Block Array – Logistics tracking and business data on the blockchain.

blockarray block array
Blockarray is a Chatanooga, TN based firm seeking to develop data protocols, IT infrastructure and smart contracts to improve item tracking and product information through the supply chain to the end user. A more narrow example of a problem they seek to solve is that barcodes (GS1 standard codes) do not provide much information apart from the firm that produced the item, and its ID. The solution to this is to create a data protocol and infrastructure that allows business-to-business communication by the use of barcodes. This product would be a semi-centralised barcode system that offers the standard GS1 barcodes used by over two million businesses globally, and a unique anti-counterfeit barcode. Furthermore, the barcode and blockchain system can be used to track the product through the supply chain to ensure accountability to suppliers and shippers and provide live tracking and information with the IoT.

To pull this all together, we can condense this down into a few key goals. Blockarray will enable GS1 industry standard barcodes to point to URLs or URIs to make obtaining information easier. The protocol will also anchor the barcode generation to the blockchain and associate it with an Ethereum (or other platform) wallet address. The actual action of scanning a barcode can be recorded as a transaction of the blockchain to enable better accountability.

Furthermore, Blockarray will allow information to be distributed across supply chain companies through the entire chain that they may not have had access to before. Assets could also be tracked without RFID, unlike other RFID-based solutions like Waltonchain or VeChain – all that would be required is updated software. Another key goal is reducing the barrier to entry for new businesses accessing existing sales platforms like Amazon or eBay by allowing purchase of GS1 barcodes with ARY tokens. The firm also targets smaller enterprises that may not have their own blockchain ambitions realised due to the expertise required to utilize the tech. This product is designed to be deployed both the Ethereum blockchain and Hyperledger Fabric. Eventually, there are plans to use Cardano in Q3/Q4 2018, and to further use Chainpoint and Oracles POA.

Transport Use Cases

So, we’ve talked broadly about one Blockarrays goal to track items across the supply chain, Hackernoon’s Tommy Wilkinson nails an example process as below:

  • A HGV driver is ready to leave with a container of product from a warehouse. The Blockarray mobile app will be used to scan a Bill of Lading barcode (see more on Bills of Lading with another startup, CargoX here) and via an Object Name Service a document is pulled, and other data collected such as GPS and local time.
  • The shipper and carrier sign off on the run, and when the driver leaves, a Geofence trigger is activated,and records the time. This data is written to the blockchain and is thus immutable.
  • Any violations of contract terms is clearly recorded and disputes can be settled quickly and breaches resolved. All parties will then receive receipts and copies of data via blockchain.

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Standardising approaches between businesses is a key goal for Blockarray, and it’s been confirmed they are a working with Tennessee State Representatives to create a framework and possible pilot study for smart contracts. The firm is also a member of BITA, the blockchain in transport alliance. This group has some large multinationals as members, including UPS, McLeod Software, FedEx and Bridgestone. A cornerstone of their approach is the use of GS1 standards, just like other supply chain protocol developers OriginTrail.

One of the big shipping use cases Blockarray points out is a solution to a detention payout problem where having reliable evidence is an issue:

When a truck driver arrives at the time they are suppose to, but the cargo is not ready to be loaded, they are entitled to a detention payout. Detention was ranked as one of the five leading business problems by 84 percent of the 257 carriers surveyed, including trucking companies and owner-operators.

Having time and geostamps on an immutable, shared ledger can quickly resolve these claims, act as a prompt to reduce incidents of detention by cargo loaders, and ensure recompense is given to affected parties.
Another case is putting daily trucking logs onto the blockchain. In Europe, tachographs are a legal requirement for goods and passenger carrying vehicles, to ensure driving time speed limit laws are adhered to.  EU regulation No 165/2014 is an incredibly serious piece of legislation policed throughout Europe heavily, and can result in large fines for both companies and their employees. In the U.S, The Federal Motor Carrier Safety Administration (FMCSA) published the electronic logging device rule in December 2015. This required the use of an electronic logging device to automatically record the driver’s Record of Duty Status (i.e if he is driving and for how long).

Visual Smart Contracts

The use of visual smart contracts is how Blockarray, through their Badger consumer app can link information from firms to their products for public consumption.

Goods in supermarkets have different label standards. For example the reporting standards for what “is and is not” organic differs from company to company. With badger these are just some of the features you can see with products:

See the organization that actually certifies the product

See reviews of the product

See hazards that have been listed (e.g. choking for children)

Poison Control Information

Safety Datasheet

Product Recalls

For example, you could purchase a fridge from a store, and it breaks after a period of time. The consumer could use the badger app to scan the barcode on the product, which then could list product recall information, warranty dates, the items repair history if it has any and lists of authorised repair centres. It could even provide links to instruction manuals or other documentation. So far this platform is being developed on Ethereum, and the proposal details creating a standard barcode system like GS1 to be used with the blockchain. Further platforms such as Hyperledger Fabric are also being developed for.

