Dragonchain – Integrating business applications onto blockchain, via serverless architecture.

Dragonchain was originally conceived as the Disney Private Blockchain Platform (DPBP) back beginning in 2015. Joe Roets and his team of developers came up with around 20 different use cases that was originally sent as an email, then released as open source to the W3C blockchain community group back in June 2016. Some of these cases include:

  • Decentralized processing, computing and storage infrastructure.
  • Identity systems, including privacy, confidentiality and security factors. (Now lifeID is a soon to be incubated product)
  • Audit – Reporting and compliance. (recently implemented by the Canadian government)
  • Intellectual property marketplace. (LookLateral just completed an ICO under the Dragonchain platform)
  • Peer to peer financial derivatives.
  • Configuration management for enterprise systems.

The full list can be found here. In the end, the DPBP was set free as open source software under the Apache 2 licence in October 2016. From this team, the Dragonchain foundation was born only four months later. The foundation is based in the techhub of Bellevue, close to Expedia, T-Mobile, Microsoft, SAP, and Valve.

The aim of the foundation in its current form is to make it simpler for firms to utilise blockchain with existing business applications and to foster adoption of blockchain in products that would benefit from it. Some of the key aims include:

  • Protection of business data
  • Fixed 5 second blocks.
  • Currency Agnosticism
  • Interop features.
  • Simple architecture
  • Easy intergration

And these goals boil into three fundamentals for Dragonchain, the platform, incubator and the ecosystem.

Dragonchain Platform

The Dragonchain platform is not based on the BTC or ETH network like most coins or tokens ($DRGN token however is), but was created from the ground up in Python and also uses Java, Node & C#. The architecture is a hybrid blockchain with levels of trust, the base level where the business logic resides is trusted, and such allows the running of an independent blockchain. It also allows the hosting of the blockchain on serverless or cloud platform. In an interview with CEO Joe Roets over at Inc.com, he explains:

Amazon AWS is the first of several integrations that are planned. The interesting point there is that our hybrid architecture allows a best practices approach for deployment and security, and we are able to leverage AWS for scale.

The architecture also seeks to leverage the value of public blockchains, especially those with huge amounts of hash power such as BTC. Integrating current enterprise software with blockchain is currently difficult and not particularly secure, as you would need to build a separate internal and centralized system to maintain business data, and then use BTC specific-knowledge to combine that system with tokenisation. With Ethereum you would also need specific knowledge, in addition to the risk of community forks according to the FAQ.

The whitepaper (page 8) details smart contracts will be deployed as AWS Lambda services. Further down the line, porting the system to the Google App Engine and Apache OpenWhisk is the priority for internal datacenter deployment.

Incubator

The idea behind the incubator is to avoid the old style tech funding path, where companies would pitch to venture capitalists in Silicon Valley or NYC and suffer massive dilution of their business in order to receive funding to take their projects further. Instead of spending time on the product, founders would become marketers instead. What Dragonchain offers is early access to startups technology via project utility tokens sold to Dragonchain customers. To put it a little more simply, it’s an ICO platform for startups, that are vetted and aided in integrating blockchain to their business that are then sold at a discount to Dragonchain holders who have passed the KYC requirements.

LookLateral were the first ICO out of the incubator, a digital platform for contemporary art, where the art is priced, tagged and tokenized. With Dragonchains expertise they can now sell art via tokens against dividends or other rights. Part of that will be the creation of a financial market for art regulated tokens (FINMART). Holders of Dragonchain were entitled to discounts on the presale as detailed below, with pretty steep discounts for long time holders with a high slumberscore (See later for more detail on the $DGRN token).

The next project due to be ‘dragonscaled’ is lifeID (Twitter here) a project seeking to replace Equifax and the like with a digital platform for securing ID. While there is no whitepaper yet, their blog will be the first place to have it. the lifeID product will have an ERC20 token with the symbol ID. Presale dates and more information is on the Dragonchain FAQ here.

