TTC Protocol — The House on Hallasan

11.02.2019

TL;DR. Ecology:2. Technology:2. Decentralization:2. Valuation:3. Rating:2/10

Introduction

TTC Protocol was announced on bitcointalk.org by user aTriz as late as the 6th of March 2018. It is described as a decentralized and incentivized social networking protocol that tries to mitigate the platform provider from the ad revenue equation as well as solve the problem of user generated content ownership. The TTC token was designed to act as a utility token on this social network, and are ultimately going to be used to also incentivize social interactions as well as nodes participating in the consensus mechanism.

On the 7th of March, an extensive marketing bounty campaign launched. A pre-ICO of 25M TTC ended straight thereafter, on March 15th. The main ICO of 100M TTC was planned for 18th of April, and it ended one month later. In a post token sale announcement, the TTC team made plans for the ERC20 Token Distribution Event (TDE) as well as coming exchange listings. Exactly how many TTC had been bought during the sales was never stated in detail, but the TDE was scheduled for 25th of June 2018.

In July 2018, after contributors had received their TTC tokens, an airdrop for tataUFO users started. tataUFO was the first social media app to be integrated in to TTC Protocol. The app itself was founded in 2013 by Brian Cheong, who is also one of the founders of the TTC Protocol project itself. As many as 100 000 tataUFO users quickly signed up for the airdrop, and this number later increased to over 700 000. Brian and the rest of the team saw an opportunity here to introduce all these already existing social media users to blockchain software.

As 2018 progressed, not much newsworthy was written in the BCT-thread. Few if any team members were present, and from the thread alone it was not easy to follow what was actually going on and how the crowdfunding activities were doing. There were however many strange posts by bot-like users, and BD Ratings is not really sure what they stood to gain on the posting, or who they belonged to.

More information got published on Reddit however. In September 2018, the team announced the release of the first version of the TTC testnet, named Merapi, as well as their first wallet, TTC Connect. About one month later, the TTC Protocol team managed to partner up with four additional South Korean social media apps with the goal to increase the potential user base even further. In December, TTC Pay launched. This application facilitated easy payments in TTC tokens, so the plan was, once mainnet had launched, to encourage economic activity on the TTC blockchain through this user friendly infrastructure. And that is where TTC Protocol is standing at time of writing. A testnet is proceeding smoothly, and supporting software are getting built in parallel to mainnet development. This mainnet is scheduled for end of March 2019.

According to the whitepaper, TTC has a total supply of 1B tokens. 250M were allocated to the crowdsale (although BD Ratings recalls only 125M for both ICO's), 250M to a 'reward pool', 200M to ecosystem building, 200M to the Singapore-based foundation, and lastly 100M to the team, old users and bounties. The reward pool is a pool of tokens that is to incentivize, among others, representative nodes, in other words nodes elected to maintain the blockchain.

In the TTC Protocol team's first letter to the community, they discussed the choice of consensus mechanism and resulting transaction throughput possibilities. The team stated that a DPoS-BFT model had been chosen for the blockchain, where a master node system could facilitate the needed high throughput. In each round of the mining process, 21 representative nodes would record and synchronize transactions. A version of Ethereum's EVM is used for smart contract capabilities, and the main TTC Protocol client itself is a fork of Ethereum's Geth client.

Ecology

Even though there is no proof it is connected to the TTC team, it is still worrying that sockpuppets are operating in the bitcointalk.org thread with impunity. Some of these praised the project in that thread, just to stop completely in September 2018. They all posted in similar off-topic threads on bitcointalk.org before showing an interest in TTC. Others stopped being active on the 24th and 25th of January 2019, and it is not as certain they are actual sockpuppets.

Not only do mostly sockpuppets hang around in the now mostly inactive BCT-thread. The official subreddit is all but dead as well, with less than a post per day (most of them by the team itself). It is telling for TTC Protocol that the only stickied thread is that of exchange listing plans. It is just one of many symptoms of a team that is too much focused on marketing and token price, and too little focused on decentralization and security. With that said, there was a successful meet-up in South Korea recently, so at least some people not visible in the subreddit are interested in the project.

