Authors: Arain, ChainCatcher

Editors: Nianqing, ChainCatcher

Good news for smokers, soon you can make money from smoking.

More accurately, this is a project to help people quit smoking. Smoking is just the behavior, and the purpose is to quit smoking. X-To-Earn is the mechanism.

Puffpaw, a project on Berachain that focuses on "quitting smoking and making money," announced on September 5th that it had completed a $6 million seed round of financing. As the first DePIN project on Berachain, Puffpaw has received support from the Berachain Foundation.

"We are currently developing our own e-cigarettes and sensor devices. At this stage, it is a brand-new self-owned e-cigarette brand. By exploring Web3 to enhance consumer experience and help people quit smoking, our sensors will support more e-cigarette brands in the future. Selling e-cigarettes and cartridges is not our ultimate goal," said Puffpaw founder Reffo in an interview with ChainCatcher.

Reffo and two other partners are already in the e-cigarette industry and have their own brand in the United States, with a complete supply chain covering production, OEM, and tobacco. After spending some time in the Web3 industry, Reffo gradually outlined the idea of combining e-cigarettes and blockchain into an e-commerce application. They began working on this idea at the end of last year.

Currently, Puffpaw has completed the initial development of e-cigarettes and hardware. The team has expanded to 15 people, and they will launch a Telegram game in October and use NFTs for a cold start.

Interestingly, Reffo also mentioned that they chose Berachain because its culture and community consensus matched the project, and also because the name of Berachain's founder, "Smokey," sounded related to smoking.

The following is the full conversation:

Make Money from Smoking? NO, Make Money from Quitting Smoking

ChainCatcher: Can you briefly describe your project—a project about making money from quitting smoking?

Reffo: Our main goal is to help users quit smoking through the X-To-Earn mechanism. This mainly involves hardware. Each e-cigarette and cartridge will be equipped with a sensor chip, which will be associated with the mobile app through Bluetooth for online intelligent monitoring of users' smoking behavior. We are promoting a cartridge with a new natural formula that does not contain nicotine. Therefore, our mechanism is that if you smoke this type of cartridge without nicotine, your earning potential is maximized. The more you smoke this type of cartridge, the more you earn. However, there is a daily intake limit for this type of cartridge because our goal is not to encourage users to smoke more.

Within the set limit, the more non-nicotine cartridges you smoke, the more incentives you receive. However, beyond a certain range, the earning potential will decrease or even disappear. If you are a heavy smoker, you definitely want something long-term. But if you are not a smoker, for example, a Web3.0 user, you may be interested in the earning potential and may give the e-cigarette to a friend to share the earnings.

ChainCatcher: You mentioned that you produce the devices yourselves?

Reffo: Yes. My other two partners are already in the e-cigarette industry, and the three of us are college classmates who previously studied together in Pennsylvania. Now, we have our own brand in the United States and have our own supply chain covering production, OEM, and tobacco. For example, one of our partners used to be the global BD director of Smoore, and later started his own brand. He has served clients such as the Korean tobacco company KT&G and has done OEM for the world's top four tobacco companies. Due to the rapid development of e-cigarettes in recent years, I joined in and developed the business in the United States. We have our own brand in the United States. Last year, our global e-cigarette production reached 76 million units.

ChainCatcher: How did the idea of "making money from smoking" come about?

Reffo: I had this idea in 2021, based on my experience at many Web3 offline events and gatherings. I saw many people smoking at the entrance of these events, either e-cigarettes or traditional cigarettes. This situation was very common. In other words, the Web3 community and the smoking community overlap significantly. Many people gather to smoke and chat, and most of them are young. The deeper reason may be that when making transactions or developing, there is stress and anxiety that needs an outlet, and smoking is one of them. I observed that the Web3 industry has a higher smoking rate than other industries. After spending some time in the Web3 industry, I thought about bringing e-cigarettes onto the blockchain and creating a fun game.

This idea emerged, and then I started writing a white paper. As I researched the mechanism, I realized that we should not encourage users to smoke more or use more e-cigarettes. The goal should be to quit smoking. However, we cannot expect them to quit immediately. Our final decision was to help everyone gradually quit nicotine using the mechanism. Because smoking is not a hobby, it is an addictive behavior. Non-smokers cannot understand how painful it is for a smoker to quit, which is why there are still 1.3 billion smokers in the world. Instead of doing something unrealistic, it is better to make the process interesting and use incentives to make it more fun, combining advanced e-cigarette technology to replace traditional cigarettes. I think this is an e-commerce application scenario combined with blockchain.

I believe I am not the first person to think of "making money from smoking," but to implement this idea, a strong supply chain, knowledge of the e-cigarette industry, and experience in operating brands and community building in Web3 are needed. Only when these elements are combined can the idea be truly realized and gain support from users. From the end of last year to the beginning of this year, I felt ready to truly launch this idea.