Token Economics, Utility and ICO

At ICO, 1 ARY was priced at 0.18 USD. The total supply sits at 88,409,933 ARY and a circulation supply of 68,430,738. Blockarray currently has a market cap of just $11,525,105 USD (0.168 USD per ARY).

40% of tokens were available in the ICO, with 55% of funds raised being used for product development, 10% held in reserve, 20% on marketing and 15% earmarked for business expenses. Not much detail here which is a shame. Tokens held by the team have a 9 month cliff, so if an employee leaves before this period they receive no tokens, with a phased 4 year vesting period following this. Blockarray also retains first right of refusal before selling onto exchanges.

Token holders will have the opportunity to host full nodes or partial nodes for the blockchain network. Blockarray will have its own GS1 Prefix, allowing us to issue codes for those who wish to use our own prefix for their products. Token holders will be able to purchase ONS2.0.1 compliant barcodes using our prefix, and domain name service will be provided by us for such issuances. A proportion of the tokens used in the issuance of such barcodes will be burned, providing an anchor to the blockchain by means of the timestamp of the transaction.

So a couple of key points to take from that quote that contain value for token holders.

  • Proof of stake/masternode potential down the line to generate income.
  • Purchasing of barcodes – creates demand for the token, thus can create positive price action for holders.
  • % burn of tokens used at issuing of barcodes reducing supply.

You can buy Blockarray $ARY at KuCoin.

Active Partnerships & Future Activity

Blockarray currently has a small pilot study with a local carrier consisting of 15 trucks. Also recently announced was a partnership with qlink.mobi, a decentralized mobile network constructing an open-source telecom infrastructure on blockchain. The core aim of the partnership is to implement Qlink’s dapp functions for Blockarrays customers.

This means trucks will be able to communicate engine data and electronic logging device data to their owners while en route. In return, Block Array will help to deploy Qlink Chain Full Nodes to ensure network uptime, reliability, and stability for its users.

qlink blockarray

With one of the platforms Blockarray is working on being a secure proof of logging and proof of arrival/departure ledger, this partnership will allow an always online transparent immutable blockchain, that could open up data to explore further with the Internet of Vehicles.

Badger – the planned consumer app will be launched in Feb 2018, with the enterprise app in March. Also in this month will see the beginning of electronic logging device records being anchored to the blockchain, with visual smartcontracts in April/May. Furthermore in April will see e-commerce intergration plugins for woo-commerce and Magento released.

You can buy Blockarray $ARY at KuCoin.

The Blockarray overview paper can be found in PDF format here, and the full format whitepaper here on their github. The Telegram chat group is linked here and you can follow them on Twitter @blockarraygroup. In the past month the team has also unveiled their new website at https://blockarray.com/.

Any thoughts? Follow me on twitter!

If you liked this, you may like this article: OriginTrail – A purpose-built, blockchain agnostic protocol for supply chains.

Modum – Real blockchain utility, in a sea of vaporware. Part 2 – Concerns regarding the token utility and possible classification as a security.

After looking at what appears to be a solid business plan, it’s only fair to balance that out with any concerns and competition the project has, and will face.

One of the common criticisms of ICOs is the tokens investors are receiving in return for their funds. When the Raiden team announced an ICO with a token, there was some outrage at the idea of raising funds for a protocol that would allow further low cost, scalable token transfers. In the run up to the announcement of the ICO, it was assumed by the vast majority this would just be a next step for Ethereum, akin to the Byzantium hard-fork. Now to be fair, the Raiden team posted a fairly solid response over at their Medium, however it did put recent ICOs under a lens by the community for the utility of their tokens. Modum was no exception to that scrutiny.

Token Utility Concerns

Modum is no exception to this spike in scrutiny, and the main concern raised is:

The modum token is not a utility token, and as such is not utilised by the company in its product. Where is the value?

Completely true, the modum token is a vehicle containing profit-sharing and voting rights. The white-paper states – “The board of modum.io decides and declares the amount of dividends when there is a profit. A payment equivalent to this amount is converted to Ether and sent to the modum smart contract. The modum smart contract evaluates the current holdings and distributes the profits to the token holders in Ether. The voting and profit share smart contract is open source.” So, while the open source nature of the contract might make some of us feel better, what does the rest of that sentence tell us?

Startups outside of crypto typically take years to post profits. On top of that, the board of modum.io decides how much profit is distributed. In theory, even once modum posts a profit the board could just decline to payout any dividends. However, this is true of pretty much any publicly-listed company, and they still pay out dividends yearly. The key difference here is that owning shares of a publicly traded company is different from just a profit sharing token, as token-holders don’t own a share of the company. However we can see in the whitepaper in the next three years a third of the token supply (tokens locked here) will be distributed to the shareholders (some of those being on the board of directors). Thus, there is a clear incentive here for all parties to profit share.

