# Winding Tree Transparency Report

In 2017 we published our first white paper describing travel industry problems that blockchain could fix. In this report, we'd like to summarize the progress of the last five years, talk about the future, and provide answers to some of the questions from the community.

## Winding Tree Vision

The vision outlined in the original white paper has never changed. Our goal is to provide the travel industry with an open and transparent marketplace and fix numerous issues the industry is facing. The team firmly stands behind these goals.

## Brief History of Winding Tree

### December 2016

Maksim Izmaylov publishes his thoughts about [problems in the travel industry and the potential to fix those problems using decentralized systems](https://www.linkedin.com/pulse/travel-industrys-invisible-battle-maksim-izmaylov/)

### Summer 2017

Pedro Anderson and Maksim Izmaylov speak at multiple travel conferences and events, discussing the idea of a decentralized travel marketplace with industry experts. The feedback is encouraging: major travel industry players confirm that they suffer from issues caused by intermediaries, ranging from commission fees to the inability to communicate with their customers. Pedro Anderson works heavily on partnerships with travel suppliers. Lufthansa becomes a big fan of Winding Tree, one of a few companies that [openly defy the intermediaries](https://www.bbc.com/news/technology-32990724). The core team forms and the preparations for the TGE start (token generation event, the crowdfunding). The team discusses the formation of a Swiss Foundation with MME (Ethereum Foundation is a Swiss foundation, and MME is the law firm that helped Ethereum to set it up).

### Fall 2017

The foundation is successfully set up, but because of uncertainty around crypto regulation in Switzerland, MME doesn't give us the green light for the token generation event, which, as they say, can't be held until February 2018. Ethereum price is $300.

### Early 2018

Because of all the roadblocks in Switzerland, we set up a company limited by guarantee in Gibraltar, which recently adopted regulations that created a favorable climate for crypto projects. The TGE that started on February 1 and went on for two weeks raises ~16,000 ETH.

On January 29, one ETH costs $1,000+, but on February 5, it's already at $800. Immediately after the TGE, ETH price continues to fall sharply to $400 in April, goes up to $800 in May, and withers down to $90 in December.

We publish the [first-ever article about NFTs in travel](https://blog.windingtree.com/non-fungible-tokens-in-wt-4a4c06858ac6).

[2018 in Review on our blog](https://blog.windingtree.com/winding-tree-2018-year-in-review-1473a80aa94).

### 2019 Progress

At the beginning of 2019, we realized that without creating an identity layer for companies, we would not be able to create a decentralized marketplace: any merchant needs to know whether they're going to get paid on time or whether they're going to receive their goods or services.

ORGiD is born. From the beginning it uses W3C [DID](https://www.w3.org/TR/did-core/) and [VC](https://www.w3.org/TR/vc-data-model/) specifications. The 40,000 feet overview of the marketplace is as follows: a company creates their profile with our smart contract (we call it Winding Tree Marketplace, essentially just a registry of companies). Company profile contains all the information necessary to identify them, plus links to their APIs that must follow a few simple rules related to identifying where (or, rather, to whom) the API requests go to and come from. Two problems remain: ETH transactions are increasingly expensive (an ORGiD registration may cost anywhere from 5 to 40 US dollars), and we still have to convince suppliers (and their intermediaries) to change their APIs to start providing content on the platform. We're hoping to move the project forward in 2020. We're ready to take on the travel industry!

[2019 Recap](https://blog.windingtree.com/the-state-of-winding-tree-2019-year-in-review-45c261467cad)

2019 Ethereum price is around $150, reaching $300 briefly.

### 2020 Rollercoaster

In early 2020 we start to prepare our pitches for ITB Berlin (Max) and SXSW (Pedro). Both events are canceled, as 99 percent of other in-person events. A few of our partners had withdrawn from collaboration because the travel industry is one of the most affected by Covid.

Travel companies are in survival mode. We try to reframe our ORGiD product as a solution for any online marketplace. If there are fewer and fewer in-person transactions, then identity is precisely what's needed to grease the wheels of commerce. Online communities on Telegram and Discord suffer from similar malaise: scammers pretend to be founders or admins of crypto projects and steal millions of dollars.