Ecosystem/Marketplace

The third prong of Dragonchain’s product is the ecosystem they hope to build. The idea is hiring or creating partnerships with other developers, software engineers and having opensource software libraries with prebuild smart contracts to enable businesses to hit the ground running with blockchain tech. Other professional services such as legal and marketing experts would also make up part of the ecosystems to further expedite growth of businesses within the Dragonchain ecosystem.

Token Utility & Mechanics

So how will $DRGN actually be used? Ss from what we know so far Dragonchain’s platform is not based on the Ethereum blockchain, but holders have $DRGN, which is an ERC20 standard token. The short video details it pretty well for all three parties, those being founders, developers and community members. The token in the Dragonchain FAQ is described as a tokenized micro-licence for interaction with the dragonchain platform. The token also captures current legal guidance regarding US law covering securities and there is a patent pending on the micro-licence.

One of the more interesting mechanics is the slumberscore that was mentioned above. The number of $DRGN you hold, multiplied by the number of days held in the same wallet is equal to the slumberscore. If you have your wallet address handy, here’s a link to check yours out. As we’ve seen in the LookLateral ICO image above, holding a large amount of dragons for a long period of time can result in enormous discounts to ICOs held on the platform. It’s a fantastic incentive for the long-term holders even if there’s not much price change going forward as the opportunity cost from not holding other coins or tokens could easily be made back from the discounts on ICO tokens.

Dragonchain has a total supply of 433,94 mil $DRGN, with circulating supply sitting at the 238.42 mil. It’s currently ranked in the top 50 tokens by marketcap ($645,96 mil) USD according to Coinmarketcap at time of publish.

Dragonchain’s initial ICO raised just over $13 mil USD. The team over at Blockchain-Trust however did note something pretty interesting when it comes to the belief and trust in the platform:

For those who were watching the project like me, a wallet belonging to the GENESIS block, perhaps an ETH foundation team member purchased 3600ETHs worth of Dragon tokens during the ICO, which at today’s rates is worth about $1.5 million. For someone from Ethereum to invest in a small project like this, gives it huge credibility, as no doubt they would of looked over the Github code, whitepaper and realize the potential gem that lies within Dragon Chain..

Dragonchain is currently available at KuCoin.

Dragonchain’s Twitter can be found here, along with their Telegram. The whitepaper can be found here, please read it fully along with the very detailed FAQ on their site. Always perform your own research, this is not financial advice.

SophiaTX – Blockchain for business. Blockchain integration with SAP and enterprise software.

If you’ve ever worked for a business larger than 50 people, chances are they utilize SAP. SAP offers some of the top enterprise software Germany has to offer, with over 335,000 customers in 180 countries and revenues in 2016 of 22 billion Euros.

SophiaTX styles itself as blockchain for business, and their objective is to create a business blockchain platform and marketplace. The platform itself will contain open source APIs to connect primarily with SAP and other enterprise software, used by most of the biggest multinational corps across the world. A pretty ambitious plan right? According to one of their press releases, 87% of global businesses use SAP, along with 98% of the top 100 highest valued brands in the world also utilizing it. If blockchain can get its fingers into this market, SophiaTX could be a key tool for businesses.

Two companies are behind $SPHTX. DECENT is a blockchain-based digital medium distribution platform, whose token $DCT currently has a marketcap of 105 million USD. The other team are from Venaco Group, a ‘best in class’ SAP advisory and implementation firm.

The ICO was opened on 7th of Dec 2017, and finished just 10 days later on 17th Dec 2017, a fairly short run when most firms ICOs run for months. They did manage to raise the equivalent of $7.3 million USD, priced at 1 SPHTX = 0.00062789 ETH. A quick video used to market the ICO is here, but doesn’t have much content to be honest, their blog is a much better read to see some actual use cases.

The Product

As broken down by the SophiaTX whitepaper, there’s three core elements to the business.

  1. A blockchain built for business.
  2. a development platform to integrate blockchain and SAP/enterprise apps.
  3. Marketplace for companies and communities to buy/sell apps or data.

