Do you feel that, nowadays, online gaming is becoming more and more like unfair gambling? Provable fairness in games comes from the security and transparency of the players’ transactions. Can we have one single trustworthy system? Alex Tatarchuk, co-founder and CEO of Luckchemy, believes so! He has created a team with the goal of revolutionizing the gambling industry by means of modern blockchain and cryptographic technology. They aren’t only building a platform that will give players a wide range of different games at one place, but they are also incentivizing developers to share their games with a broader audience.
Hello, Alex. It’s also nice to meet another man with such passion! Or do you prefer cold calculations? What relationships have you had with gambling, and what led you to start this project?
Hello! I’d say I prefer both, as one without the other won’t get you where you want to be. I always loved creating products and games, and the idea of Luckchemy came to me when I was working on another project, creating a product concept and looking into social games and the blockchain as a part of my research. At some point during all of this, I realized that I can do more then simply make a social game, I can solve a problem that has been around for quite a while, like the fairness of games and secure transactions for players.
Alex, could you tell us more about your team? It seems that it has a lot of Slavic names. So is this a group of like-minded comrades or is it a full-fledged international team? What or who has brought you together? We would also like to hear about what fields of expertise your team covers and what comes from external experts and outsourcing?
It doesn’t matter where you’re from or what you did before, if you share the same view on things, are willing to do things really well, and want to make world a bit of a better place, then you’d definitely fit the team. After years in game development, the idea to create a team in order to revolutionize the gambling industry was in the air. Each team member has a complex background in the fields of their competences – from development to marketing. We cover all major directions needed to develop a platform (game development, mobile app development, finance, marketing, etc.), and our advisors help us with these fields as well. These well-known experts from the blockchain and gambling industries add a unique value to our expertise, allowing us to both create a better experience for users and grow much faster.
What is the secret behind the title of this project? Is it some kind of luck magic? What kind of public image are you aspiring to create? Also, the mascot is pretty cute. It strongly resembles one of the Final Fantasy 9 characters, but coincidences do happen.
No secrets here 🙂 Luckchemy consists of two words – Luck and Alchemy. We strongly believe that luck should be the only thing influencing winnings in gambling. Alchemy is a rich tradition built on the concept of maturing, purifying, and perfecting humans and objects, which is what we also apply to our product development. Luckchemy is our modern take on this notion as we strive to transmute and purify the existing gaming and betting paradigm into a single, trustworthy, and provably fair system by means of modern blockchain and cryptographic technology. They idea behind the mascot was to create a character that would make you think you knew him or saw him from somewhere.
Our public message resembles our slogan – “You’re an alchemist, make gold of that.” That means winning should only be in players hands without any influence from the system side of things.
The aspiration was alchemy and magic when we’ve been creating our mascot, there are also other characters who used the same concept, such as Veigar from League of Legends.
Your business model includes the participation of white label and indie developers to cooperate with the project. Why do you wish to share profits with them? isn’t it easier to just organize all of the games by yourself? Or is it actually a cost-effective way to operate? Also, the profit pool seems to be not be that big (1% or less of overall ticket purchases). Is this enough to share with all the intermediaries?
We don’t want to create just another casino. Luckchemy is aimed to be a platform where everyone wins. Developers can share their games with a broader audience, operators can get the final product without development and time wasting, and players can get a wide range of different games at one place with common rules and user experience.
Of course, 1% of ticket purchases isn’t enough to support an operational business. But here we are talking about only one game (lottery). Through this, we want to show players the main principle of our work – the only thing that influences winning is their luck. However, we’ll have a lot of other games where revenue will be divided differently between us and the users, thus providing a platform with the necessary funding.
It seems that you are planning to execute some operations off-chain, including using some cryptography methods. Then why introduce the blockchain at all? Is it a marketing decision? Does the blockchain bring forth the hidden potential of the industry, or is this a question of initiative and who is the first to apply it.
It should be pointed that we won’t use only off-chain cryptography in games after the ICO. We will use both blockchain technology and off-chain cryptography as stated in our white paper. Off-chain cryptography is a necessary thing in order to conduct some operations faster and more conveniently to the users. But the blockchain will still be the base for all our games since it will provide transparency and provable fairness to players. Online gambling is one of those industries where the blockchain provides real value to users. Because every player at any moment can check whether the results of the game was conducted fairly and without interference.