In 2020 we pitched the new way of doing travel distribution to as many partners as possible. We needed to bring a critical mass of companies onto the marketplace, and a big player that could generate a lot of supply (or demand) seemed like an ideal solution. A big corporate buyer (let's call the "BC" because we still can't officially talk about) reaches out about trying Winding Tree during this time that travel is down. The buyer is one of the top 10 buyers of corporate travel worldwide. They have tens of thousands of employees that travel all the time. What is their problem? All the usual travel industry problems caused by intermediaries. What is our problem? Big enterprises require years of negotiations and due diligence just to get started. We begin talking to new partners willing to experiment during this challenging period for the travel industry, and American Airlines comes on board.

We form a new legal entity to pass all the requirements that collaboration with these big companies entails: Simard OU in Estonia. This entity helps us overcome the bureaucratic boundaries of working with some travel companies. Pedro Anderson, along with Don Birch (formerly advisor to WT) and Mathieu Tahon, focuses on the strategy of seeding the marketplace with the help of a few big companies. Simard is the face of Winding Tree for corporate buyers and the global offices of suppliers, such as major carriers and hotel chains.

At the same time, we're trying to approach the problem from a different angle. If working with big companies requires a lot of time, we could try and onboard many small companies. Maksim doubles down on the grassroots work of building for the community. We created Rooms (an inventory management system for hotels) and Glider (a hotel booking website connected to Rooms). Both tools are open source: anyone can participate in the ecosystem at no cost. But travel is not showing any signs of recovery.

### 2021

By 2021, we were simultaneously pursuing the following strategies:

- work with a few big companies
- work with many small companies
- promote ORGiD and tools around it as a solution for a few identity-related problems

The travel industry is still at 10% of its capacity. We look at other things we can work on since there is not a lot of demand from travel companies. For some time now, LIF has been a problem because of how the smart contract was programmed initially, so we decided to do a token swap. Almost immediately after the swap, a community member proposes a seemingly better solution: to migrate LIF to an L2 chain.

The community seems to be interested in being able to trade LIF on a centralized exchange, and the team is facing a dilemma: invest hundreds of thousands of dollars into a CEX listing, or double down on the product. The problem with a CEX listing is trust. A CEX had delisted LIF before, suggesting we reapply and pay a $40,000 fee.

The year 2021 was a year of NFTs and L2s, and it was incredibly inspiring to see so many new people joining the cryptosphere, and because of that, we decided to go for a new approach in 2022.

In the second part of 2021, Don Birch, our advisor and travel industry veteran, takes over Simard as the CEO, intending to bring corporate travel companies to the Winding Tree marketplace.

In the spring of 2021, for the first time in 3 years, the price of Ether reached $1000 and kept rising.

### 2022

In February 2022, I (Maksim) took a vacation for the first time in a very long time. I decided to meet one of the community members, MFW, who showed a great deal of knowledge in smart contracts and other blockchain things. I thought it would be an excellent opportunity to learn from him while enjoying mountains and skiing. During my two weeks there, I wrote the first version of Stays, the smart contract that would be at the core of the WIN Amsterdam project. Of course, I can't take all the credit. The team behind Stays made it a success, but it began somewhere in the Georgian mountains: I love coding for fun!

### Amsterdam

With the Stays project, we tried to prove that it is possible to put hotel inventory onchain, and, not surprisingly, it solved quite a few problems compared to traditional distribution:

1. Intermediary fees
2. Fake reviews
3. Privacy concerns
4. Long settlement times
5. Double-booking
6. Manual processes of canceling or changing reservations

For Amsterdam, we created a simple interface for hotels and a basic booking website. We saved 20,000 Euro (50% discount!) for Ethereum Devconnect attendees, with 100 room nights booked.

The problem with this experiment is that we still had to manage our hotel partners. Our most important hotel (the Hilton) refused to accept crypto or deal with Metamask, so we had to manage their inventory, convert xDai to Euro, and send it to their bank account. It seemed that we proved that our target audience was willing to pay for hotels in crypto, but we realized we have an enormous challenge in educating hoteliers about crypto.

Talking to a journalist from the travel space at the beginning of 2022, I asked her whether she had any crypto or had ever tried to register a wallet. She's been covering our adventures for years, but to my utter astonishment, she said that she has none of the above. People from the travel industry still don't understand and are unwilling to understand the technology that can help them. They didn't even take elementary first steps!

Price of Ether in April: $3,000.

### Barcelona and Paris

Right after Paris, MFW proposed a new protocol he called Videre, which was supposed to be more flexible. He argued that hotel inventory doesn't need the security and permanence of being stored on a blockchain. It was also supposed to provide flexibility that a smart contract wouldn't be able to. The problem with Stays (the smart contract) is that every change of availability, meta-information, or price would require a transaction, which could be cumbersome for most users. Videre required the supplier to maintain a server with an API that would send cryptographically-signed messages to the buyer.

