Prospect Whitepaper

Enter Decentralized Fantasy Sports (DeFS), Join Us Today!

Disclaimer: The contents in this whitepaper are subject to updates and changes. Information provided should not be construed as a commitment, promise or guarantee by Prospect or any other individual or organization referenced in this whitepaper.

This document does not constitute an offer or solicitation to sell shares or securities. It does not constitute or form part of and should not be construed as any offer for sale or subscription of or any invitation to buy or subscribe for any securities nor should it or any part of it form the basis of or be relied upon in any connection with any contract or commitment whatsoever. Prospect disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from reliance on any information contained in the whitepaper.

The opinions expressed in this whitepaper is not a recommendation to buy or financial advice, it is strictly informational. Do not trade or purchase any tokens, companies or entities based solely upon this information. Any purchase involves substantial risks, including but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. Investors should conduct independent due diligence, with assistance from professional financial, legal and tax experts, prior to making a purchase.

Information prepared within this whitepaper is derived from sources we believe to be accurate and reliable. However, such information is presented “as is” without warranty of any kind. The graphs, charts and other visuals are provided for informational purposes only. None of these graphs, charts and visuals should be relied upon to make a purchase decision.

The information contained in this document may include, or incorporate by reference, forward-looking statements, which would include any statements that are not statements of historical fact. No representations or warranties are made as to the accuracy of such forward-looking statements. Any projections, forecasts and estimates contained in this document are necessarily speculative in nature and are based upon certain assumptions. These forward-looking statements may turn out to be wrong and can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors, most of which are beyond control. It can be expected that some or all of such forward-looking assumptions will not materialize or will vary significantly from actual results.

1. Executive Summary

1.1 Introduction

Prospect is a Decentralized Fantasy Sports (DeFS) application that enables users to purchase Athlete NFTs that earn Prospect Tokens ($PROS) based on their real-life in-game performance. Prospect’s “play-to-earn” gaming platform is built on the Ethereum and Polygon blockchains. Prospect aims to bring blockchain into mainstream fantasy sports by attracting both crypto and non-crypto users by leveraging the underlying blockchain technology to provide true-ownership, digital scarcity and cryptocurrency rewards.

Prospect uses fungible and non-fungible tokens.

Fungible

Non-Fungible

The fungible tokens are called Prospect Tokens or “$PROS”, a token based on the ERC-20 token standard. It will act as the official currency in the ecosystem when purchasing goods and services within the in-game marketplace, as well as governance.

The Athlete NFTs, represent the athlete and can be “staked” in a user’s roster to earn $PROS based on their real-life in-game performance. NFTs are based on the ERC-1155 token standard.

Unlike current fantasy sports applications, the distribution of rewards in the form of $PROS is executed via Prospect’s proprietary “Proof of Performance” or PoP protocol. The goal of the PoP protocol is to enable owners of the NFTs to share in the success of their favourite athletes.

By tying the value of the NFT to the underlying athlete’s real-life in-game performance, Prospect is enabling users to gain fundamental exposure to athletes in a novel way.

1.2 Rationale

If sports fans want to share in the success of athletes today, their only options are to purchase collectibles such as trading cards, sports memorabilia and most recently NFTs. Existing NFT offerings such as NBA Top Shot are a digital analog for traditional collectables. The value of these are subjective, volatile and disconnected from the underlying performance of the athlete. Prospect aims to provide sports fans the ability to gain exposure to the real-life in-game performance of these athletes through a DeFS application that distributes cryptocurrency rewards based on Prospect’s proprietary PoP protocol. This enables sports fans to share in the fundamental value of an athlete, their performance.

The team began working on conceptual foundations of Prospect in 2018. At the time, the adoption of NFTs and crypto assets was still not mainstream. Since then, the rate of consumer adoption has exploded. For instance, MetaMask, a cryptocurrency wallet, surpassed +10mm MAUs in August 2021, a nineteen fold increase versus the previous year [1]. Sports focused NFTs have taken-off as well, driving +$750mm in secondary sales since July 2020 [2]. This growth has validated the appetite for a decentralized fantasy platform like Prospect.

