Cryptocurrency Rating |【ObEN-Project PAI】| Madman Research Institute
Verdict:
Category: Blockchain
Author: Madman Research Institute

Cryptocurrency Rating |【ObEN-Project PAI】| Madman Research Institute

Verdict:
Based on the study of Madman Research Institute, Project PAI (PAI) is rated:
Score: 85.2 Grade: A-
Abstracts of the Rating:
1. Project Analysis:
PAI is a public decentralized platform (blockchain), on which both Artificial Intelligence (AI) and the blockchain protocol are complementarily administered. With the integration of AI and the blockchain, the decentralized network continuously provides computational power and collects authentic data to feed and optimize machine learning algorithm as to advance the development of the AI ecosystem hosted on the PAI blockchain. The objectives of Project PAI is well-defined, as the innovation has clear application scenarios that are adoptable by a vast market and commercially viable.
2. Team Analysis：
Established in 2014 and well-known for their strong technical background, ObEN is resourcefully well-connected in the industry. The company attracted a large array of reputable institutional investments from business giants including Tencent, Softbank, S.M. Entertainment Group and many other high-profile VCs.
3. Marketing, Social Network and Ecosystem Growth：
The marketing campaign is steadily growing existing social network communities and opening new channels within the social media space. Currently, China and South Korea have the most active social network communities while the Japanese fans community is catching up in growth. However, more exposure is needed in English-Speaking social media space to grow potential user base.
In terms of commercial collaboration of PAI, ObEN has signed up to cooperate with an abundance of well-known enterprises entities, institutions and projects.
4. Project Progress：
Due to strict SEC regulatory requirements in USA, overall project development is slightly trailing behind their roadmap. However, this guarantees the legitimacy of the Project PAI. At time of writing, PAI is yet to release the open-source code publicly. We will continue to follow the overall progress of Project PAI and adjust our rating based on latest information.
5. Token Economy：
PAI is a public blockchain platform which inevitably requires a long research and development cycle. The crowdsale capitalization is relatively on the high side.
The initial token distribution structure is designed to facilitate the future development of project and ecosystem. In term of liquidity, PAI token has been listed on Huobi cryptocurrency exchanges at time of writing. We will follow up on this as information becomes available.
【Expectation】：
Project PAI encompasses the two hottest technological potentials i.e. the blockchain and Artificial Intelligence. Presently, PAI’s MainNet has been launched and PAI token has been listed on cryptocurrency exchanges. Under current market condition, we expect the neutral market performance. Long-term wise, as a public blockchain project, to achieve a competitive edge in the AI realm, PAI will need to focus on their on-chain dApp development and ecosystem building. Based on their team strengths, funding and experience from ObEN’s deep-pocketed investors / stakeholders, we maintain a long term bullish view on PAI.
PART ONE. Project Analysis: (Weighing: 30%, 27/30)

Project PAI is developing an open-source blockchain protocol to decentralize AI development for individuals. It allows people to use this unique blockchain to manage their AI assets, to make an authentication of their identity, to start data learning and to develop application. PAI blockchain protocol enables the decentralization of PAI and contains three layers: authentication, network, and storage. The purpose of this protocol is give people trackable ownership and management rights (e.g., portability, limited sharing, and interoperability) to their intelligent personal data profiles or their PAI. The project aims to provide various customized AI services including social networks、entertainment 、health care, etc. This unique blockchain protocol sets a decentralized platform and provides information for advancing the technology of Artificial Intelligence, incorporating decentralized artificial intelligence development into the blockchain
In specific, PAI is a 3D intelligent avatar designed to look like you, speak like you, and behave like you in the digital space. Everyone can own their PAI, meanwhile, users receive rewards for the contributions of the data and resources.
1、Project Positioning： （45/50）
At present, Artificial Intelligence is one of the hottest areas in the development of science and technology. The AI industry has seen rapid growth since 2015. In the light of the market projection, by 2018, market size of AI is expected to achieve 270 billion CNY.