Videre was not ready for ETH Barcelona and EthCC in Paris, so we had to reuse the trusty old smart contract. Surprisingly, there were very few bookings: just two in Barcelona and one in Paris. The marketing around these two events was top-notch, and we're still analyzing the results of the polls we've done in Barcelona and Paris. Preliminary data suggests that people who travel for crypto conferences don't venture out into the city. The two most important factors for them were distance to the venue and the price.

## 2022 Plans and Beyond

### The World Where Everybody Wins

Let's imagine a not-so-distant future where everyone understands cryptocurrencies, where you would use user-friendly crypto-wallets instead of credit cards. Naturally, the merchants will be using blockchain-based tech without much thought because it's such a simple and ubiquitous piece of technology. What would travel look like in such a scenario? Please scroll to Appendix 1 to have a glimpse of it.

### Future of (not only) Travel

The future we're envisioning is not that remote. There are three hundred million crypto users already, and this number is growing very fast!

Here are the benefits of using a decentralized system that Winding Tree proposes.

- the supplier fully controls the relationship with the customer (there is no in-between company or brand)
- in a single transaction, the traveler pays for all the items in the itinerary
- payment is automatically distributed to different vendors by a smart contract
- change and cancellation rules are enforced by the smart contract (there is no need to call anyone)
- the money stays within the local community
- unfalsifiable reviews: only travelers that took the trip will be able to leave a review
- transparent distribution of funds to conservation programs and other charitable causes (the traveler always knows where the money went)

Technologically, this vision is up and running today.

### The Problem

Blockchain is a groundbreaking technology that will reorganize society and how it functions. It is, ultimately, a tool for fighting the centralization of capital and, therefore, control. In a perennial pursuit of drama, the media paint an entirely different picture, and that's what the public sees: cryptocurrency volatility, PoW energy consumption, and articles about how all of crypto is just a giant Ponzi scheme.

In our endless conversations with hoteliers, OTAs, and journalists, we keep hitting the wall of, at best, incomprehension or, often, a complete misunderstanding of what we're trying to do.

We have a few assumptions that we need to prove (or disprove) to create a functional platform:

1) Is there a big enough target audience willing to pay for their trips in crypto (stablecoins)? Amsterdam gave us a resounding "yes!" But Barcelona and Paris events completely flopped.
2) Are there enough hotels (and other accommodation providers) to form a critical self-sustaining mass? Should we fake it for now via integration with one of the intermediaries, like Travala did, to help us win us some time?

### Our Next Steps

1) We're creating a travel booking website for the crypto crowd. Status: September ETA.
2) We're onboarding hotels directly into Rooms. Status: ongoing.
3) We've integrated a provider that would give us access to hundreds of hotels so the crypto crowd can start booking right away

### 2022 Goal

How do we know whether our assumptions are correct? By the end of the year, the Winding Tree platform has to be on track to reach 5,000 monthly transactions. Otherize, we will transfer the control of all the smart contracts and all the assets to LIF holders.

### You Can Help

Here are a few things that you can do today to help us (and the world):

- help one of your family members or friends to set up their crypto wallet and teach them how to use it - this is the most critical step, in our experience, that gives people a good idea about what crypto is, so they start learning themselves
- if you know anyone from the travel industry, you can teach them about Winding Tree (we're working on an affiliate program that would incentivize this)
- join our discord to participate in the conversation: https://discord.gg/4pKhvvwvHt

### LIF and DAO

Winding Tree team's success and LIF's success are 100% aligned. After consulting our advisors, crypto-, tokenomics professionals, and stakeholders in other projects, it is abundantly clear that the best course of action for the project is to ensure the flow of transactions and money through the system.

Putting the horse before the cart will only distract our attention from what's important. Paying for a centralized exchange right now would mean that a few LIF holders will be able to dump them, nothing else.

The same can be said considering the formation of the DAO. While both DAO and LIF success is our goals, it will be detrimental to our progress to work on these projects at this moment.

### ORGiD and Winding Tree Marketplace

ORGiD will remain a standalone product. We plan to deploy ORGiD smart contracts on a few different chains. ORGiD is a crucial component of the Winding Tree smart contract ecosystem; e.g., Simard uses ORGiD (ETH Mainnet) in its BC/AA and other integrations. The old version of the Winding Tree Marketplace website has been sunset, but we will be rolling out a new version of the marketplace on L2 chains.

