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WHITE PAPER

Blockchain Platform that Grows ‘ARTIST + FANS’

Sep 2019

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1. Abstract

The recent popularity of many idol groups, including BTS, shows the status of the Korean music industry.

In particular, Big Hit Entertainment's BTS, which debuted in 2013, is the most popular especially among teens and people in their 20’s around the world, ranking the 10th on the Billboard HOT100, which is the best record among Korean singers, and 1st on Billboard 200, which is the first as Korean singer. The economic effect of tangible and intangible caused by such is expected to be very large. Hyundai Economic Research Institute understands that the increase in the number of foreign tourists due to the increased awareness of BTS is about 796 thousand annually, which is about 7.6% of the total number of foreign tourists, and the total economic is the annual inducement effect of about KRW 4.14 billion (26 times the average sales of SMEs) and the added value induction effect of KRW 1.42 billion (8.9 times the average sales of SMEs).

This is just a cosmetic aspect, and Korea's music industry continues to grow to this day of 2019.

Korea's music industry is the 9th largest music market in the world, thanks to idol groups with significant fandom such as BTX, EXO and TWICE. Although the global music market share of the Korean music industry is still only 2%, the influence of K-POP has been steadily expanding, and exports have increased at an annual average rate of 17.2% over the past three years. [1] However, there is a dark side behind this bright figure. The domestic music industry can be classified into three major problems.

First, there is a problem of centralization of wealth centered on large agencies. Second, there is a uniform music style problem due to idol biasing. Lastly, there is a lack of reward system for fandom activities that support artists including idols. In order to solve these problems, the structural problems must be improved. Therefore, we propose LODI, a virtuous cycle artist training platform that enables the whole process from discovery of artists to training, debut and activities with fans. In addition to the online service, the LODI platform aims to change the entertainment ecosystem through partnerships centered on its own academy and planning agencies affiliated with the KMF(Korea Management Federation).

Copyright ⓒ Star Empire All Rights Reserved 2 / 24

2. Introduction

The globalization of Korean cultural industry has appeared in various ways, and Korean Wave is

continuously developing and spreading around the world. First of all, the center of Korean Wave 1.0 is K-Drama by large Korean Wave actors represented by Bae Yong Joon. What Is Love, Stars in My Heart, Autumn in My Heart, and Winter Sonata are dramas that are the symbols of the 1st generation of Korean Wave. The Korean Wave 1.0 era has passed and the center of Korean Wave 2.0 began with K-POP. K-POP received full support from all over Southeast Asia thanks to the first Korean Wave to enter the Asian market through drama. It is also widely loved in Central Asia, where cultural heterogeneity is strong.

Since H.O.T started the Korean Wave craze for the first time in Asia, BOA led the K-POP Korean Wave

through the localization strategy in Japan, and from the 2000s, K-POP global fandom grew rapidly centered around TVXQ, Big Bang, Super Junior, and Girls' Generation in Southeast Asia. In 2012, Psy created a worldwide craze over the US with Gangnam Style music video through YouTube, and the Korean Wave passage is currently being followed by BTS, which forms a thick fandom based on the teens and people in their 20’s of the world.

The new Korean Wave 3.0, centered on BTS, is spreading around the world through online and mobile

-connected platform-specific content, in line with the shift of global content distribution to OTT (online broadcast video service) and social media. In addition, it is not limited to only one sector, K-Drama or K-POP, but also affects the entire industry such as music, performance, fashion, and beauty, while becoming a new culture.

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In this way, K-POP has established itself as the highest image that foreigners can think of when reminiscent of Korea [Source: Korea Institute for International Culture and Education (2018) <2018 Global Korean Wave Survey>]. The peculiarity of Korea is that K-POP is associated with the image of Korea in countries such as Europe and South America as well, not only in Asia, which was considered as the main importer of Korean culture (ranked as the 1st in all of Malaysia, Indonesia, Australia, Brazil, France, UK and UAE). Also, K-POP was ranked as the 3rd after Samsung Electronics and cosmetics as Korea-related products, and as the 1st with a significant increase (+ 11.4% p) compared to 2016 in popular Korean products / services / contents sector.