In recent years, the application of AI and “pan-entertainment” (multiple forms of entertainment including games, TV shows, movies and animations etc. branched from the same celebrity-themed intellectual property) are gaining familiarization and acceptance by the public.
In China, “Pan-Entertainment” is widely recognized as one of the “Top 8 internet hot trends” now. Smart AI model training can generate like-for-like models of celebrities or their literature. The focus of project PAI is exactly on the integration of AI and entertainment.
PAI enables creation of virtual characters, which can be applied in the movie and gaming industry. By commercial collaboration with celebrities (or the business entity that manages a celebrity), AI-powered digital clones of celebrities can also be created.
Different from common applications of AI such as daily chore/routine assistants (such as Siri) or in medical industry or in manufacturing, Project PAI aims to promote and innovate AI applications in the entertainment industry. For instance, PAI opens more interaction possibilities between celebrities and their fans through the use of intelligent virtual characters. This will in turn promote the growth of fans economy.
2、 Innovative Solution ： （Scores: 45/50）
(1) ObEN PAI Overall introduction
· The combination of AI and Blockchain
Based on official web publication and the whitepaper of Project PAI, we observed an inseparable relationship between PAI and ObEN. As partners, they work together to develop the PAI Network and relevant applications.
Founded in 2014, ObEN is headquartered in California. In 2017, by Series A investment funding size, ObEN ranked №1 as the most valuable startup company in south California. In the same year, ObEN also won the Partick Soon-Shiong
Innovation Awards from Los Angeles Business Journal. In the subsequent year of 2018, ObEn was amongst the Top 3 at the Entrepreneurship World Cup 2018 in Silicon Valley.
To date, ObEN has obtained investment funding from a number of well-known institutional investors including Tencent, Softbank, K11 Shanghai, HTC Vive , CMC and many other global business entities. ObEN, as an AI tech company, encompasses AI, AR and VR realms. So far, ObEN has registered 18 patents on its Personal AI products in U.S and exclusively owned the intelligence rights of those patents.
There are three crucial elements for the development of Artificial Intelligence are comprised of algorithm, computational power and data. Now, the major obstacles to AI development are computing power and data. Although PAI inherits the algorithm model from ObEN, computing power and data access are yet to be harnessed. The blockchain protocol of PAI adopts proof-of-work consensus, which collates fragmented computational resources from third parties to manage the increasing demand for computational power. Data access wise, despite the global explosive growth of total amount of data, the majority of usable and organized data is often possessed by large corporates while some other valuable data is isolated from access in hands of individuals. Therefore, the PAI blockchain network promotes and rewards users to participate by storing their individual data on-chain, and subsequently create value through the PAI network.

· Development approaches of the technology
Data to blockchain interface and smart contracts: Enable users to record data on the block and develop smart contracts interface. This will form the backbone source code of the PAI blockchain.
Application on the PAI blockchain: collaboration with business partners, actualize applications scenarios of different industries on the PAI blockchain.
Blockchain upgrades and evolutions: On the basis of the backbone blockchain, personal data and smart contracts, continue to develop ways to improve efficiency of the blockchain and iterate for more refined AI modules (e.g. POUW、Edge Computing) and provision of Developer’s API kit.
【Comment】：
The application of blockchain enables decentralization of data sampling, more efficient data distribution and circulation, and attaches economy value to data. The value of data is eventually returned to participants as rewards. The blockchain solution also gathers discrete and idle computational power from individuals to contribute to AI algorithm execution. This method drastically reduces computing cost. As obstacles on computation and data collection are eliminated, efficiency of AI is significantly enhanced to enable real-world applications.
(2）“Data Pointer”+“ Torrent network”, The Guarantee of Data Security and Anonymity
All PAI coin transactions are accompanied by data pointers, therefore, coin transactions can also be used to convey data. This is made possible by a “Torrent” based data storage network which operates in parallel with the PAI MainNet. Every PAI coin transaction can include a reference to a particular piece of data on the Torrent network, which allows data transactions between all parties to remain secured, anonymous and direct way. The encryption of message delivery ensures that data transaction can only occur when the sender willing to share data with the specific receiver who is also willing to receive.
This system shares data by means of using cryptocurrency, several advantages are as follow:
· Data transactions are not necessary bundled with public keys： In other words, all the activities leave a footprints on the blockchain and are easily traceable in any case of malicious usage.
· Data transactions are anonymous：All the data is transacted with PAI coins using individual public keys, therefore, it allows all transactions remain in a secured and anonymous status.
· It ensures that data is always accessible: Data is stored in BitTorrent network; thus, data will be always here to stay perpetually even if application developers no longer operates the system.

