Ambrosus — The Gatekeeper

TL;DR. Ecology:4. Technology:4. Decentralization:2. Valuation:3. Rating:3/10

Introduction

Ambrosus was introduced on bitcointalk.org on 19th of July 2017. The project, like a multitude other cryptocurrencies, focuses on blockchain and supply chain integration for mainly the food industry. This integration is done through the use of physical sensors and digital smart contracts. The project, being initially Ethereum-based, received initial technical support from Ethereum co-founder Gavin Wood and Provenance co-founder and former Head of Security at Ethereum Dr Jutta Steiner. It also received support from well-known professor and food expert Megan J Povley.

On 11th of August 2017, Ambrosus announced a partnership with Trek Therapeutics to apply integrated sensors and smart contracts to pharmaceutical drug manufacturing in Trek’s clinical development program. The issue this partnership tries to tackle seems to be the labor-intensive process of regulatory oversight. On 16th of August, Ambrosus revealed their peer-to-peer food market and invited people to participate on the Ethereum Kovan testnet.

On the 26th of August, the much anticipated ICO details were released. The token generating event (TGE) date was set to 13th of September 2017. During this TGE, 40% of all Amber tokens were reserved for the pre-TGE and TGE. The other 60% were allocated to private investors, partners, advisers, a developer pool and a security and bounty program. During the pre-TGE, a discount was set on large contributions. A hard-cap of CHF 100M was set, meaning the total valuation of all tokens were set to CHF 250M should the cap be reached. A few days before the TGE, Ambrosus decided to delay the TGE two days due to fear of hackers disrupting the event. A number of security processes were added as well.

Ambrosus had to delay the TGE for a couple of days more, while a security audit was done. On the 19th of September, Validity Labs completed the audit which passed without serious issues, and the TGE kicked off shortly thereafter. In the end of October 2017, the TGE finished and all AMB ERC20 tokens were released to TGE participants. The high hardcap was never reached.

On the 24th of January 2018 Ambrosus joined EEA, Enterprise Ethereum Alliance. As of February 2018, the project had various pilot programs in place but seemingly no real on-chain use where businesses actually had acquired the AMB token to interact with smart contracts. On the 26th of February, Ambrosus Alpha was released for the public. With this release the public could finally experiment with and build on top of AMB-NET, the Ambrosus Network. On the 7th of March, a partnership with the Swiss Coffee Alliance was announced. Potential symbiosis effects were considered to be provenance validation improvements on coffee supply chains, all facilitated by the AMB-NET.

In May 2018, the economics of the Ambrosus network were finally presented. The project sought to create a Proof-of-Authority (PoA) tiered master node system where the most important of those, Apollo nodes, were responsible for processing transactions and executing smart contracts. Hermes nodes were to act as data publishers. Atlas Omega, Atlas Sigma and Atlas Zeta nodes were to, based on different storage bandwidth, store published data. And finally, Perseus nodes were simple peer nodes (as opposed to master nodes) for regular users. Master nodes were asked to stake AMB tokens to participate in the network (Apollo: 250 000 AMB, Hermes: 150 000 AMB, Atlas: 75 000/30 000/10 000). All network transactions were going to be processed with a fuel/gas named Nectar, not to be confused for a separate token.

Together with the crypto-economic specifications detailed above, Ambrosus released AMB-NET Beta 0.95, a permissioned Ethereum blockchain with the PoA consensus mechanism. On the 23rd of July, the plans for mainnet 1.0 were outlined. Mainnet was scheduled for the 31st of July and promptly launched with Ambrosus-controlled nodes. As September arrived, the team went public with details on the master node onboarding process. Master node applicants were encouraged to try out the test net first in order to have a smooth migration to mainnet later on. In this same article, the team confirms an inflation of 2% in the form of block rewards to Apollo and Atlas nodes — those who validate and store data.

Ecology

It appears that the Ambrosus team, before the TGE occurred, was contacted by ratings firms asking for donations. The team claims that they refused all these requests as it basically is bribery. There is no reason not to believe this as they did get some low grades in a couple of these reviews.

Just before the TGE, Ambrosus ran unprofessional bounty campaigns where bitcointalk.org users were paid in tokens if they changed avatars or wrote blog articles on the project. BD Ratings is of the opinion that this is not marketing — it is spam and propaganda — because the users will obviously not get paid of they bring up too negative aspects of the project. Of course, this campaign resulted in uncountable bounty issues where BCT users after the TGE bombarded the ANN thread with inquires about their bounties. Even long in to 2018, BCT bot-users continuously commented with stupid one-liners in some kind of astroturfing campaign.