ChainCatcher: Is the goal of the game to reduce nicotine intake? If users successfully quit nicotine, will it lead to a decrease in cartridge consumption?

Reffo: There is no data or research in the market that shows that people smoke e-cigarettes because of nicotine addiction. Some do, but some do not. Existing data is inaccurate and not meaningful. We know that not only people addicted to nicotine use e-cigarettes for comfort, but many people need a few puffs when they are anxious—sucking is a human stress response that has been present since infancy, similar to how some people bite their nails when nervous.

Only when we truly help people quit nicotine, we may have this data, that is, how many people will continue to smoke e-cigarettes after quitting nicotine, or not.

Currently, we can confirm that the existing mechanism rewards any user for the first 150 puffs within 24 hours, but there are no incentives for completing this goal daily. At that point, it is simply consuming e-liquid, and when the e-liquid is used up, users need to purchase cartridges, which can be exchanged for tokens. From the perspective of earnings, the first puff of the day is the most profitable, and the more you smoke, the less profitable it becomes. After 150 puffs, it starts to become unprofitable.

Thinking about the Sustainable Business Model of Quitting Smoking DePIN

ChainCatcher: When did you start working in Web3? What was your previous professional background?

Reffo: I entered the Web3 industry at the beginning of the pandemic in 2020. Last year and the year before, I was working on a SocialFi project, which was not very successful, so I left and met my two college classmates. They knew what I was doing, and I knew what they were doing. In July last year, the three of us started working together. My expertise is in marketing and branding, while they are responsible for the supply chain, production, and logistics.

ChainCatcher: What prompted you to join the Web3 industry? Why did you consider joining this industry?

Reffo: I have many friends who work in VC and PE, and I myself also worked in VC for a short period of time. Most of my career has been in real estate investment and development, with a focus on research. In 2020-2021, some of my VC friends resigned and went all in on Web3, which influenced me. In April 2020, the COVID-19 situation in the United States became severe, making it difficult for me to work outside. Based on my pessimistic view of the future industry, I decided to resign and stay at home. Influenced by friends around me, I started playing NFTs at home, entering the industry as an ordinary consumer or player.

ChainCatcher: Why did we choose to start a DePIN project?

Reffo: It was a coincidence. If we were to enter this track just because it's popular, that would be a misconception. This is an investment logic, not the logic of entrepreneurs looking for opportunities. We are in the e-cigarette industry ourselves, with industry resources. I knew the concept of "making money from smoking" would definitely be popular, so when starting a new project, it naturally aligns with our own advantages and background. We accidentally became a DePIN project.

Many other DePIN projects are involved in infrastructure or data computing and AI-related content, which are quite hardcore technologies, and they are physical infrastructure. But what we are doing is a decentralized consumer network, an internet infrastructure. For example, our users have NFC on their e-cigarettes, and when two e-cigarettes touch, they can add each other as friends. We will incentivize users for this "collision" behavior, encouraging them to add friends and build a consumer community. I believe that as a DePIN project, we are broadening the definition of DePIN.

ChainCatcher: DePIN projects usually foresee future revenue, usually from selling devices. Besides selling cartridges, what other sustainable business models do we have?

Reffo: Our project will use NFTs. We will initially release 10,000 NFTs, and players who obtain NFTs will receive a free e-cigarette and three cartridges. After receiving the physical products, players will enter the game and need to complete specific actions daily to consume "cartridges." After consuming them, they will need to purchase new cartridges. Purchasing cartridges will require using tokens, and players will need to continuously purchase to participate in the game. Additionally, early holders will receive additional benefits.

As the user base grows, we will enter traditional markets, such as offline. The sales scale in this offline segment will be very large, with daily sales possibly reaching tens of thousands to millions. We will encourage token transactions for this part of the sales and provide discounts.

In the later stages, there will be a data strategy. As the platform's user base grows, the value of the data generated will increase. Our potential users are the 1.3 billion smokers worldwide, who are the most typical sub-healthy population. Our new e-cigarettes can record user behavior data, and our platform will collect a large amount of user data, including smoking habits, ultimately forming user profiles of sub-healthy smokers and consumers. This data will be used not only for consumer insights but also for health data, especially in respiratory health.

Currently, the e-cigarette industry cannot sell online, which means brands cannot directly reach end users and obtain data. This leads to a lag of about a year in e-cigarette development, and the reference value of consumer data for development is limited. Our platform will attract a large number of users by incentivizing them to upload data, creating a traffic advantage. Users control the data and can choose to disclose it to third parties for data monetization, from which users can also earn income.