This two-tier system allows individuals to maintain control of their own digital identity and individual data profile. When developers create applications on the blockchain, they can use this data transaction system as well. That is to say, all data must be stored in Torrent network instead of being stored in traditional centralized servers. Let us imagine a worst-case scenario such as server destruction or business permanent closure, thanks to the decentralized storage, individual users still can access data.
(3）PAI’s Ecosystem — — Two-level structure of cryptocurrencies

PAI’s ecosystem is built on an AI distributed platform powered by a public blockchain protocol. ObEN and other developers will use the PAI platform to develop dApps. There are three types of roles within the ecosystem, which include miners, authenticators, and customers. Miners contributes their computing power gain PAI coin rewards. Authenticators gain PAI coins as rewards by verifying transactions. Consumers use dApps to perform activities such as socializing, dating, shopping and healthcare etc.

The PAI platform accepts a two-level structure of cryptocurrencies to keep the blockchain ecosystem and end-user experiences separate:
· The native and decentralized PAI Coin by Project PAI.
· Dedicated application-level credits, which can be designed by people and organizations for their own applications.
【Comment】：
Project PAI is systematically designed to service the whole ecosystem. Miners are rewarded by contributing the necessary computational power for AI development. DApps on the PAI platform attract users to participate and contribute data, which feeds into the PAI neuro network. This data feeding process provides machine learning training material, allowing the neuro network to further evolve in excellence.
PART TWO. Team Analysis(Weight 30%,Score 26.4)
1.The Founding Team (26/30)

Dr. Adam Zheng, co-founder and COO of ObEN, was also the co-founder of Baihe. com which is the largest dating platform of China. Before then, Dr. Adam Zheng was Venture Partner of US Lightspeed investment, director of Tongfang Co. , investment manager of Newbridge Capital. Dr. Adam Zheng has invested in BestTVNewMedia (600637), STAR Group Limited, New Silkroad Group.
Adam received his Master of Environmental Science from Tsinghua University and his Ph. D in Environmental Engineering from UC Davis and a Master of Financial Engineering from UC Berkeley.

Nikhil Jain is the cofounder and CEO of ObEN. Prior to ObEN, Nikhil worked at a healthcare company, Kaiser Permanente, developing electronic medical record applications. He previously cofounded two start-ups: “On Green”, a B2B marketplace for cleantech, and “Up and Running Software”, an open source software development company. Nikhil has an MBA from the University of Southern California, and a B.S in Electrical Engineering from Pondicherry University.
【Comment】:
The founding team has excellent academic background and successful entrepreneurial experience. Among them, Adam Zheng’s entrepreneurial experience in baihe.com, as well as a series of investment experiences will bring a lot of resources to this project for business development purposes.
2.Technical Team (32/40)

According to the whitepaper, the blockchain laboratory cofounded by Project PAI will be led by Alex Waters, who is the core developer of Project PAI and a major problem solver on a series of core technical issues of blockchain.
According to the description, , Alex was the core developer (now Bitcoin Core) of Satoshi Bitcoin Client from 2010, and also one of the original developers of Bitcoin. He was also the founder of CoinApex which is a blockchain Angel investors. He also founded Coin.co, a Bitcoin payment processing facilitator, and Coin Validation, a due diligence service for Bitcoin businesses.