At a macro level, the inflows into cryptocurrency continues to be robust with the launch of mainstream consumer facing applications and institutional adoption. The total market cap of the cryptocurrency market has grown from ~$21mm in 2015 to +$2.5tn in August 2021 [3].

Due to the rise of social media and the ability for athletes to engage directly with fans, athletes are becoming more popular than the teams they play for. For example, Lebron James has more than +144mm followers versus the LA Lakers with around 21mm. Fans are looking at new, innovative ways to engage with athletes.

The proliferation of play-to-earn gaming models driven by Layer 2 scaling solutions for Ethereum have allowed crypto enthusiasts and web 3.0 gamers to trade and mint NFTs without exorbitant transaction fees. Axie Infinity, a gaming experience inspired by Pokémon has topped 1mm daily active users (DAUs) and generated $485mm in revenue from July to September 2021. We expect momentum in play-to-earn gaming to continue, and support the viability of our concept. Andrew Wilson, CEO of Electronic Arts (EA) said their 3Q21 earnings call that "play-to-earn games are the future of gaming". [4]

The development and maturation of key platforms and technologies such as Ethereum, Polygon, smart contracts, NFTs, digital wallets and digital payments has enabled the key building blocks required to bring Prospect’s decentralized fantasy sports application to market as a mobile-first experience.

1.3 Total Addressable Market (TAM)

Our TAM assumptions are driven by the scope and growth of two adjacent markets:

Online Sports Gaming: US market estimated to grow from $1.5bn in 2018 to $25bn by 2030 approximately a 40% CAGR [5]
Fantasy Sports: US market is expected to grow from $18.6bn in 2019 to $46.6bn by 2027 approximately a 14% CAGR [6] and 60mm people in the US and Canada play fantasy sports [7].

Our target market is North American Gen Z and Millennials, when we ladder that down to those who play both fantasy sports and place sports bets, our Serviceable Obtainable Market (SOM) is 23mm.

1.4 History

The core team at Prospect has been focused on testing, simulating and validating core concepts and technologies. We’ve run a series of tests and market surveys to assess consumer preferences, needs and comprehension. We then ran a simulation with a series of participants that fit our target demographic to test game mechanics, user interactions, product features and pricing structures. We validated three core themes:

VALUE: Users are looking for new ways to engage and share in the success of their favourite athletes. The value of existing offerings (memorabilia, trading cards, NFTs) were disconnected from intrinsic value and are highly speculative.
FUN: Users indicated that the primary reason for using Prospect would be for fun and displayed a strong willingness to recommend the product to friends (conceptual NPS score of 8.2).
REWARDS: There are many different fantasy sports applications that use different rewards systems, these include cash, prizes, points and gift cards. Through our research we were able to determine that crypto-based rewards tied to the project were the most desirable as they represented a vested interest in the project's success.

1.5 Decentralized Fantasy Sports (DeFS)

Prospect is reimagining fantasy sports by creating a Decentralized Fantasy Sports (DeFS) application that enables users to purchase Athlete NFTs that earn Prospect Tokens ($PROS) based on their real-life in-game performance.

Unlike traditional fantasy sports applications, the distribution of rewards is decentralized through the use of smart contracts via Prospect’s proprietary protocol “Proof of Performance” or PoP. The decentralized nature ensures identity, ownership, security and integrity.

We believe DeFS offers a superior experience vs. traditional fantasy sports as it allows users to benefit from Prospect’s unique “play-to-earn” game mechanics. Not only will users enjoy aspects of traditional fantasy sports such as drafting, trading and managing player rosters but also upside in through the awarding of $PROS.

Prospect’s DeFS platform is also sport agnostic and the team’s long-term vision is to provide fans globally the opportunity to purchase NFTs of their favourite athletes across all sports. Unlike traditional fantasy sports where each sport is siloed from another, Prospect’s PoP protocol can be adapted to any sport with access to reliable and accurate data feeds.

Sports leagues today are governed by monolithic, centralized corporations that, by design, prioritize profits over the interests of fans and athletes. Prospect believes in governance: $PROS will be used as a governance token that will provide users a voice in the future direction of the protocol and Prospect’s DeFS application.

