A few months ago, I was blabbering about a ridiculous idea to my friend.
‘’You know what, I wanna launch a meme coin on Buzo (my furry friend). We can cash out on his cuteness. Later, I told him that Shiba Inu has a whitepaper. So, we decided to read the paper and understand the logic behind building a community of shillers, neitzens and Shiba dog lovers. Well the community is not just limited to shilling or burning their supply. Turns out some of the proceeds actually go for Shiba Inu dogs that need support.
This is when I decided to understand types of technical and marketing papers in the crazy world of crypto. In this article, I will take you through the different types of whitepapers and how they have evolved in the last 5 years.
Types of Whitepapers
So there are four different kinds of whitepapers.
First generation, Second generation, Third generation and Fourth generation. Let’s dive in.
First generation whitepaper
These are academic in nature. You will see technical details like consensus flow, logical reasoning, arithmetic formulae and technical diagrams to help visualise the workflow.
Let’s take a look at Bitcoin’s equation from its paper.
Source: Tokenomics: The Crypto Shift of Blockchains, ICOs and Tokens — by Sean Au and Thomas Power.
This calculates the cumulative probability of the attacker not being able to catch up to the honest chain. q is the probability of the attacker finding the next block. p is the probability of an honest miner finding the next block.
Z is the number of honest blocks mined before q (attacker) can attack the equation on bitcoin. In a series of activities of miners and attackers, the Z is ahead. (Thanks to the difficulty in mining)
There are many technical projects out there trying to build scalable and trustless platforms. Examples: Zk proof chains, optimistic roll ups.
Pro tip: In case you want to understand an equation in a paper or you want to summarise a paper simply upload it to chat gpt and ask questions related to the paper. It is a life saver.
Second generation whitepaper
These whitepapers are more elaborative on the concept and have less technicalities suitable for retail and institutional investors to understand.
This trend came in when DigixDAO published their whitepaper with colours in it. The paper was set apart from the regular research style whitepapers that have an abstract in the beginning. In fact, the project even had a chinese translation of the paper.
Second apt example would be Waves’ whitepaper. The project stuck to simple digestible information for its potential community members and investors. Waves published a blog on the crowd sale in a blog.
Third generation whitepaper
This generation of whitepaper modelling is different from the second. ICO projects looking to raise capital started a different approach to writing their paper. By this generation, many blockchains were already established. This made the work for ICOs easier as they had to deal with less complex stuff.
Building on existing chains helped them explain their project in a much nuanced way. It caught wider appeal from different areas: venture capitals, crowd sales, community members and early adopters.
FirstBlood, an ICO, took this approach and published a 26 pages long whitepaper covering their product roadmap, timeline, funding details and the team behind the project. They also added token mechanics and a sale period. This approach is widely used by projects to make sure that people understand what they are signing up for.
Interestingly, Humaniq’s whitepaper was a whooping 65 pager. A combination of first, second and third generation, the paper covered mathematical logic, project timeline and mechanics of the token.
Brave Attention Token — native coin of Brave Browser also took the same route to explain their product and the tech behind it.
Fourth generation whitepaper
This is the current trend that rose from 2017 crypto madness. It all started when Gnosis replaced the abstract with an ‘executive summary’. Following is the format used by most ICOs today.
1} Executive Summary
Problem overview
Mission statement
Core objectives
2} Token Mechanics
3} Platform Model
4} Gnosis Application
5} Roadmap
6} Token Auction
7} Leadership
8} Legal Considerations
9} Gnosis Architecture
It is worthy to note that Gnosis restructured their paper later and removed token auction details. You can read the updated paper here.
Towards the end of 2017, most ICO whitepapers became more business oriented as legal implications started to grow with the high adoption of cryptocurrencies. Many projects even had to add 6–10 page long legal considerations under terms and conditions to meet compliance and declare their legal terms more clearly.
One project that made quite a statement with their paper was LAToken. The project’s paper architecture can be seen below.
Executive Summary
Value Proposition
Competitive Analysis
How it Works
LAT Platform
Key Asset Markets
Crypto Market Overview
Technology
Tokens
Legal Considerations
Team
Roadmap
Wrapping Up
If you want to understand the depth of the project then the best way to understand its potential is by checking for 7 major factors.
Model, Mechanics, Market, Money, Motivation, Management and Momentum. All these factors play an important role in understanding the true potential of the project.