The blockchain itself is  a hardfork from the Decent coin,as stated in an interview with CEO Jaroslave Kacina by Bitcoin Magazine. Interestingly, the testnet blockchain is using Delegated Proof of Stake, so avoids costly mining in terms of both transaction fees and electricity. While proof of stake may not be ideal for a distributed consensus protocol, for a business app such as the one SophiaTX is developing it could be ideal. Being centralised also means they can bring the product to market faster, and is easier to keep secure. Data security is a key selling point to large firms with data breaches being all too common in the last few years. If you plug a email you’ve used over the past 10 years into HaveIBeenPwned chances are your data will have been exposed by atleast one company.

This does raise some questions about the utility of an ERC20 token on the ethereum blockchain, when the actual product is a private blockchain, with companies even being able to licence their own private blockchain. Isn’t that just a database?

However, from what the whitepaper says, and responses from the team in their Telegram chat, once the mainnet is online (Q3 2018 according to page 12 of the whitepaper), the ERC20 tokens will be swapped for those on the SPHTX mainnet, and used to purchase assets on the marketplace, licencing for private blockchain, reward for devs when customers are using dapps, and to payout transaction fees and rewards for miners validating transactions.

Partners and Projects

SophiaTX has recently signed a joint letter of intent with a Riyadh-based logistics company that every year handles more than 2 million tons of cargo. The intent is to bring blockchain to the pharmaceutical industry by facilitating a track and trace product across manufacturing processes, quality assurance points, shipment, and receipt of the products.

Sounds a little like modum but encompassing the entire supply chain, not just the shipment to end users from the manufacturers.

According to the press release from SophiaTX: “Each of the current top twenty prescription drugs (amounting to 10% of the global market in 2016) is produced by a company using SAP software products within their sourcing, manufacturing, or supply chain processes. SophiaTX’s integration with the system will allow pharmaceutical companies to write their products directly into the blockchain, thereby addressing issues of counterfeiting; compliance; supply chain conditions; traceability and recalls.”

Modum, Ambrosus and Waltonchain have all cited counterfeiting, traceability, recalls, and compliance as a key area they are seeking to disrupt with their business model, so it’s no surprise SophiaTX are seeking to do the same. However by integrating SAP into their model, it could potentially be much easier for firms to integrate blockchain into their existing systems.

Even more exciting than this, is the demonstration of a proof of concept at a recent blockchain seminar in Zurich, where the team demonstrated sending a variety of documents between SAP systems. An invoice was created within SAP, then transferred via the SophiaTX testnet to another firm using another SAP system. Read more over on their blog.

Competition – SAP itself moving into blockchain tech.

What is a concern is SAP is moving into blockchain tech, which poses the question – Why would you need a third party when SAP is already developing in the field? Surely they wouldn’t want to miss out on the huge revenue this disruptive new tech could bring to enterprise across the country.

Back in November, SAP announced the addition of 27 new members to the its blockchain program, from across major industries – including pharmaceuticals and logistics. At the same conference they announced three key use cases they hope to standardize across digital supply chains, these include:

  • SAP asset intelligence – a registry of equipment OEMs can use to share asset information to improve uptime and service.
  • SAP distributed manufacturing – An app to connect manufacturing with supplier and technical cert companies.
  • SAP transportation management – International trade on the blockchain to reduce fraud and theft.

All seems a little scary for SophiaTX. However, SAP’s project Leonardo (Blockchain as a Service) on which these 3 use cases are being built on, has been described as ‘relatively expensive‘ for smaller firms, and less transparent as it is cloud based by Kacina. We also MUST remember, the founders of SophiaTX (Venaco Group) are a company that specializes in SAP advisory services and implementation of SAP. These guys can target custom blockchain solutions and its integration with SAP, not just a few standardized use cases. This here is where SophiaTX can make a real name for itself.

Token Economics

Total supply currently lies at 350 million tokens, and the future total supply will sit at no more than 500 million tokens, with 70% of the tokens dedicated to development, operations, marketing, team will not be sold for 12 months after the initial SPHTX generation. Circulating supply sits at 202.5 million after adding the 30% of the team tokens, plus TGE tokens.

Currently marketcap is unavailable as ICO has only recently ended,  but ranked 1135 on coinmarketcap at time of publishing.