Let’s suppose for a moment that third-party commitment is a worthwhile undertaking. In this case, you’ve got to attract them in some way. Building up a player base is also a thing. How are you planning on doing this? Do you expect immediate popularity or stable growth? And how “loyal” are the users in this industry?
We are now in the process of an ICO. And you should understand that an ICO is not only the way to collect funds or distribute tokens, which are the internal currency for our platform, but they are also the way to distribute information about Luckchemy as well as its benefits for players and partners.
And we already seeing people reaching out to us, asking to help them enter the market or develop the game that is interesting for their target market. Building a strong brand, ICO, and marketing partners is all a part of the plan to make people hear about us and come to us.
We also attended many conferences with great networking possibilities, where we found not only investors but also advisors and potential partners.
We understand that in order to build a sustainable business you have to work hard and it takes a lot of effort, so stable growth is what we plan to achieve.
Loyalty is tricky to earn, and when you make games that look good, are fair to play with good user experience, and (what’s more important) are fun and exciting to play then you can expect to have fans. In gambling you would have brand loyalty, which means people would stick most of the time to the games they liked once, and we’re aiming to achieve this kind of loyalty from our players through our hard work.
With lots of utilitarian functions that the Luckchemy platform imposes upon LUK, the question of stability arises. How could investors coexist with players without sufficient volatility and “calms” during which no one wants to spend tokens?
LUK tokens would be used to pay for services and well as games, which means we’ll support liquidity of the tokens by accepting them. We don’t tie players only LUK’s what also would help us to keep our token stable we’ll accept other currencies as well as fiat money. It’s just of you hold LUK then you can get some advantages in games.
Right now we’re working on one concept never before presented in the industry, which would make the LUK economy and games process much more interesting and unpredictable… but that’s a secret for now 😉
You have also mentioned that your platform exhibits a “fair” mechanism for winning, and the white paper is very technical in this way. Could you explain it in simple terms? And if the results and winner choosing mechanism are publicly exposed is there some way to decipher it?
Love this question 🙂 I’ll try to explain. Imagine an endless chain, a regular one, made of iron, and on each piece it has a number which is somehow created (assume it’s random), and you have a stick with a number with which you could hit a random chain piece. Now you have to hit the first item you see after 8pm. You do that, and you can see number that’s on the chain piece has digits, and there’s digits on your stick, and combination of both would show you the winning combination for today. What’s good about how we do that is that once the winning combination is defined you can go back through the process and make sure that it was fair, but before you know it there’s no way you can know what would be on the next chain and stick combination.
New games are always good, and we’re constantly exploring new mechanics that we could apply.
Now that we have touched on the theme of some non-conventional gaming experience, we might discuss matters of the future. What do you think about the gaming landscape in the near future? Would the good ol’ one-handed bandit be still popular? Or are there some groundbreaking innovations on the way?
I think in near future governments would be more open and add local regulations for gambling. We are already seeing that with the recent betting changes in US market. I’d say it it would depend on who’s playing if it’s older people; they would prefer giving their money to what they know. But the younger ones, right now that’s a big problem for casinos because they don’t play. That’s exactly why this market needs changes badly, and that’s where Luckchemy comes to help.
With all that future talk, we have moved away from the issues of today. It seems that the modern problems in this industry are getting exposed more and more. What’s the deal from the insider’s perspective? Are there some fundamental problems that need to be answered by Luckchemy?
Aside of what I’ve mentioned previously, which is a very big problem and scares many old players on the market, there are other advantages. Cryptocurrency allows to cut processing expenses almost in half. When we did the projections, we were impressed at how big this opportunity is.
RNG is also a thing. There are a lot of studies on how good they are, and how they truly represent the even chances of winning in certain cases. It seems that you have some mechanism of your own winning sequences, but how fair are they in this regard?
As per the example you provided from random.org, we also do a similar thing. We tie our generation to blockchain hashes and mix them with server seed hashes, and with such a combination there’s space for predictability.
And we are now in the process of obtaining a GLI license, which will prove the fairness and accuracy of our RNG mechanism. This is important for us as we want to show that new tech is a good thing to apply in an industry where nothing had changed for almost 60 years.