The value of the mod token, like most publicly traded companies who payout a dividend is then directly linked to how successful (and profitable) the company is. Simple as that! Although there is no actual share of ownership, the voting right element does provide a component of control over some key steps listed on page 13 & 14 of the whitepaper, including further releasing of tokens locked by the smart contract on milestone 2, 3 and 4, with the last step hopefully completed in Q1 2020.

Previous profit-sharing tokens such as iconomi ($ICN) have actually moved away from a profit-sharing model, and instead opted for a token-burn. Iconomi’s main concerns were around the dividend ensuring regulators would take the token as a security and lead to heavier regulatory concerns. Also with the sheer quantity of token holders with poor data management, how to resolve the issue with ‘dead’ accounts receiving the dividend to no benefit, and the loss of others was a concern. The buyback was an easy fix to that issue. The full article is worth a read and will be interesting to see if modum’s model changes in the next few years.

Tokens as a Security

There has been a fair amount of discussion on tokens as securities as inevitably regulation starts to come into play. A couple of pieces worth reading are linked on their images, but to summaries, while nothing is formal YET, all tokens, not just profit-sharing ones like modum could be classified as securities. During the ICO modum confirmed they have been in discussion with FINMA (the Swiss regulatory body for financial market legislation, including tax law), and the below guidance was issued. ICOs are not yet covered by legislation.


Now even if you don’t even glance at the two PDFs linked above, there is just one quote I believe you can take from it:

“Due to the close proximity in some areas of ICOs and token-generating events with transactions in conventional financial markets, the likelihood arises that the scope of application of at least one of the financial market laws may encompass certain types of ICO model. This is also the case for ICO activities which aim to circumvent those provisions. Owing to the wide variety in structure of ICO models, FINMA can only carry out a conclusive regulatory assessment in specific cases. Currently, FINMA is assessing a number of such cases. Where financial market legislation has been breached or circumvented, enforcement proceedings will be initiated.”

So, modum have been clear since the ICO, they have been in touch with FINMA, and may indeed be once of the cases they are assessing. Nothing is set in stone as of yet, but its fair to say legislation is coming, and not just from the Swiss government. Markets are being disrupted across the globe, and being up to date on the latest legislation from your home country, and ICOs  you are investing in is essential. When the dividend is paid, I wouldn’t be surprised to see a new wave of KYC requests for token-holders.

 

Token Economics

Image taken from whitepaper, page 13, figure 7.

 

Modum.io’s token split at ICO is seen in the above chart taken from the whitepaper. With the 30% of tokens held by modum being released at 4 different milestones across the next 2 years following a positive vote from token holders. Looking at the current etherscan breakdown of address holders, we can see a few points to touch on so far.

 

Modum so far is only listed on three well-used exchanges, Binance and KuCoin and EtherDelta. Binance’s hot and cold wallet, etherdelta, kucoin, and modum themselves hold around 35% of the total market cap, outside that only 3 wallets hold over 1% of  tokens. The vast majority of holders are small holders, hopefully pointing towards a market that is less likely to be manipulated. However with a a total supply of only 27.26 million tokens and with 94% of the volume only coming from Binance, we have seen huge sell/buy walls up. This token supply is also fixed.

Competition

There have been several recent ICOs looking to compete in the same market as $MOD, combining RFID sensors with blockchain tech.

Ambrosus $AMB

Ambrosus looks like the most direct competitor, focusing on food and medicinal shipments. There so far has been no showcase of any sensor equipment, but according to some of their updates they have a focus on data silos and management to speed up compliance and process analysis. In practical terms, they do seem a way behind modum with no evidence of pilots or partnerships going live, while modum has their fourth pilot going live with their proprietary technology, and 10,000 sensors hitting mass production in Q1.

From a token perspective, $AMB has a token supply of 361.5mil, with a market cap of 137.2mil USD.

You can buy Ambrosus $AMB at Binance and KuCoin.

Waltonchain $WTC

Waltonchain is another RFID-based solution, and recently Boxmining visted Waltonchain’s reserach center in Xiamen and had a look at their product demo. Like Modum and Ambrosus they are seeking to incorporating tracking of physical goods into the blockchain, and thus preventing counterfeiting etc.

WTC also has some different token mechanics, with the possiblity of becoming a masternode if holding 5K+ tokens.

You can buy Waltonchain $WTC at Binance and KuCoin.

WTC has a current market cap of 645mil USD, with a total supply of 70mil. This puts the valuation at $26USD per token, a massive sum. WTC has however just announced partnership with China Mobile IoT alliance, but the partnership has not been actually finialised, which caused a huge in the spike:

Modum is at time of publish is sitting at a market cap of 154mil USD, with a total supply of 27.26 mil tokens which can make it hugely attractive to potential investors with the small token supply. With partnerships to be announced in Q1, modum looks like a solid opportunity, even with a $10USD per token pricetag. While modum.io is focusing on pharma shipments to begin with, logistics integrity tracking is easily something that can be expanded or licenced out, and with relative first-mover advantage, modum is ready for big things this year.

You can buy modum.io $MOD at Binance and KuCoin.