The move towards decentralization has already started to gain traction across various industries as trust in centralized organizations has been eroded through misaligned incentives and gross mismanagement. This is most apparent in finance where DeFi adoption has accelerated. In 2020, the growth of DeFi took the financial world by surprise and a commonly used measurement called “Total Value Locked” or TVL grew by 14x in 2020 and is on pace to triple in 2021 to $81.9bn [5].

The team at Prospect believes fantasy sports is the next use case that’s ready for decentralization.

1.6 Foundations Of An In-App Marketplace

Prospect’s value proposition to users is the ability to “play-to-earn” $PROS through the management of their player portfolio. To realize this, users need the ability to: purchase NFTs, trade NFTs and convert rewards.

Users can purchase randomly generated packs of NFTs directly from Prospect using electronic payments (e.g. credit cards) and major crypto currencies (BTC, ETH, USDT, etc.). NFTs purchased from Prospect are primary market transactions and represent newly minted NFTs.

Users can buy/sell/trade their existing NFTs via the Prospect marketplace. At launch, Prospect will function as a primary market provider of NFTs. As the user base and platform grows, Prospect's function will transition from a liquidity provider to a peer-to-peer marketplace that functions as an auction house where secondary market transactions take place. All secondary market transactions are executed with $PROS and include a transaction fee. In addition to Prospect's secondary marketplace, users will be able to buy/sell their NFTs on third party marketplaces (OpenSea).

Prospect will provide users the ability to convert $PROS through a decentralized exchange (QuickSwap) and centralized exchanges in the future. $PROS is based on the ERC-20 token standard and will be able to be transferred to compatible 3rd party wallets (Trust Wallet).

Finally, users will be able to purchase additional services from the Prospect marketplace. These services include the ability to modify and customize NFTs using $PROS through the purchase of “augmentation kits”.

1.7 Use Cases

There are six key use cases for Athlete NFTs and $PROS that Prospect intends to support.

Athlete NFTs:

DIGITAL COLLECTIBLE: NFTs are digital collectibles that represent an athlete in the form of a cube. This cube has six unique faces that display various pieces of information including images, the athlete’s information, statistics, staking rewards and ownership history. This collectible can also be personalized to reflect the owner's personal taste.

STAKING: NFTs can be staked within a user’s player portfolio to earn $PROS based on the statistics the athlete accumulates in real-life. The quantity of $PROS that are earned while the NFT is staked is based on Prospect’s proprietary PoP protocol.

Prospect Tokens ($PROS):

MEANS OF EXCHANGE: Prospect will have an in-app marketplace (primary and secondary market) where users can buy/sell their NFTs with other users. Users use $PROS to buy/sell NFTSs on the platform.

GOVERNANCE: $PROS is a governance token that allows holders to participate in governance decisions of the application. Users will be periodically asked to submit proposals for changes that will be voted on by $PROS token holders.

STAKING: Each Prospect user will be initially limited to staking five players within their player portfolio. Only players that are staked have the ability to earn $PROS. Users can hold an unlimited number of NFTs in their wallet or “bench”. These players can be swapped into an active staking spot at any time before a game starts. A user can stake $PROS to open additional active staking spots which expands the size of their player portfolio.

SERVICES: NFTs can be augmented with various modifications and customizations using $PROS. This allows users to express their own unique preferences with their NFTs and these modifications are immutable.

1.8 Future Plans

One of the unique characteristics of Prospect’s DeFS platform is that it is built to offer multiple sports within a single environment. Within a user's player portfolio, athletes across a variety of sports can be activated at the same time. The initial roll-out will focus on Basketball. The following sports will be added in the future:

American Football
Basketball
Hockey
European Football
Baseball
Cricket
Golf

By broadening Prospect’s offering in terms of sports, we are able to address a larger TAM as we cater to more geographies and demographics.

From a product perspective, future plans will be to introduce social and gaming offerings to improve the overall user experience. Details will be shared in future versions of our whitepaper.

2. Technology

Blockchain technology is used to record the ownership of tokens and allow owners to buy/sell/trade them P2P at the user’s discretion. Here is a high-level overview of the architecture.

The Prospect Cloud is our backend and will be hosted on a cloud service (AWS). It will be in charge of connecting the Prospect app and the blockchain.
The cloud will talk to smart contracts, wallets and read blockchain events. A mobile application is where the user will interact with the smart contracts and our server
Smart contracts will interact with the wallets and generate blockchain events.
Tokens can be transferred between custodial and non-custodial wallets.
Some smart contracts will be available for users to trigger directly, without the app.