Historically speaking, governments were always interested in the gambling industry. It was not only about additional profits to the state budget but also as an instrument of influence, as well as some welfare policy realization. Are there any legal regulations that enforce standards upon the online gambling industry of today? Does it involve blockchain projects?
The blockchain is not broadly regulated nowadays, therefore the legislation covering the standards relating to the gambling industry also do not have many provisions related to blockchain technology.
Now, there are some countries that are taking their first steps in this direction. Malta and Gibraltar are among the pioneers in this field.
Broadly speaking, each country has its own set of rules which cover issues related to the gambling in one way or another.
In other words, you should look closely at the jurisdictions you are desiring to enter on a case-by-case basis in order to be sure that you adhere to the rules and principles stipulated there.
It seems that your project has its fair share of company advisers. Are they out there just to give a suggestion or two? Does Luckchemy have some external investors or partners? Do you a cooperate with some of the other blockchain projects out there?
We invited only those who could help us achieve our goals and are interested in the project. We didn’t invite anyone just because of their names.
Our advisors have a different level of involvement in our project. Some help with investments, some visit the conferences we can’t reach, some participate in strategic planning, game development, or marketing. There is no single, unified way of collaboration, but every one of them is an exceptional expert in their field, and I’d say they are also one of the keys to our success compared to our competitors. In regards to a partnership with blockchain projects, we are always open to interesting ideas of cooperation!
While mentioning your advisers, we can’t overlook your recent audit services provided by New Alchemy. Could you talk a little more about that? This is not your ordinary company audit, is it? How often is this procedure being practiced be in the market overall? How effective is it?
New Alchemy is an external company that provides audits to different projects in the blockchain industry. We worked with them for several months. They provided the initial version of the audit, and we made some not-so-critical changes to our smart contracts based on their recommendations. After that, New Alchemy published the final version of their audit for everyone to see. Such audits should be made every time smart contracts change.
How effective is it? In case the project has audited smart contracts, everyone can say confidently that all concepts stated in the white paper are successfully implemented and are fully protected and safe.
There are a lot of plans listed on your roadmap until the end of 2018. Are they a series of successive tasks of a broad register of things to do that should be done simultaneously, or can they be finished in any order? It’s also unusual to see that only 10% of the budget goes to the actual development when marketing takes 3 times as much. What allows you to apply this kind of distribution?
Yes, we have a lot of plans! Many more than what’s mentioned in the roadmap, honestly. Every task in the roadmap is planned carefully, and we are making our best efforts to complete them all on time. We divided all tasks by quarters to make it easier for investors and partners to understand our strategic plans; however, some changes can still take place.
About the distribution of collected funds, 40% of funds will go to the lottery fund to provide both jackpot and current winnings. 30% goes to marketing because existing games (for example, lottery) requires support and new user involvement – the more people play, the bigger the jackpot becomes. And because we now have already had two readymade games and base for the whole platform, we can leave only 10% for development during the first stage after the ICO. But that doesn’t mean we will develop new games slower. It just means we now have an established process and team, and that it takes much less effort to develop a new game now.
Alex, could you share your opinion of the future that lies ahead of the blockchain industry? Is there a limit to its implementations or should we apply it as broadly as possible? Do you have some personal insights on this matter? Might you propose some arguments to support them?
I think the blockchain will become more deeply entrenched into our everyday life and will definitely make us more secure and less dependant on monopolists, which is exactly what I love about the blockchain. Regarding blockchain usage, I’d say when you think of applying it somewhere, you should ask yourself if it could work without it? Yes? Does it make it better? If the answer is no, then don’t do it. If you say yes, then you should try it. That’s what awaits us in the next few years I think. People would be trying to solve many problems with the blockchain and some will be solved. We’ll see more protocols and complex projects that will be the pushing the technology forward.
Insights? Once the Wild West period in crypto is over, we’ll see really amazing products, we just need to wait a little longer. The box is open now.
May we ask you to share not only your vision but your knowledge as well? Some blockchain-related sources, expert opinions, or materials for personal growth would be warmly accepted by our readers.
George Levy is a good friend of mine who is leading blockchain education courses. That’s a great entry into what the blockchain is.
Also, David Siegel and Richard Titus are people that I would follow.