In the area of artificial intelligence(AI) technology, the chief engineer of the technical team, Dr. Mark Harvilla, graduated from Carnegie Mellon University with a PhD in electrical engineering. He has been responsible for OBEN’s overall technology research and development. The whitepaper shows that he conducted research on AI technology at OBEN as early as 2014 and has developed AI singing technology.
In addition, the technical team also include Dr. Wang Rui Zhe who is the head of computational vision, Dr. Pierre Lanchantin who is the head of computational acoustics, Dr. Taehwan Kim who is the head of the special effect，and Dr. Elnaz Nouri who is the head of natural semantic understanding .
【Technical reserve】：
In terms of technical reserve, ObEN’s technical team, which is established in 2014, also has a considerable technical know-how in the AI field. Team members have published numerous academic papers on international tech journals. For instance, Dr. Taehwan Kim has published more than 10 papers in the machine learning field; Dr. Wang Rui Zhe has published 14 paper in the field of computational vision; Dr. Mark Harvilla and his team has published or joint published 169 papers in computational acoustics. All in all, the team has in total an accumulation of 200 verifiable academic papers.
【Comment】:
For blockchain experiences, as the first batch of blockchain experts, Project PAI blockchain laboratory’s principle Alex has rich experience in blockchain development. In the field of AI technology, the technical team members are from elite universities and has a solid technical foundation. Furthermore, the R&D on AI started as early as 2014. Overall, the technical team is a solid, mature and stable development team.
3. Investors and consultants (30/30)

ObEN has attracted many top investment institutions from around the world, including Tencent, Softbank, Cerberus, HTC VIVE X, South Korea’s SM Entertainment. It also assembles Gordon Cheng, LSM and other famous Angel investors.

ObEN’s advisory team is made up of top experts from elite universities, such as Abeer Alwan who is a speech recognition specialist at the University of California, Los Angeles; Walter Greenleaf, a behavioral neuroscientist at Stanford University; Sun Yajun who is the professor of linguistics at UCLA;
Kevin Knight, the professor at the institute of information science at the university of southern California, who is also a recognized pioneer in machine translation and a leading proponent of statistical machine translation. Last but not least, chairman of South Korea’s largest entertainment company SM, Lee Soo-man.
【Comment】:
Many excellent blochchain entrepreneurial firms can get investments from top blockchain incubator and blockchain investment funds. However, ObEN is a rare case because it is mainly invested by Tencent， Softbank and alike, it shows us the recognition from mainstream technology giants and venture capitals. Besides a group of scientists who can help the project with technical issues, the chairman of SM, LSM also brings huge benefit in marketing and business applications, whereas the company AI-Stars which Oben and SM cofounded will build personalized imaged AI for all celebrities of the SM corporation, and market them in Japan, South Korea and Southeast Asia.
PART THREE. Ecology Construction(Weight 30%, Score 25）
1. Community Ecology (50/60)
(1) Media Channel Integrity (25/30)
In terms of community building and social media channels, PAI has covered several mainstream social medias such as: Facebook / Twitter / WeChat / Medium and so on. On community building, PAI currently has chat groups on four mainstream social networks, which are Telegram / Wechat / Kakao / Line , the statistics are as follows:

(2) Community Activity (25/30)
At present, the community construction of Project Pai is mainly focused on the Asian market. Currently, the largest and most active communities are on China’s WeChat groups, with about 60 groups of 26,000 followers, followed by Telegram / Kakao for Korean. However, Facebook / Twitter / Telegram communities for English speaking countries show a huge lack in activity compared to Project PAI’s Chinese communities. Meanwhile, the community in Japan and Taiwan are also relatively small. Generally, US and EU blockchain projects attach great importance to medium.com, whereas the content and subscription number of Project PAI on medium are relatively low.
【Comment】:
At present, the community construction of Project PAI is mainly focused on China and Korea, among which Chinese community is huge and heated. On the other hand, the communities of other languages are Relatively under-developed, and still needs to be improved.
2. Business Ecology (40/40)
At present, Projet PAI has many important commercial partners, including Tencent, Softbank, Indonesia Lippo Group, South Korea S.M entertainment, and so on. The following information on business co-operations is gathered from reports of public sources:
(1) Tencent, the largest investor of ObEN, is using PAI technology to develop personalized AI products for some of its departments. For example, WeChat users can easily generate personalized AI images for social activities in the virtual world by using ObEN’s official WeChat channel: http://m.ikanchai.com/pcarticle/161354
(2) ObEN’s another major investor is SB Next Media Innovation Fund which is the VC fund under softbank south Korean who focused on AI. ObEN is the first investment project of this particular Fund. Softbank will use its global resources to help ObEN’s PAI technology. https://m.ithome.com/html/297739.htm
(3) ObEN and South Korea’s largest entertainment company S.M entertainment cofounded Al Stars which is the first AI celebrity agency. It just signed the AI copyright of all the stars under SM entertainment in May 2017. It also signed an agreement with wildly popular idol group SNH48. ObEN will use its PAI public chain to create exclusive virtual images of the wildly popular SNH48 girl idol group. In the future, all the stars’AI figure will interact with their fans on the PAI blockchain. https://mp.weixin.qq.com/s/aAvUP0iXdN6jiyrj_JOabA

(4) ObEN has signed a formal agreement with Southeast Asia’s corporate giant Lippo Group , the latter will use AI technology of the PAI public chain to develop AI general practitioner and other AI blockchain project in medical insurance area. It will also use the PAI public chain and PAI coin for fund raising. According to public sources, Lippo Group is one of the largest financial holding consortium in Indonesia. It controls publicly listed enterprises from more than 20 countries. As a result, AI general practitioners will be launched in hundreds of chinese and southeast Asian hospitals which the Lippo Group controls. https://mp.weixin.qq.com/s/5aT7bFmpwcCy_S3aB0kJjQ
(5) ObEN has completed a B round financing of 10 million USD in convertible bonds from K11. K11 belongs to Hongkong’s New World Development Company Limited, which owns retail brands such as Chow Tai Fook and K11. Mr. Zheng Zhi Gang, the founder of K11, used PAI’s technology to create his own Personal AI. He also used his PAI to create promotional video of the K11 art palace. K11 is also working with ObEN to further implement retail applications of PAI. https://mp.weixin.qq.com/s/OOjWR5SEOzyhe2ky2jtitQ
(6) ObEN will jointly operate a blockchain laboratory with two chinese public chain project BTM and QTUM.
https://mp.weixin.qq.com/s/jejbYtTVee-akNgcAjdh-g http://www.8btc.com/bytom-ObEN-1226
(7) PAI mobile APP — Paiyo

Project PAI already has a beta version of its mobile APP, allowing users to create their own personal AI by taking selfies and short video recordings.The official version will also be available shortly. You can also apply for a selective testing of the beta version. https://paiyo.com/coming-soon/
【Comment】:
The ObEN — Project PAI is carrying out commercial co-operation and promotion in the area of entertainment, medical treatment, blockchain technology among other fields. If PAI’s cooperation with Tencent can lead to its implementation and integration into WeChat ecosystem, there will be a huge number of users. By partnering with South Korea’s S.M. entertainment, it can also leverage the many stars of S.M. to expand its influence. The cooperation with BTM and QTUM will enhance one another in blockchain technology itself.
PART FOUR. Development Progress (Weight 10%, Score 7)
1. Promise fulfilment (40/50)