2.1 Blockchain protocols

Two different blockchain token standards will be integrated into Prospect’s application.

ERC-20 for $PROS
ERC-1155 for NFTs

Our project will use the Ethereum and Polygon blockchains. These are the key considerations in this decision:

Ease of Development: Ethereum has been built with flexibility in mind and has the largest number of developers which enables Prospect to leverage new innovative and well-established standards, best practices, support and development.

Robustness: Ethereum remains one of the most robust blockchain protocols and its widespread adoption makes the network validated by many and hence more secure.

Interoperability: Ethereum is a protocol, a base layer on top of which all applications can build and interact with each other.

Blockchains are based on three pillars: 1) security, 2) decentralization and 3) scalability (or throughput). Each of these pillars often comes at a cost to the other.

The primary issues with Ethereum today are around scaling. Ethereum has historically emphasized security and decentralization at the cost of scalability. Ethereum continues to put lots of effort into improving scalability which we anticipate in the future.

But what about the fees?

At present date, operating on Ethereum is prohibitive due to high fees. That’s why we are going to use Polygon POS as a Layer 2 solution. Our smart contracts will be prepared from the beginning to handle the conversion of NFTs and $PROS from Ethereum to Polygon and vice versa. This technique is used by many other major projects.

Widespread Support

Both Ethereum and Polygon are compatible with the most popular NFT marketplaces and mobile wallets, such as Trust Wallet and Metamask. They are also well accepted in centralized exchanges (Coinbase, Kraken, Binance, OpenSea and others).

2.2 Non-Fungible Tokens (NFTs)

The team at Prospect has chosen the ERC-1155 standard over the ERC-721 standard for the following reasons:

2.3 Architecture

The Prospect protocol is comprised of three layers:

Consensus layer:
Used to track the ownership of NFTs and $PROS. Prospect will use the Ethereum smart contract to maintain a ledger of ownership for NFTs and $PROS.
Creation layer:
NFTs are minted and held in the owner's Prospect wallet or can be transferred to the owner’s third party crypto wallet.
Distribution layer:
$PROS are distributed to the owners of “staked” NFTs through the “Proof of Performance” PoP protocol. The total statistical production of a sports league represents the total work that has been performed by the athletes. As users “stake” their NFTs, they begin to accumulate stats, this represents the work being done by the NFT. The owner of the NFT is then distributed their rewards in the form of $PROS based on the work that their NFTs have performed.

2.4 Custody

We will use a mix of custodial and non-custodial wallets to store the tokens (both NFTs and $PROS). All users will be able to send tokens from custodial to non-custodial wallets freely, and vice-versa. Tokens will be able to be stored in a cold wallet or traded with other users without the intervention of Prospect.

Custodial wallets will make the app much more accessible for users that are non tech-savvy, and we will be able to recover their account without them having to remember a very long string of text (just like crypto exchanges like Coinbase or Binance).

Custodial wallets will also allow Prospect to avoid blockchain fees and make the ecosystem affordable when operating at scale. This will allow Prospect to deliver a much more complete experience and develop features fast, delivering a lot of value to the owners of our NFTs and accelerating the project.

Security is one of the main tenants when planning our system, and the custodial wallets will be secured in a professional and well-thought manner.

2.5 Payments

Payment channels are key for Prospect as they allow the purchase of NFTs. Prospect plans to accept electronic payments via card processing platforms (e.g.; Stripe) and cryptocurrency (e.g.; Coinbase Commerce).

3. Economy

3.1 What is an NFT?

The non-fungible tokens or “NFTs”, represent the athlete and can be “staked” in a user’s player portfolio to earn $PROS based on their real-life in-game performance. NFTs are based on the ERC-1155 token standard. NFTs can be purchased from Prospect or traded for on the Prospect marketplace and other third party marketplaces.

A Prospect NFT is represented in the form of a six-sided 3D cube that’s interactive, customizable and transferable.