Exports of music content products represented by K-POP increased by 68% to USD 660 million as of 2016,

and the Korean music industry's exports amounted to USD 442.57 million and imports amounted to USD 13.67 million. [2] Since 2012, the Korean music industry has been growing at an average annual rate of 7.4%.

Globally, Korea ranked the 9th in the global music market revenue ranking. In particular, idol groups,

which have significant fandom at home and abroad, such as BTX and EXO, showed significant * references in the offline market. Gaon Chart (www.gaonchart.co.kr) is an offline record chart that is officially recognized in Korea. If you look at the top 10 records in the annual chart, the idol group's record is the trend. This trend has continued since 2011.


However, the Korean music industry was not just about bright sides. While the idol group has become the center and eroded the global music industry, the overall infrastructure of the domestic music industry has been deteriorated by large agencies such as SM, JYP and YG and large corporations. As K-POP is represented by the words referring to idol groups rather than all popular Korean music genres, the Korean music industry has become an ecosystem where various genres cannot be cultivated.

Diversification of the domestic music ecosystem cannot exist any longer, as long as only the idol group, which

receives music from a specific professional composer and is armed with spectacular performances framed by a professional choreographer, both part of a large agency, is the top predator of the Korean music ecosystem. In addition, mass-produced idols led by large corporations can cause fatigue, and debuts by SMEs or of single artists who are not part of large corporations become more difficult. The idol deflection of the music world has brought about structural problems that cannot be debuted in the music world without idols, and that even if they make a debut, they are not popular and successful.

Of course, there are musicians who produce their music separately from this idol culture. There were also

musicians who made their debut through the music survival program that started in the mid 2000’s, but most of them disappeared after a short time without being very popular. This structural problem is mentioned as the main cause of the downturn in the Korean music industry.

To address this imbalance in the domestic music industry, we propose LODI, an artist training platform that aims

for a balanced music industry. LODI intends to tokenize the domestic music industry by incorporating artist training blockchain technology, and to correct the unbalanced music ecosystem.

Copyright ⓒ Star Empire All Rights Reserved

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3. Relative Works

Various attempts have been made to resolve the imbalance in the domestic music industry. In particular,

there have been many music ecosystem creation projects incorporating transparency based blockchain technology and token payment system. In Section 3, we will analyze 3 representative projects and compare them with LODI. LODI has the advantage of providing not only merchandising and performance ticketing through the token business, but also a music academy not provided by other projects.

3-1. Stargram

Stargram aims to become a global fandom platform through the convergence of O2O entertainment with blockchain technology. Stargram's tokens can be used for music streaming services based on the blockchain called Bingo Music. Bingo Music aims to eradicate illegal music distribution and create an ecosystem for consumers to use high quality music via payments using Stargram tokens. Users with Stargram tokens can benefit from the purchase of MD products such as star goods or albums provided by the agency, and Stargram tokens can be used for online and offline payments, especially QR code payments. In addition, it provides a community space where stars and users can communicate and provides various contents.

3-2. ZENITH Media Contents

Z-POP Dream Coin of ZENITH Media Contents is a cryptocurrency based on Korean Wave entertainment industry. The Z-POP Dream Online Platform of ZENITH Media Contents is a place for Korean Wave fans all over the world to communicate and use Z-POP Dream Coins. Z-POP Dream Coin is also used to pay for idol goods in online shopping malls, and can also be used for crowdfunding of favorite idols, movies, concerts, musicals and music. Similar to Stargram, it can be used for content downloads, ticket purchases, and music streaming services as well.

3-3. Stage One Stage aims to be an entertainment blockchain network platform connecting fans and artists.