According to the project’s development plan released on the official website, the launch time of its mainnet was set in the first quarter of 2018, but the actual launch time was on June 5, which is the second quarter of 2018. The PAI wallet was released at the same time. In terms of development progress, it is a little behind the roadmap’s schedule. However, the delay is due to fulfillment of the American SEC requirements.
Here we layout the relevant regulations of SEC:
1. Fundraising is restricted to private offering for qualified investors , public offer is not allowed. Therefore the white paper and relevant information can not appear on media.
2. Utility-token is a form of digital asset, only utility-token can be traded. Therefore, crypto-currencies can only be clasified as a utility-token if the following conditions are met:
· The blockchain mainnet which generates the token has already been launched.
· The blockchain mainnet has at least one DApp running which allowed users to use the tokens immediately once they get them.
It is known that the PAI has met the above conditions in the second quarter, including the launch of the mainnet and the running of DApp on the blockchain.
【Comment】:
The project was slightly delayed compare to the roadmap released earlier. However, according to our investigation, the delay is due to SEC compliance purposes, where the launch of mainnet and running of DApps are prerequisites. Therefore, the promise is kept. Follow-up performance tracking of post-launch progress will be conducted accordingly.
2. Code Qualicy (30/50)
According to the white paper, the PAI chain extends the capacities of the original bitcoin code, adding databases and smart contracts functionality. It is reported that Project PAI will make public the source code of PAI chain by the end of June 2018, so we are not able to read its code on Github yet.
【Comment】:
The source code has not been made public yet. However, given that core developer Alex Waters was once a member of the bitcoin development team, we will score the code quality as 30 points. We might adjust the score after the code is released.
PART FIVE. Token economy(Weight 10%, Score 6.8)
1. Financing situation (18/30)
According to relevant regulations of SEC, fundraising is restricted to private offering for qualified investors , public offer is not allowed. Therefore PAI has not disclosed any fundraising information to the public yet. However, according to various sources of information, it is widely known that the total amount of financing is approximately $100 million to $150 million from the end of 2017 to the end of March 2018 .
【Comment】:
Given that this financing amount is correct, it is relatively large. Considering PAI is a public chain project and an AI project, the development period is long, therefore this financing amount is acceptable.
2. Liquidity (15/30)
At the time of writing, PAI has already been listed on Huobi international site in June 29th, and trading has started on July 2nd. Besides Huobi, Lbank has also listed PAI coin. On the first day of trading , the trading volume has reached about 0.5 billion, ranking top 25 in all cryptocurrencies. For a newly listed project, this market performance indicates its recognition from the public.
【Comment】:
In terms of liquidity, supporting exchanges are few. However, considering the fact that PAI has been supported by top exchanges like Huobi, a neutral score of 15 is given under the current circumstances and may be adjusted according to the actual situation in the future.
【Friendly reminder】:
ObEN PAI is a public chain and it is not based on the ERC20 token of Ethereum. At present, the mainnet has been launched, and there are lots of look-alike tokens on Ethereum with the same symble as “PAI”. Investors should identify them carefully.
3. Token Holding Structure (35/40)

Oben-PAI’s token is PAI, totalling 2.1 billion, of which 35% are owned by investors; 15% by project developers; 15% goes to contributors to the PAI project development; 5% goes to the PAI foundation, and the final remaining 30% comes from mining, with the first block awarded at 1,500 PAI token, after which the number will be halved for every 210,000 blocks or about every four years. In terms of token holdings, the tokens holded by PAI project developers, PAI ambassadors, and the PAI foundation will be locked up for a year.
【Comment】:
The holding structure of PAI token is reasonable. Besides investors, 15% share allocated to the project development team is reasonable, the remaining 50% share is allocated to miners, PAI contributor and PAI foundation who are important pushers of PAI project development in the future. Here we determine the allocation structure of PAI token reasonable and helpful to the long-term ecological development of the project.
Summary:
Based on the above rating analysis, PAI project positions itself as an AI public chain, aiming to build an application development platform and promote the integration of blockchain and AI. Accurate industry positioning leads to effective improvement of efficiency. A solid team background, abundant industry resources, top level of investors and consultants, etc., these are all merits of PAI project.However, the codes are not publicized yet, and the communities of other languages is underdeveloped. Therefore, a score of 85.2 and rating of A- is given.
As a public chain, PAI also faces the competition from other AI projects. The subsequent technological development, community construction and ecological implementation are vital to the project.Under the current circumstances, relying on the abundance of resources of the team, the PAI ecosystem is gradually developing and we look forward to subsequent expansion to European and American market as the community develops. The codes should be open-sourced as soon as possible. Providing that the capability of the team is optimized and the resources of the ecosystem is utilized, a subsequent raise of the rating is expected.