Six Sides of an NFT

In addition to having the ability to customize the NFT by signing it or adding a personal message, users can purchase Augmentation Kits that are applied to the entire cube and are immutable. There are two types of Augmentation Kits that will be initially available through the Prospect marketplace:

Holographic Effects: This will allow the owner to change the color of the background of the cube as well as apply different finishes to the cube such as a Foil Finish, Matte Finish and Gradient Finish.
Lighting Effects: This will allow the owner to modify the type of lighting effect around the border/edges of the cube.

3.2 How are NFTs Created?

In essence, an NFT is the tokenized statistical production of an athlete’s career. As statistical categories are recorded differently for each sport, we will stagger the launch of multiple sports over time.

To start, Prospect will mint the Top 200 NBA Athletes based on their past and projected performance. A list of all the athletes and their corresponding rarities/probabilities can be found on here.

There are a fixed supply of 50,000 Athlete NFTs for the NBA. Prospect will mint new Athlete NFTs as players retire or leave the league and new rookies enter the league.

3.3 How is scarcity and rarity for NFTs determined?

There are three key factors that drive the scarcity and rarity of NFTs: past performance, projected future performance and popularity.

Prospect will use the cumulative statistical production of a player, their consensus forecasted production as published by leading fantasy sports platforms (ESPN, Yahoo, CBS, etc.) and an athlete’s social media presence (number of IG followers, number of Twitter followers, etc.). All athletes will be given a score based on these factors which will be used to determine rarity.

Rarity Tier and Corresponding Supply

3.4 Which players will be issued as NFTs?

Athlete NFT’s will be issued for the Top 200 players in the NBA, there will also be limited quantities of prospective athletes issued around events like the draft or combine.

3.5 NFT Distribution and Allocation

Any unclaimed or unsold Athlete NFTs will remain in the Prospect Treasury.

3.6 What are $PROS?

Prospect Tokens or “$PROS” are fungible tokens based on the ERC-20 token standard. They will act as the official currency in the ecosystem when purchasing goods and services within the game and marketplace. Additional use cases include staking as well as governance.

3.7 $PROS Creation and Quantity

$PROS are earned throughout a sports season via the “work” performed by the athletes. Prospect’s Proof-of-Performance protocol translates this work into “power”. To ensure a scalable mining process and equal opportunity for all users, we have modelled our mining algorithm around the concept of charging a capacitor [8]. Each Prospect mining block has a payout efficiency shown below:

Prospect utilize a logarithmic function that uses athlete's power to mine $PROS within a set of mining blocks. Each mining block contains a set of time constant. The time constant used in formulating Prospect’s mining model is the natural progression of a season. Mining efficiency is at its peak during the first 1/3 of the mining block - which means the athlete's power generated during this time horizon will yield more $PROS. The mining efficiency will reduce as time progress until the time constant expires and replaced by a new mining block.

At the end of every game day (11:59 PM PST), all active players’ in-game performance will be used to calculate the amount of energy they generate based on key performance attributes. In the case of basketball these attributes are:

Minutes
Points
Rebound
Assists
Three points made
Free throws made
Steals
Blocks
Turnovers
Personal fouls

The total energy generated will then be used to calculate the mining power and the total daily payout of the $PROS. As a result of the “work” performed, the owner of the Athlete NFT will be rewarded a proportional amount of PROS based on the amount of power the mining block has successfully obtained.

Each sports season will be broken into three segments, the beginning of the season, the mid season and the late season. Each segment of the season will restart the mining block, all $PROS that have not been mined within the previous block due to the lack of power will ease to exist.

By breaking the sports season into three segments, the platform enables an equitable mining experience throughout the season that reduces the barrier to entry for new users while rewarding early and experienced users.

3.8 PROS Distribution and Allocation

The total PROS supply will be capped at 1,000,000,000 and will be allocated as follows:

The initial amount of $PROS available will be limited until enough are earned by Athlete NFTs, this will add a scarcity effect to support the price of the tokens. Additional factors that will contribute to the price appreciation of $PROS include:

A growing number of users and staked Athlete NFTs that will make it harder to earn $PROS hence reducing the $PROS rewards paid per user and results in upwards tension to prices.
Staking effect, as users stake their $PROS to open up additional roster sports, $PROS are temporarily taken out of circulation which limits supply and supports token fundamentals.