Through tokenization of fandom, Stage tokens are rewarded fairly according to the contribution of fans. The rewarded Stage tokens will allow you to purchase artists' albums, concert tickets, and more, allowing artists to grow their business through fandom. Stage One differs from other tokens in that it is concerned

about stabilizing token prices through stable coins.


4. LODI PLATFORM

LODI PLATFORM is an artist and fandom training platform aimed at a balanced music industry.

In order to become a life-oriented service, LODI PLATFORM was implemented as a mobile application,

and a token reward system was implemented as a blockchain so that artists and fans can create a healthy

ecosystem autonomously. Since users' data for determining token rewards are very sensitive to forgery and

alteration, LODI manages such data in blockchain to prevent forgery in advance.


4-1. LODI Service Model

When a user (aspirants / trainees / artists, herein after referred to as the ‘Artist’) uploads content (pictures /

videos of vocals, choreography, sound sources, etc.), a user (FAN, herein after referred to as the ‘FAN’) will be able to rate (like), comment on, share, or follow the content in LODI. The content and activities generated here are rewarded with tokens based on their value, and the tokens can be used for item purchases, crowdfunding, fan club / fan meeting activities, performance requests and ticket purchases, production and sales of goods, and music purchases.

Artists highly rated by FAN (likes, views, comments, shares, etc.) will be able to participate in auditions

conducted by LODI, where trainees will be systematically trained at LODI Academy and debuted in conjunction with partner agencies for activities. In this process, artists can upload individual contents (practice, training, daily life, etc.) to LODI, or continue to communicate with FAN through live broadcasts and community activities to form fandom. FAN will be able to fund the production of the album so that their favorite users (aspirants / trainees / artists) can make their debut and receive some rewards for the album's revenue. Copyright ⓒ Star Empire All Rights Reserved 9 / 24

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4-4. LODI Service Process LODI PLATFORM, in order to create a healthy music industry, provides a fair opportunity for celebrity

aspiring artists. Partner agencies and their preliminary artists who have partnered with LODI upload their daily photos / videos or walkthroughs to the LODI platform. LODI users will participate in fandom formation in a variety of ways, while watching the media content of pre-artists uploaded to mobile applications. In addition to the agency and existing fans, new fans introduced through LODI can form this fandom.

At the same time, LODI runs an artist training academy to help potential artists strengthen their capabilities.

If you want to take the academy among LODI general users as well as pre-artists, you can apply for the course

through LODI token. After a long period of time, when a preliminary artist with the right level of fandom is created,

the partner agency can in turn propose a contract to match them and help them make their mainstream debut

as an artist / celebrity.

What differentiates LODI from other competitors is whether or not it owns its own academy. LODI Academy

offers detailed and systematic training based on vocals and dances through a variety of instructors in the

entertainment industry. In addition, it does not end with simple training, but provides a practice room, a recording

studio, a performance hall, a shooting studio, etc. to build a system that allows experiencing all the necessary

processes from practice to performance and broadcasting.


It offers a lively training on site for trainees selected from the LODI App, aspirants, hobbies and leisure activities, and students, who want to learn vocals and dances. In particular, trainees selected from the LODI App will be able to make their debut work for their albums / sounds in cooperation with LODI's partner agencies, depending on the trainee's and the FAN’s choice.

This is not a way of proceeding as the agency intends, such as forming a group, music genre and style, and determining member centered on an existing agency. It is a new way for partner agencies to offer their trainees a debut concept and process, and the trainees and FAN select an agency to prepare for their debut.

LODI Academy will continue to upload the contents of the trainees' entire curriculum to communicate with

the FAN and also introduce new trainees to FANs by uploading the contents of general celebrity aspirants, hobbies and leisure activities, and students preparing for entrance examinations.