Therefore, our platform's revenue comes not only from the consumer end but also from the business end, such as pharmaceutical research companies and medical device companies.

Our long-term goal is to cultivate brand loyalty through product innovation and user participation, rather than relying solely on token incentives. This is different from the traditional e-cigarette brand model, which relies on offline channels and brand loyalty cultivation. Additionally, I want to emphasize that we are different from a simple X-To-Earn game because we have a product, which is still an e-cigarette. We are building a new brand and can generate income from repeat purchases by users, relying on physical devices.

ChainCatcher: Why did you choose to launch on Berachain?

Reffo: We are an X-to-earn project. When considering, we had options like Base, Solana, or finding a new Layer1 public chain that had not yet launched. We did not choose Base because we felt that the consumers there were not so interested in games, and the distribution area was mainly in the United States, which did not match us very well. There are too many DePIN projects on Solana, so we did not consider it either. We chose Berachain because its culture and community consensus matched ours, and the name of the founder, Smokey, sounded related to smoking. Berachain also has NFTs with a cultural attribute of religious belief, which matches the preference for a radical cultural community with X-to-earn games. Additionally, the community on this public chain is very active, and there is a strong community consensus. In the process of dealing with their ecosystem, I found that they are very supportive of the concept of our project, so we ultimately decided to go with Berachain.

Launching the Project with E-cigarette NFTs, Prioritizing the Korean Market

ChainCatcher: Only your self-developed e-cigarette devices can be used to play your game. How can users obtain your e-cigarette devices?

Reffo: We will sell early NFTs on the official website, followed by mainly selling them within the app. There will be no direct sales on the official website. Because the consumption scenario for using e-cigarettes is mostly outdoors, our sales and internet monitoring will be based on our app. Currently, we are prioritizing entry into top-tier countries' markets such as Korea because of the large number of smokers in Korea and the huge market potential. We have already partnered with a local e-cigarette brand in Korea and will directly ship products to Korea, where they will be locally filled and then shipped directly to our end users, bypassing offline distributors, thus competing with traditional brands in terms of price and cost to provide higher cost-effective products.

Our hardware products are produced by ourselves to ensure quality. Our products have already appeared at offline events such as ETHCC and KBW, with a good response. There are no middlemen taking a cut, and consumers feel that the performance and experience are better than most products on the market.

ChainCatcher: Will you start from the Korean market?

Reffo: Yes, we will even open an offline flagship store in Seoul. This flagship store is not a regular offline e-cigarette store; it is mainly a consumer experience store, allowing consumers to feel the difference between our products and other traditional e-cigarette brands and perceive it themselves. This also includes the X-To-Earn gameplay. Our main goal is to quickly radiate the entire Asian market through Korea and this flagship store. In the future, we will also open offline experience stores in other places.

ChainCatcher: It took you five months to grow from 22 participants in the weekly community conference calls to 166 participants. Can you share your growth secret?

Reffo: We started promoting our project to the public in April this year and have almost done a community AMA every week, except for one week during KBW. As long as you actively communicate with the community and are not isolated, as long as you do well, everyone will see you. The key is to solidly build the community.

ChainCatcher: How big is the team now?

Reffo: The team now has 15 people, mainly focused on brand building, operations, and BD. We have already completed the early hardware development and production, and our two partners have enough experience and a deep industry background, so this area does not require too many people.

ChainCatcher: Can you reveal the rhythm of the next few important events?

Reffo: In early October, we will launch our TG mini-game, and in mid to late October, we will presell our first batch of 10,000 Genesis NFTs (which we call Puff Pass) and Genesis cartridges, which will be basically in line with the launch of the Berachain mainnet. After the sale is completed, we will distribute 10,000 e-cigarettes to users, allowing them to enter the game.

Entering the game means that the contract deployment and app listing will also be completed, and these major actions will almost happen at the same time. We will ensure that users can play the game as soon as they receive the e-cigarettes.

The game will progress in several quarters: in the first quarter of next year, we will update the second season of the game, and we will also launch our data platform and vape2earn products specifically for the Japanese and Korean markets. Our player base will expand as we progress through the quarters, and after the third season of our game, after expanding through these three nodes, we will start to lay out the offline market in mid-2022, truly entering the traditional world and competing with ordinary e-cigarette brands.

Additionally, we are also developing a sensor that can be linked to any ordinary e-cigarette on the market through a TYPE C interface, even disposable e-cigarettes, to collect user data. This means that at this stage, we become a sensor company, selling sensors and no longer doing the e-cigarette business. This broadens our user base and country. Our real goal is to build the Puffpaw platform, which can not only reshape the entire industry chain but also help users accumulate and monetize their consumption data and health data, thereby providing long-term rewards for users, not just the early vape2earn incentives.

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