In their whitepaper, the team included a section where they predict the future price of the TTC token. Such price predictions in a whitepaper is incredibly scammy, and may attract problems when burned investors decide to sue TTC Protocol. Worth adding is that they put a 'pessimistic' 3-year price prediction of over USD 18, which would indicate a 100 000% price increase from today's level. The 'optimistic' price prediction was of course higher even.

The bounty campaign in March was your typical hype-seeking spam fest where users got paid to tweet, post on Facebook, change signatures etc. It was initiated just a week before the pre-ICO. This leads to low quality discussions what the project actually tries to achieve. It also leads to a disloyal community.

Multiple cryptocurrency funds have invested in TTC Protocol. #Hashed, a Korea-based fund, contributed with funds before the ICO's. So did Block Crafters Capital, a cryptocurrency investment firm. Ledger Capital, yet another Asian investment firm, invested in TTC Protocol as well, and so did Nirvana Capital. Coefficient Ventures, FBG Capital and Global Blockchain Innovative Capital invested as well. BD Ratings is fascinated by these firms swarming to such an obviously weak project that calls a x1000 price multiplier 'pessimistic'. It goes to show the level of professionalism and sophistication for these investment funds.

After the pre-ICO and main ICO events, the TTC team confirmed that around 1.8% of all issued tokens for the main ICO, were unsold. First they though of burning these tokens, meaning existing token holders would see their allocated shares of total supply increase. But with some vague reasoning they concluded that this was not fair. Instead, the team constructed an airdrop scheme with three different snapshots. BD Ratings finds this problematic as it just encouraged token owners to hold on to their tokens in order to not have their wealth diluted by inflation.

Grade: 2

Reasons: No mainnet. Scammy marketing tactics. Market adoption focus.

Technology

Forking the code of an existing blockchain can have both positive and negative implications for a cryptocurrency rating. On one hand, copying from already battle tested blockchains may increase overall security, but on the other hand, copying is easy and may hide the fact that the project developers may be incompetent with regards to blockchain security. The TTC team has to prove themselves in this regard. Building a social media platform prior to having to handle complicated blockchain security is not enough credentials on its own.

The overall TTC blockchain construction seems complicated. Tokens have been reserved through TreE (TTC Reward Engine) to reward social media users as well as representative nodes. Given the incentives, it is vary hard to map the game theoretic implications of the whole construction. If just one or two reward parameters are wrong, certain entities can obtain power through a growing stack of TTC tokens. The more parameters the chain has, the higher the risk of future chain splits as well when pats of a diverse community suddenly want to tweak one of them, often for own benefit.

With the Merapi testnet release, a bug bounty was published as well. This is proper use of collected funds.

Grade: 2

Reasons: No mainnet. Bug bounties. Code base copied.

Decentralization

TTC Protocol has many centralization problems. The master node operators are called representatives, and the team is at time of writing taking applications for representative slots in preparation for the mainnet. The problem with a permissioned start is that the team of course has power to allocate slots to friendly applicants. One listed requirement is a history of promoting TTC Protocol on social media. In other words, the team demands some shallow display of loyalty instead of going for full permissionlessness.

As representatives ultimately will be elected by token holders, it is also sub-optimal that the TTC team sits on a large number of such voting rights. This obviously increases the risk of a team that in the long run votes in heir own representative nodes. The skewed distribution is apparent here.

Additionally, the TTC Foundation (not to be confused with an actual non-profit foundation) is a company incorporated in Singapore as a company limited by shares. It is a central point of failure should regulators dislike for example the extreme price appreciation forecasts in the whitepaper.

Grade: 2

Reasons: Tokens concentrated to developer team and company. Representative nodes need to apply before participating in consensus process.

Valuation

Considering the bad fundamentals outlined above, today's TTC valuation of around USD 16M is overvalued compared to Bitcoin's valuation as the project as a whole is at large risk. It just has too many attack surfaces to withstand all that can be thrown at it during the upcoming years. Unless the project decentralizes significantly and starts focusing on code instead of a user base, BD Ratings predicts it will fade away and die relatively soon.

Grade: 3

Reasons: Bad fundamentals.