4-5. LODI Architecture This chapter proposes and explains the overall architecture of LODI PLATFORM for fair and healthy

artist training and fandom ecosystem creation. The figure below illustrates the LODI service architecture. LODI is implemented as a token through the ERC-20 token standard, one of the Ethereum network's smart contract services. LODI tokens and LODI Wallets are implemented as smart contracts, which are called by the LODI private blockchain to process LODI transactions. In addition, there is a LODI private blockchain for content data management to give reliability of data flowing into the LODI ecosystem.

This service layer is a hyperledger fabric that is a high-performance blockchain that can handle big data,

and is mainly used to secure user data generated by LODI mobile application or to calculate user's behavior index. The LODI Common Platform Service layer represents an app service that users can use on mobile. Various services will be provided on the LODI application, including funding services to support the training and debut of artists, advertising / commerce services to pay / purchase artist MD, and academy services to help general users receive general music training. In addition, a variety of services can besides what were mentioned can be mounted, as mentioned earlier in Section 4.

.


LODI App receives various data of LODI app user and sends it to LODI backend server. In the general

server-client model, there is a high possibility of forgery of the user's behavior data. In the LODI ecosystem, such data can be converted into tokens soon, so it should be treated as very sensitive data. Therefore, it is necessary to prevent forgery and alteration of user behavior data and block data to blockchain. However, data such as academy trainees or videos uploaded on the LODI PLATFORM by ordinary LODI users can lead to the cost of storage space. Therefore, it takes an intermittent server-client form and stores the actual data in AES-256, encrypts and stores it in Amazon RDS. The hash value of the data encrypted in AES-256 is stored in the private blockchain to prevent forgery.

The smart contract service of the Ethereum blockchain incurs ongoing operating costs as transactions occur. Therefore, to solve this problem, the LODI Foundation will decide again whether to develop its own public

blockchain.


4-6. LODI Tokenomics An economically active ecosystem in which cryptocurrencies with value from people are issued and

released to the market, where they can trade services or goods is called ‘Tokenomics’ , which is a compound word of 'Token' which means cryptocurrency and 'Economics' which means economy.

Designing tokenomics is not just about making money that is used for a specific purpose. There is a need

for a sophisticated platform where these currencies can be used and participants can interact with each other. There is also a need for users to pay money and use services, and the value provided by the service provider or platform itself. In addition, a fair and attractive compensation model should be added.

While many blockchain-based services offer a variety of novelty reward models and Tokenomics, and

mention justification for participation, the most important thing is to secure a solid value base on which tokens can have value. No matter how many tokens and discounts are offered, it is not easy to gather participants if the value of the token itself is very low and there is little room for value increase. In particular, the most vulnerable part to investors when conducting an ICO is the value base of the token.

In order for the token value base to be strong, it must be able to sustain demand for tokens.

Someone needs to continue to buy data provided by contributors, or they want to feel comfortable and continue to use the platform on which the token is used. However, for most blockchain-based services, this is often poor, which is directly related to how robust the business model is.

LODI offers a variety of ways to maintain this token demand. The following figure summarizes the overall LODI Tokenomics. There are two ways for LODI users to acquire LODI tokens. The easiest way is to purchase LODI tokens

registered on cryptocurrency exchanges with a legal tender, BTC or ETH. The second way is to upload various behavioral data on the LODI platform to be rewarded. The actions that can be recognized as rewards on the LODI PLATFORM are shown in the table below.


No. Behavior Reward Category Token Reward 1 Content Creation (e.g., Videos, photos, posts) 2 Content View 3 Content Sharing

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The other 6 behaviors except No. 7 can be normalized by the user's activity index. The normalization logic is shown below.