### Videre

As of July, we postponed the development of Videre. Its current design is incompatible with the capabilities of accommodation providers since it requires them to either install the Videre server on their hardware or deploy it onto a hosting of their choice, which requires IT resources or at least some expertise in how to do it. At the moment, hotels are not even willing to operate a Metamask wallet, and trying to convince this audience to manage their own servers is a losing proposition.

## Simard Partnership

Estonian legal entity Simard OU was initially formed by Maksim Izmaylov and Pedro Anderson to enter into agreements with companies that couldn't work with Winding Tree Ltd in Gibraltar or interact directly with standalone smart contracts.

Mathieu Tahon (expert in business travel) joined as the CTO of Simard, and Don Birch, Winding Tree advisor, became the CEO as they are experts in the practices of traditional businesses.

It proved helpful to have an entity that could work with different integrations and eventually pass the due diligence of companies such as the major corporate buyer and American Airlines. Simard brings suppliers (airlines and hotel chains) and buyers (corporate buyers, OTAs) to seed Winding Tree.

Winding Tree pays Simard a monthly retainer of $1.2M over 1.5 years for promoting Winding Tree to corporate travel companies and suppliers. This agreement will expire by the end of 2022, after which Simard will continue working for Winding Tree without pay. It is a paid marketing and consulting service, not a loan or investment.

Simard has the opportunity for third-party funding from VCs to stimulate activity in the WT marketplace, which is not an option for WT.

### What has Simard achieved so far?

Simard was able to bring in partnerships with the following companies:

- BC (top 5 buyers in the world of corporate travel) - active
- American Airlines - active
- Air Canada - active
- United Airlines - active
- A few major hotel chains (under NDA) - integration complete (estimated $1M revenue for 2023)
- Premier Inn - integration via Derbysoft complete
- Simard aims to raise $3M by the end of 2022 to grow its network to 10-15 corporate buyers and 10-15 airlines
- Simard will be paying a 1% Winding Tree DAO Treasury fee forever

## Financial Review

Ethereum price has been very volatile since the conclusion of the Token Generation Event. Here's the breakdown of ETH spent over the years:

2018: 8,420
2019: 3,906
2020: 2,310
2021: 1,227
2022: 1

We're still working on the following reports that we will be releasing in August:

1) Comprehensive breakdown of all transactions
2) Yearly summaries by category
3) FTE and HC

### Outlook

Currently, the Winding Tree team has about 1.1 million euros, with a projected runway of over six months.

Winding Tree will likely need to raise more money by the end of the year. Preparations for it are underway.

## Appendix 1: A Perfect Vacation

Shula hasn't taken time off in a long time. She and her husband Dejen just couldn't manage to align their busy work schedules. But today was the day! The plan for the evening was to sit down with a glass of wine and book the trip they'd been dreaming of for such a long time.

On the way home, Shula picked up a few things for dinner. She tapped her phone on the terminal to pay and confirmed the transaction on the screen. She was pleasantly surprised! Since The Switch and the introduction of the Global Unified Monetary System (yes, GUMS!), which was based on an algorithm (as opposed to the previous system controlled by a handful of corporations and governments), prices were slowly going down. That was nice, but she smiled because the Sustainability Score of her purchase, as the app dutifully reported, was 112%. She checked the summary of the transaction in the app. All the right sigils were there: a green leaf for "organic," a seedling for "carbon negative" (all or more of the CO₂ emitted to produce, transport, and sell the goods, was offset by planting trees), a cartoonish smiling cow for "vegan," a corny icon of a handshake that in any other context would mean a business deal, but here it indicated that no rent-extracting intermediaries were involved (that is all the companies involved in the transaction were operating in an environment with adequate competition).

She could, of course, spend hours analyzing each transaction, seeing each and every company that ultimately brought the tomatoes and the lettuce into her bag (there were just a few, most of it was local). But why? She knew thousands of people (and algorithms) were checking and verifying all that information daily, keeping the system fair, transparent, and secure. It was common knowledge that this shared collective responsibility saved the planetary ecosystem from collapsing, and it was plain and obvious that it worked!