$PROS will be mined at a rate of 10,000,000 $PROS / year equating to a mining life of 50 years. Once the mineable $PROS is exhausted, a vote will be triggered that will enable token holders increase the total supply of $PROS linearly at a rate of 10,000,000 $PROS / year.

3.9 $PROS Token Sale Stages

Prospect plans to raise money through two separate token sales. Purchasers of the Token Pre-Sale and the Strategic Sale are 100% locked for 3 years vesting with a 12 month cliff; while $PROS allocated to the Founders, Team, Advisors and Future Team are 100% locked for 3 years vesting and 12 month cliff.

3.10 Use of Proceeds for Token Sales

Use of proceeds for the two separate token sales will be used to grow the development team, build out the infrastructure for the gaming platform, marketing/promotion and other general corporate purposes.

4. Associated Risks and Challenges

4.1 Risks

It is the responsibility of any purchaser of NFTs or $PROS to inform themselves of, and to observe and comply with, all applicable laws and regulations of any relevant jurisdiction. Prospective purchasers of any NFTs or $PROS shall be expected to consider the risk factors identified in this section. If any of the risks or potential challenges were to materialize, they could impact Prospect’s operational performance and its ability to fulfill its role outlined in this whitepaper.

4.2 Potential Challenges

One of the main challenges in this project is the rate of adoption of new users. User growth enables Prospect to leverage the benefits of network effects, which increases the number of NFTs that are active and in circulation, which increases the number of $PROS in circulation, which in turn drives secondary market trading of NFTs and ultimately the consumption of $PROS through the use of services and other offerings. We are therefore focused on developing strong communities across the world with a strong focus on North America, where we believe the rate of adoption will be steeper due to the popularity of Prospect’s priority launch sports (Basketball, Hockey and Football). Sports fans are highly engaged across all forms of media including social media, forums, podcasts and chat groups, engaging fans through these channels and nurturing them through their journey will be important for sustained long-term success. The project success rate will be dependent upon the priority and preference of consumers and its ability to swiftly anticipate, identify and capitalize upon these priorities and preferences.

4.3 Cost of Transactions

Gas fees required to process and validate transactions on the Ethereum blockchain vary and at times can be expensive when the network is experiencing high volumes of transactions. The launch of Ethereum 2.0 is poised to scale ERC-20 and lower gas fees for all stakeholders. There are other transaction costs that pose potential challenges such as digital payment fees, crypto exchange fees and other costs related to transactions. The Layer 2 solution (Polygon) we will adopt will reduce these transaction costs.

4.4 Deprecation

Prospect operates in an emerging and disruptive industry that is undergoing rapid and dynamic development. This includes, but is not limited to, the development relating to the business itself, the underlying technology, and the regulatory and legal implications thereof. In order to minimize these risks, Prospect has made technological decisions to ensure cross-application interoperability. With respect to regulatory and legal implications, public knowledge and understanding of emerging technologies, such as distributed ledgers, smart contracts and other emerging crypto innovations are still limited and as a result, may be subject to new regulations. Prospect is committed to working with and educating regulatory bodies on the merits of its technology and the crypto industry broadly.

4.5 Data

The accuracy, integrity and reliability of statistical data is of paramount importance to Prospect’s PoP protocol. This data is required to validate work that’s been done by the athletes and to consequently distribute rewards in the form of $PROS. Prospect is partnered with Sportsdata.io, a licensed provider of third party sports data.

4.6 Security / Custody

Prospect’s application is reliant on the continuous and proper functioning of its technology infrastructure. Security risks include, but are not limited to, cyber-attacks, data theft, unauthorized use of data and other malicious interferences. Certain parts of the infrastructure may be outsourced to third parties. In such cases, Prospect is reliant upon these technology providers to mitigate and prevent these risks. Prospect will partner with third party custody providers to ensure security and ownership of digital assets.

5. Conclusion

Prospect is a Decentralized Fantasy Sports (DeFS) application that enables users to purchase Non-Fungible Athlete Tokens (NFTs) that mine Prospect Tokens ($PROS) based on their real-life in-game performance.

In the coming year, our team is dedicated to re-imaging fantasy sports and providing sports fans a novel way to engage and share in the success of their favourite athletes.

Join us today!