By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyse site usage, and assist in our marketing efforts. View our Cookie Policy for more information.

Demystifying Tokenomics: An Interview with Samarth Shyam, CEO of Ezzayo

October 30, 2023

Demystifying Tokenomics: An Interview with Samarth Shyam, CEO of Ezzayo

Can you give our readers a brief on Ezzayo?

Sam: Ezzayo is a specialized tool we've developed to stress-test the economic models of token-based ecosystems, commonly known as digital assets. The core issue we're addressing is that validating the economic structure of a token ecosystem today is not just challenging, but at times, nearly impossible. This is due to the fact that in order to truly understand and validate the economics of what's been constructed, it requires around two years of unique user data.

The prevailing solutions in the market are service-based operations and consultancies that 80-90% of startups are unable to afford. This often results in these startups launching their projects without proper validation, and unsurprisingly, a vast majority fail within their first 14 months. Ezzayo aims to fill this void with its automated self-service tool that simulates user behaviour to validate tokenomics.

How did you come up with the idea for Ezzayo? 

Sam: A combination of factors contributed to this. My journey in the industry started almost a decade ago when I invested in a blockchain company. That was my introduction to the complexities surrounding token ecosystems and the challenges in validating their economic models. I noticed numerous ecosystems failing due to flawed token economics. My co-founder, who has been part of the industry for a considerable time and is a second time founder. Given his background in data science, we both envisioned a solution to this pressing issue. Moreover, we realized no one was actively addressing this, which was quite astonishing. We firmly believe that robust infrastructure is paramount for the enduring success of any industry. Our belief is bolstered by the fact that tools like HTML5 were pivotal in the success of Web 2.0. With the evolution of Web 3.0, while there might be challenges, we're convinced that with the right tools, projects will attain long-term stability. 

How does Ezzayo work? Does it incorporate any AI components?

Sam: Our approach relies heavily on data from existing token ecosystems. We utilize on-chain information and synthetic data to build our models. Our primary technique involves agent-based and dynamic system modeling. This allows us to visualize users as agents who would interact with a specific ecosystem. Subsequently, we simulate unique user journeys and core loops that embody the token's utility. There's indeed an AI component involved. We employ reinforcement learning models for backend data and have recently incorporated a model similar to GPT-4 for our frontend. This allows users to simply upload their whitepapers or provide details of their ecosystem in natural language, which then assists in designing and validating their tokenomics. We introduced this after realizing that a dashboard-based approach was too intricate for users.

In the broader scope, are there other players addressing this issue? How does Ezzayo differentiate itself?

Sam: There are indeed several companies aiming to provide automated solutions. However, no one has been able to crack it just yet.  Their approach often requires an initial, cost exhaustive, consultancy phase before delivering SaaS tools. At Ezzayo, our goal is to fully automate the process, eliminating the consultancy component altogether. We anticipate a surge in the number and complexity of token-based ecosystems, and traditional consultancies might struggle to scale with this growth. This is where an automated solution like ours will prove indispensable.

What traction has Ezzayo gained in the market thus far?

Sam: Our projections indicate that by the start of Q1, we should be reaching an ARR (Annual Recurring Revenue) of around 80k to 100k USD. We're fortunate to have the backing of major names in the industry, like Quantstamp, Orange Dao, Crypto Oasis, and Entrepreneur First. Their support has been invaluable and a strong validation of our mission. We have several huge partnerships that we’ll be announcing in the next couple of months.

Looking back on your journey with Ezzayo, is there any experience that stands out to you?

Sam: Without a doubt, securing our first client was an unforgettable milestone. It's one thing to get investments and establish partnerships, but having a business genuinely recognize the value you offer to the point of paying for your service is truly heartening. It was a significant validation for us and an emotionally charged moment.

Given your experiences, if you could revisit the beginning, would you advise your younger self to approach things differently?

Sam: If I could advise my past self, I'd suggest a less aggressive approach to initial fundraising. We may have also benefited by turning to the Silicon Valley ecosystem earlier than focusing on Asian markets. Silicon Valley just has a more founder-centric outlook.

Lastly, given the current state of the Web 3.0 industry, what's your perspective on its trajectory?

Sam: We're undoubtedly in a bear market at the moment. However, it's worth noting that the Web 3.0 landscape mirrors traditional finance to some extent. When stocks are down, major currencies like Bitcoin often follow suit. Nevertheless, I believe the current phase is a filtration process where projects lacking substantial utility or value are getting weeded out.

Investors and participants are increasingly gravitating towards initiatives that showcase genuine token utility and value – projects that are built for sustainability and longevity. The silver lining in this market is the prevailing optimism. We're witnessing a surge in the creation of infrastructure and developer tools, which is a promising sign for the stability and sustainability of forthcoming projects. Recent developments, like the resolution of XRP's case with the SEC and the impending Bitcoin halving, are also bolstering optimism. Furthermore, there's a plethora of emerging projects with profound utility, whether they're collaborating with supply chains for enhanced ESG compliance, engaging with financial institutions for the development of Central Bank Digital Currencies (CBDCs), or even novel NFT-based games. Diverse and innovative DAOs are also entering the market. Given the current dynamism, I believe it's a great time to be engaged in this domain. Whoever can harness this period to craft value-driven projects, will be well-positioned to capitalize on the subsequent bull market.

What are some areas of collaboration you see with incumbents in the space?

Sam: We're currently in dialogue with a bank with a dual Asian and European presence. Their aspirations aren't limited to CBDC deployment. They're exploring the possibility of inaugurating their very own virtual asset exchange. The ambitions span from a large-scale exchange to a more niche platform where institutional investors can trade assets internally. We can provide them with the capability to rigorously stress-test their ecosystem and meticulously design their economic model. Simulation is paramount in these scenarios to ensure robustness and viability.

Can you give us a glimpse into Ezzayo's roadmap? 

Sam: Absolutely. We're in a pivotal phase right now, poised for expansion and growth. Our current focus is on securing our seed round, which has been gaining promising traction. We're also looking to roll out our self-service tool by December. Once that's accomplished, we're ready to scale our distribution strategies and start a broader outreach. Our overarching mission remains unwavering: to make this industry a better place for everyone.