layer organises data across different levels based on different criteria.
• Computation and training layer: Utilises a Trusted Execution Environment (TEE) cluster to process data and train AI models. The outcome is then relayed to the execution layer.
• Execution layer: It interprets data consumers’ needs and allocates rewards according to the results of processing and verification activities.
• Verification Layer: This layer consists of verifiers from the community, tasked with validating the TEE attestation to confirm its secure and accurate operation.

CARV Play

The first flagship product built on the CARV Protocol is CARV Play. It is a cross-platform system of on and off-chain credential, web3 gaming distribution, and a social platform for gamers.

Here are some highlights about this product: 

• 780+ games and AI companies across web2 and web3 have been onboarded to CARV. This includes companies such as Electronic Arts, AliCloud, or Netmarble.
• Over 30% of all Web3 games have been onboarded. The biggest ones include Shrapnel, Illuvium , Off The Grind, and Pixelmon.
• Strong traction with over 2.5 million registered users, 900k CARV ID unique holders, over 1 million monthly active users, and 5.7 million on-chain attestations.
• CARV Play is one of the top 3 active ecosystems on chains such as Linea, opBNB, zkSync, or Ronin.

CARV AI

CARV has built its own AI virtual companion: Cara, with the goal of helping users navigate CARV and the broader crypto ecosystem. It is present on CARV Play, social network plug-ins such as Telegram, and can be integrated with web3 wallets, ID integrations, or TON-based games.

Breaking the old ways - The Data-to-Earn (D2E) model

The entire CARV stack is designed towards making users true owners of their data while making sure that privacy is maintained at any time. This approach opens the door to a new model where users decide on the fate of their data and capture fully the revenue generated by the latter. This data-to-earn model represents a big shift from the traditional model where corporate networks do what they wish with users data without giving anything back. In short, CARV is building a future where data creates value for all - a user-owned internet.

Team

The team behind CARV is experienced and good fits for their mission. It includes strong gaming veterans, crypto veterans, and product and design leaders from consumer-first companies.

Clo G - CEO

Big tech leader & crypto-native founder. Has grown gaming and entertainment products to >20M MAU. Founding member of Binance listed project. 

Victor Yu - COO

8 years of investor, advisory & operator roles in the startup space. Previously at McKinsey, IDG Capital, Harvard dropout. 

Kevin - CTO

Expert in confidential computation & blockchain. 6 years in crypto leadership roles at Coinbase, Google, previously sold web3 company to TRON .

Leo - CGO

8 years of game publishing and operations experience at EA, Tencent Games & Garena for a nearly 1 billion large global audience.

Ricky - CPO

10 years leading product in gaming, consumer and crypto. Multiple successful builds, both 0-to-1 and 1-to-100. 

Paul Delio - CBO

Head of Business Development. Brings 5 years of ecosystem partnerships across Web2 & Web3 gaming. 

Investors & partners

CARV has raised over $15 million across seed and Series A from a wide array of venture capital fund such as Hashkey Capital, ConsenSys, or OKX Ventures, as well as prominent figure in the crypto space like the founder of Pixelmon, Giuili Xiloyannis, or the co-founder of Sandbox , Sebastian Borget.

Moreover, CARV has partnered with many web3 projects, game publishers, and most of the major crypto ecosystems over the years. This includes BNB Chain , Solana , NEAR , IMX , Linea, zkSync, or Scroll. 

Tokenomics

$CARV is the token powering CARV and central to the entire protocol design:

• It will be used as the primary medium of exchange for the CARV platform, empowering users with ownership of data and participation in ecosystem governance.
• It will be key to bootstrap the incentive layer: data owners, providers, and consumers.

The total supply $CARV will be 1 billion and the full supply will become accessible over four years starting from the Token Generation Event (TGE). This is the following distribution and vesting schedule:

• Nodes & Community- Allocation dedicated to reward the community for their efforts in contributing to the project's success. - 50% (500,000,000 $CARV tokens). Here, half of this allocation (25% of the total supply) will be rewarded to verifier nodes in a specific vesting schedule.
• Ecosystem & Treasury - Treasury holding of $CARV tokens - 9% (90,000,000 $CARV tokens).
• Early Investors - Seed and early strategic investors in CARV are entitled to 10% of the total supply (100,000,000 $CARV tokens).
• Private Fundraising - Series A and thereafter investors in CARV that participate in private fundraising - 10% (100,000,000 $CARV tokens).
• Founding Team & Advisors - Reward to the core founding contributors and advisors for their full-time effort to the project's success 17% (170,000,000 $CARV tokens).
• Liquidity - Tokens allocated to provide liquidity - 4% (40,000,000 $CARV tokens).

The Alpha opportunity - Become a node operator

As stated previously, 25% of all $CARV will be distributed to verifier nodes. This means that there is a strong case to be made that one of the best ways to get the most asymmetric exposure to the CARV Protocol is to become a node operator.

Verifier nodes play a crucial role in maintaining the protocol's integrity, decentralization and security. The main function of these nodes is to oversee the entire on-chain data lifecycle and maintain the privacy of user data.

To reward the verifier nodes for their contributions to the network operations and security, $veCARV will be distributed as a reward mechanism. In total, the distribution of $veCARV will last 4 years starting from TGE. Here is the expected distribution schedule:

It is important to note that $veCARV are fully transferable to $CARV at a 1:1 ratio and require a locking period of 150 days to avoid any penalty. All the details can be found here .

Valuation and Scenario Analysis

Long term projection

To estimate the potential return on investment of running a verifier node, it is important to understand that the reward for each node is influenced by the portion of nodes that is effectively running and performs correct validation. Therefore to estimate the potential return for this investment we have to simulate a range of different scenarios.

Here is a potential return simulation at the end of the full distribution period:

Expected Reward in Year 1 post-TGE

Based on the expected distribution reward schedule, approximately 31% of the entire $CARV rewards are expected to be unlocked and available to claim in year 1 post-TGE. Using this assumption, we note that, with an efficiency rate of the verifier nodes of between 60 and 80% and an initial hypothetical FDV of $340 million, the FDV of $CARV required to breakeven in year 1 post-TGE is between $653 and 870 million. 

Here, this conservative study only takes into account the value of $CARV that will be fully unlocked and available. It is important to note that more $veCARV will also be distributed, but not claimable yet, and that verifier nodes could also be eligible for rewards from different CARV partnerships.

Comparative study

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