The dinner was consumed, the dinner table cleared, and sitting in front of Shula and Dejen was the perfect example of how human ingenuity saved the planet and made the world better on so many levels. Although it looked almost exactly like a travel booking website of the past, it functioned very differently. On the surface, they only saw what their ancestors saw: a list of hotels and individual apartments, options for booking flight tickets, cars, buses, bike rentals, etc. In fact, they could specify what kind of vacation they wanted to take: explore an old European town on a bicycle, a beach vacation that would include a bit of diving, a yoga retreat somewhere in Asia... The options were endless. But, Shula and Dejen had a specific destination in mind.

There are many reasons people travel. Some travel to experience new cultures and eat new foods. For many, it's just a change of scenery. Shula and Dejen traveled to see nature and, if appropriate, the wildlife. This time they decided to go to Indonesia, a country with rich and diverse culture, mountains, lakes, volcanoes, sandy beaches, delicious food, and, of course. But apart from just enjoying their trip, Shula and Dejen wanted to give back to the place they were visiting. This time, they thought, they could help a conservation project that needed it the most. Being able to fly for thousands of kilometers was a privilege, which they worked very hard for, but it was also a huge responsibility.

The website they had in front of them displayed a few relevant options for the itinerary the couple decided to settle on: a few days in Singapore as an aperitif, then a trip across Java for cultural enrichment, then some lazying on the beach in Bali, and then a trek in the jungles of Borneo to experience one of the oldest rainforests on the planet. The offer on the website included all the transportation options (flights, trains, ferries) and accommodation (they opted to rent a cute apartment in Yogya instead of a hotel). They had an option to sign up for hundreds of activities!

Planning their trip: choosing hotels in little villages off the beaten path, looking at pictures and videos, reading reviews - that was Shula and Dejen's favorite pastime. Shula admitted that sometimes she would go and look at random places around the world, it was her guilty pleasure. But she was also a planner, and her decisions were guided by hundreds of variables that she somehow could hold in her mind, and Dejen could only envy her in this regard.

One of Shula's favorite parts of the booking experience, and a mightly useful one, were unfalsifiable reviews: only the traveler that took the trip could leave a review, and owners of businesses could not remove them. In the past, a merchant could pay a fee to a booking website and "fix" their rating. Or they could leave an unfavorable review on a competitor's website or perhaps give themselves five stars. It was the Wild West! Up to 30% of all reviews on the internet were fake! How lucky we are - she thought - that we have stopped that insanity. How could we ever believe anything online?

For Dejen, the favorite part of the planning process was the fact that they were booking directly with the local businesses, meaning that all the money was going to the local community. He was glad to see that a few friends he had in Indonesia were living much better lives thanks to these new platforms. Indonesia, or some parts of it anyway, is highly dependent on tourism. Even though his friends were not directly involved in tourism, they still benefited from direct connections, as did the whole country and local communities. Dejen remembered that several years ago, before The Switch, the amount of rent extracted from the whole communities and countries by (now-defunct) monopolies was reaching 30-40-50%. No wonder some of the most beautiful places on Earth could not provide a decent life to their inhabitants since all the spoils of that beauty were taken away from them. How could we live in such a cruel world - he thought - where all that money and energy went to just a few people who didn't even know what to do with it, so they started going on space trips for vacation!

Now that the fun part was over, Shula and Dejen looked at their itinerary, double-checking everything, making sure the Sustainability Score was above 105%. It does give you a bit of an added joy when you know that whatever you're doing for fun is also benefitting everyone around you: the people, the animals, and the planet as a whole! At 117%, the couple was quite happy! The payment was the easiest: it's just a few taps in the wallet application, and after a few seconds, they were looking at the screen that showed them that a few thousand GUMS they've just spent already went directly to all the merchant wallets, where they would sit for the next couple of weeks (they had some time to cancel their trip), and then will be automatically released. Shula remembered a joke that her grandfather told her once about how back in the good ol' days, he had to spend hours talking to someone on the phone for hours to cancel a trip. She wasn't quite sure whether he was joking or not, but it was quite funny indeed! It would be as funny if, on the flight to Singapore, they would be served meat - Dejen said! Imagine the inefficiency, the mess! Shula chucked while Dejen laughed heartily.

Hey - Dejen looked at the screen - the Orangutan Outreach fund has almost reached its goal with our donation on this trip! Shula clicked on the part of the transaction they've just sent that went to the fund, and now they were staring at a picture of a [happy baby orangutan](https://redapes.org/monita/). They're incredible, aren't they? - Shula leaned her head on Dejen's shoulder.