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4 Reply / Report / Like Actions 5 Securing Number of Followers 6 LODI New Inflow through Invitations 7 Token Holding of Certain Level Equity Dividend

P(x: Reputation) Frequency Distribution Cumulative Point 9 < x ≤ 10 1.7% 1.7% 10 8 < x ≤ 9 4.4% 6.1% 9 7 < x ≤ 8 9.2% 15.2% 8 6 < x ≤ 7 16.1% 31.4% 7 5 < x ≤ 6 19.2% 50.5% 6 4 < x ≤ 5 19.2% 69.7% 5 3 < x ≤ 4 16.1% 85.8% 4 2 < x ≤ 3 9.2% 94.9% 3 1 < x ≤ 2 4.4% 99.4% 2 0 < x ≤ 1 1.7% 100% 1

No. Behavior Reward Category Code Limit 1 Content Creation (e.g., Videos, photos, posts) DR 10 2 Content View VW 25 3 Content Sharing SR 10 4 Reply / Report / Like Actions BH 25 5 Securing Number of Followers FW 20 6 LODI New Inflow through Invitations IV 20

# #

Users can acquire LODI tokens through these two methods, which can be used for LODI PLATFORM and

Academy. Where the LODI token can be used can be found in the table below.


No. Token Consumption / Holding Methods

1 MD Purchase

2 Fan Meeting/Concerts/Sound Source Purchase

3 Funding for Artist Sponsorship and Record Production

4 LODI PLATFORM Item Purchase

5 Taking LODI Academy

6 LODI Premium Service Subscription

7 Token Dividend by Token Holding

5-1. Token Issuance

A total of 3 billion LODI tokens will be issued to develop the LODI system and operate the global eco-

system of the secure and scalable LODI PLATFORM. The LODI token is a utility token that can be usefully used on various platforms provided by LODI and proves interests such as future profit sharing and voting rights.

Name LODI Coin (Abbreviation: LODI) Type ERC20 based Utility Coin

5-1. Token Allocation 1.5 billion, which is 50% of the total issuance, is allocated to mining for fandom rewards, and the remaining

50% , 1.5 billion, is allocated to private / public and ICO / IEO sales for LODI PLATFORM development, construction, performance and marketing. The team & advisors and partners were not allocated with anything to increase the stability and transparency of Tokenomics.

Total issue volume: 3,000,000,000

Quantity Ratio Remarks Mining 1,500,000,000 50% Behavioral rewards, Air Drop, etc. Sales 1,500,000,000 50% Public/Private Sale, ICO/IEO, etc.

l The above quantity is the initial issue and allocation, and changes are determined by the board and posted on the official LODI channel.

l A virtuous cycle of compensation, consumption, and trading is maintained through LODI PLATFORM and cryptocurrency exchange.

5-2. Utilization Plan of Token Sales (Proposal)

Ratio Quantity Utilization Plan 20% 300,000,000 LODI PLATFORM Development

50% 750,000,000 Concerts, Marketing, Air Drop, etc.

20% 300,000,000 Academy Establishment & Operation

10% 150,000,000 LODI Fund l Overall ratio may vary depending on board decisions and will be notified to the official LODI channel

when changes are made.


6-1. Roadmap (Proposal)

6-2. Service Expansion (Proposal)


7. Partnership

LODI intends to change the entertainment ecosystem centered on large-scale agencies and distributors

through partnerships centered on the agencies of the Korea Management Association.

LODI’s partner agencies who have produced the top-class artists will stand by the debut and activities of artists by delivering their accumulated expertise and experiences to trainees selected from LODI. Moreover, the affiliated singers will work with LODI marketing and provide mentoring to trainees and artists.�

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9. Reference

[1] A Study on Music Diversification Strategies for K-POP Global Expansion 2017, Korea Creative

Content Agency

[2] 2017 Music Industry White Paper, Korea Creative Content Agency

[3] 2017 Pop Culture Art Industry Report [4] Star coin white paper [5] STAYGE white paper [6] Structural Problems of the Korean Popular Music Industry and Discussion on Improvement Direction

[7] What Is the Value of Music in Korean Society? Imbalance between Sound Source Prices and Music Market


white papereng)_lodi.pdf · in 2012, psy created a worldwide craze over the us with gangnam style...

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