*Update*

Previously I didn’t list the marketcap as I couldn’t confirm if the 30% of the team tokens not required to be held for 12 months was to be included in the circulating supply. As of 20/01/18 it sits at $238 mil USD.

$SPHTX is only available on QRYPTOS, and Cobinhood, but hopes to be listed on Binance and KuCoin soon

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.

Modum – Real blockchain utility, in a sea of vaporware. Part 1 – From the whitepaper to mass production.

So, what is modum? Luckily for me, there’s a little video here which is a great showcase for the tech and what it does. Briefly, Modum is a supply-chain monitor for the pharmaceutical sector that enables companies to comply with legislation from the EU regarding the delivery of medicinal products. Modum’s tech is a passive monitoring device that sits in with shipments to monitor the temperature. During the shipping the temperature is monitored, and when received by the customer, the data is reported back to the blockchain and is publically viewable to the distributor, and the customer. Currently some drug companies are shipping in temperature-controlled containers which are expensive, or use other data-logging devices like used in food distribution, which is unnecessary.

According to Modum’s whitepaper there are over 200 million shipments a year in the EU which would need to be monitored to comply with EU law, and if Modum can capture just a fraction of that market, it’s big money. Modum believes cost-per-shipment can be reduced up to 60%, that would be around 10 USD per shipment. They’ve stated the business has the potential to reduce the industry’s expenses here by up to 3 billion USD. Fairly impressive right. What’s even more exciting is since 2016 has already conducted several pilot programs with off-the-shelf tech, recorded over 10K datapoints and have close contracts with a $5+ billion revenue company. The whitepaper is clearly states the Modum system is being integrated with the leading last-mile logistics service provider in Switzerland, and three pilots completed. Announcements of partnerships with companies is now common in crypto, with developers working together, but this is a huge step in a company having blockchain tech adapted on such a large scale.

In the latest CEO update the first 200 prototype sensors have arrived, and mass-production of 10,000 has been set up. One of the issues brought up in the whitepaper from the first pilot was the need for quicker connectivity between the logger and mobile application, data transfer speed boosted, and a proper UI for data analysis created. This was addressed in the two further pilots, and the production of 10K sensors is an enormous investment by the company. Combined with the news of a contract signing, this is a strong message of confidence in the product from the customer and modum.

 

Modum’s prototype asset tracker was chosen by Canadian company Nordic Sensors as one of eight products for demonstration at the Consumer Technology Association, a huge technology conference held in LA. Variosystems was mentioned in a previous update as being involved in the production of the prototypes back in August. Modum on Dec 12. was announced as the latest member of the Trusted IoT alliance, the open source software consortium. So far the group consists of some huge names in technology, such as Bosch, Cisco, and UBS. Other recognizable names in crypto such as QTUM, vechain, IOTA and consensys are also members.

Alongside its announced partnerships, Modum’s physical location could also be an important factor to its future success. They are currently based in Zurich, near to Basel – European pharma hotspot. Novartis, Hoffmann-La Roche, Basilea Pharmaceutica, Straumann and Actelion have their HQs in Basel. Pascal Degen, the Head of Sterile Packaging at Novartis is also a member of the Modum team. Nearby is Zug, home to Crypto Valley which has KPMG as a strategic partner, and Crypto Valley Labs, where Blockchaingers, organizers of previous hackathons are based. From an academic perspective, partnerships with staff from University of Zurich and University of St. Gallen, such as Prof Burkhard Stiller (the communications chair at Zurich) and Prof Erik Hofmann (expert in strategic supply chain management and author of Supply Chain Finance and Blockchain Technology) all point towards a top-tier product based in reality.

What we can see here is a clear business model that concentrates on a specfic market, that also has potential for large and consistent revenue stream. The product is proven and has real backing across the pharma industry and academia. If you haven’t already I highly recommend you read the Modum Whitepaper.

Part 2 will contain token structure, performance in the market so far, concerns around its potential classification as a security and potential competitors in the cryptosphere and across the industry.

You can purchase Modum at Binance and KuCoin.

Part 2 is located here.