In terms of community engagement, Ambrosus has been active in publishing blog posts and holding deep and broad AMAs. The team seems to have grown continuously during the year and is constantly attending meet-ups and conferences. In August 2018, the team expanded yet again.

As mainnet launched, token activity has started moving from the Ethereum blockchain to the native Ambrosus blockchain. As there currently is no block explorer, it is hard to quickly evaluate this activity however. BD Ratings hope to find that real, large companies or other organizations are actually utilizing the blockchain, because the partnerships announced have been numerous. When there is strong evidence of real-world use instead of various PoC or pilot projects, the Ecology rating will increase.

All in all, the Ambrosus team seems to really know what is missing in certain supply chains like food or pharmaceuticals and they have a plan for how to fill this gap. During 2019 we will see the first results of whether the sensor-blockchain integration can impress stakeholders or not.

Grade: 4

Reasons: Bad bounty programs. Possibly good application of public blockchain. Mainnet just recently up and running. Team interacts with many interested organizations.

Technology

Ambrosus have made use of security audits. This practice was first seen before the TGE occurred in 2017, and then later for some of the smart contracts. Allocating resources to auditing parties is positive. Additionally, the main GitHub repository is updated regularly by multiple developers.

In general, the Ambrosus team seems to be technically competent, and they are not just copying a code base while tweaking a few parameters. Instead, they have developed a totally new blockchain while also integrating sensor hardware with the smart contract functionalities that the network facilitates. BD Ratings does deem the whole tiered master node system a bit complex, especially when there is stake slashing involved. Only by years of battle testing can the construction prove resistant and game theoretically functioning.

Grade: 4

Reasons: Security audits. New, untested code base and consensus mechanism.

Decentralization

During the TGE, bonus tokens were allocated to those who contributed a lot of ETH, causing an increased and unnecessary risk of large AMB holders that then also have better chances to obtain master node slots. When analyzing the TGE in general, it seems to BD Ratings that it was problematic also in the sense that Ambrosus and affiliates reserved a large portion of all tokens for themselves, causing a direct threat to the integrity of the consensus mechanism in the long run.

Ambrosus has earlier stated that they have at least 20 NDAs (Non Disclosure Agreements) with other organizations. This is somewhat problematic from a decentralization point of view, where one actor is managing secret business agreements that may affect decisions taken regarding the blockchain itself. In the same basket of problems is the fact that a for-profit company sits in the middle of the public blockchain. This is a central point of failure and something regulators can grab hold of. The Ambrosus team seems conscious of this fact as they recently added a long legal disclaimer in an otherwise purely technical blog post.

Finally, all Apollo master node operators have to complete KYC to be able to participate in the consensus process. Ambrosus is the gate keeper, and the stated reason for this is to keep adversaries away. This makes the blockchain extremely centralized and makes BD Ratings question the choice of technology altogether (why not just run a database?). Also in the very long run, it is Ambrosus’ plan to control a large portion of all Apollo master nodes. And to make matters even worse, Ambrosus also reserves the right to provide Apollo node spots to strategic partners. This opens up for all kinds of attack surfaces like bribing in order to obtain a slot.

Grade: 2

Reasons: Ambrosus in control of many Apollo master nodes. Token concentration.

Valuation

At time of writing, Ambrosus is worth around USD 35M when including the total supply. This is below the valuation of similar ecologies like VeChain and Waltonchain but still remains too high considering the implications of mainly the centralized blockchain control.

BD Ratings conclude that what Ambrosus is doing or trying to do is logical and a legitimate attempt to mitigate fraud and corruption in multiple sectors with obfuscated, siloed supply networks. This rating however concerns the AMB token and not the blockchain use-case per se, which seems quite promising indeed.

What really does lower the total rating for the token is the high degree of centralization — a phenomenon that sucks most of the value out from any native network token that is used on that public blockchain. Any non-negligible valuation of Ambrosus absolutely stems from the properties of the blockchain that attracts value that seeks storage. The AMB tokens have no dividend function whatsoever, so it has to attract value in the same way Bitcoin has attracted value — it has to be a safe haven under as little central control as possible. It has to get rid of its gatekeeper.

Grade: 3

Reasons: Centralization.