Developing a Thesis on Blockchain Using Crowd Sales & ICOs as a Lens
I’ve been involved with Blockchain as hacker, investor and miner of various coins since about 2013. It’s not unheard of that early participants in Bitcoin, Ethereum and other Crypto-assets have accrued generational wealth due to the exponential rise in value of these assets. At just about every price point some had postulated we are in a crypto-bubble and this shall pass. I don’t know if we are in a bubble however since 2014 there has been $1.6 Billion dollars allocated to about 160 ICO’s or Crowdfunding representing about $113 Billion dollars in market capitalization created.
I’ve invested some time reading and rereading white papers, drilling into Blockchain projects on github and their respective foundations seeking out thought leaders, combing crunchbase.com, attending conferences and Meetups and talking with Businesses, Investors and Engineers about all things Blockchain in order to develop an informed perspective of the ecosystem, challenges, opportunities and where we are and where things could go. In this post we are going to look at about 30 players who have done an ICO prior to June 30th 2017 and categorize them and think out loud.
A quick background for context on where I’m coming from and where you can expect bias in my thinking. I was fortunate enough to cut my teeth in the Internet 1.0 economy, living through the dot.com bubble and crash, helping to build xSPs, DevOps, Cloud, Big Data & Analytics platforms and companies. So I pretty much grew up building and running Internet/Distributed systems in production at scale, serving enterprise customers with serious availability, scalability, security and compliance requirements. On this journey, I spent close to 10 years at once industry Titan, EMC. While at EMC I had the opportunity to work for people that forever shaped my thinking and exposed me to experiences in corporate strategy and execution any MBA student could only dream of. Because I was in the right place at the right time and worked for amazing people who took me under their wing, I was able to live and breathe corporate strategy, participate in the due diligence of hundreds of companies, acquisitions & integrations of a few major players such as VMware, RSA, Data Domain and Nicira. While at EMC Ventures we led or participated in 20+ investments operating a billion dollar plus portfolio investing in ARISTA Networks(IPO), Joyent(acquired by Samsung), ServiceMesh(acquired by CSC), Puppet Labs, Maginatics(acquired by EMC), ParAccel(AMZN Redshift) to name a few as well as the spin-out of Pivotal and VCE Joint Ventures. We would endlessly prepare for the EMC Board extensive market analysis of incumbents positions, emerging players, business and technology trends. We ran competitive gaming and scenario analysis, building the virtual chessboard our strategy would be played out upon. Ultimately we made a long string of bets incubating new businesses, doing extensive M&A and strategic Investments, executing against our vision.
Over the years I have learned that disruptive technology, business models and secular trends deserve respect, repeatedly they have been shown to slowly grind away the edge for incumbents. Startups gain a small foothold then expand up market, further eroding the incumbents’ foundations while they focus on expanding features and growing their most demanding customers, grinding to meet quarterly market expectations, until they lose their footing to those pesky upstarts and fall or wither away to irrelevance. The list is so long, I’ll spare you from an iteration over the headstones in the enterprise IT graveyard. This is classic Clayton Christensen stuff; yet it’s amazing how history ruthlessly repeats itself.
I’ve tried to conjure up the strategic mindset here and re-engage in a meaningful level of diligence and discipline and develop a thesis on blockchain using crowd sales or ICOs as a lens into the blockchain ecosystem. I’m going to begin thinking out-loud about the Blockchain players to develop an understanding and flesh out a perspective on challenges, opportunities and risk as well as where we are and where things could go. Blockchain is incredibly fast moving, so I’ve constrained the scope of this post to looking at about 30 players who have done a crowd funding or released a token prior to June 30th 2017 using the Coindesk list below sorted by Ethereum tokens held. Why this list? I needed somewhere to start and in early July this is where the money was. Over the last month the landscape has grown which I will continue to follow and comment on.

I’ve also included Tezos in this post because I did quite a bit of diligence prior to their ICO which raised $232M on July 1st. I know that I don’t understand everything going on and all of the permutations of each project nor the interactions between them so let’s make this a discussion. Please call me out where my thinking or details are off.
This is the first post of what I intend to be a series of posts on blockchain business models and technology disruptions in a fast moving landscape. I’ve categorized my high level summaries and opinions by Enterprise, FinTech: Markets and Exchanges, Social Media and Advertising, Services, Gaming and Entertainment and Funds and Investment Management Platforms business models. I’ve included links to the websites, white papers, crunch base, coinmarketcap.com, etherscan.io for their funding as well as blogs and analyst commentary for the reader to double-click where interested.
This list covers approximately $700M in deployed capital, which is enough capital to seriously impact or shape any industry. It is also worth noting that, their capital may have been further amplified as some of these organizations ICO’ed when Ethereum was trading at less than $15 and have held their assets in Ethereum or Bitcoins multiplying their balance sheets significantly over the last year with Ethereum now trading above $250 today.
Enterprise
Headquarters: Switzerland
ICO: $232M
Tezos supports smart contracts, but uses a different approach for consensus, governance, and smart contracts than Ethereum. Delegated proof of stake is used for consensus rather than proof of work. On chain governance will enable the project to potentially avoid forks and operate more smoothly than of chain governance seen in other projects. The use of zero knowledge proofs may also allow Tezos to scale without sharding or side chains.
Tezos aspires to be a VMWare like hypervisor for blockchain, enabling other blockchains to run atop of it while solving the current scalability and security issues of Bitcoin/ETH/ZCash, and implementing proof of stake as opposed to proof of work at launch. The project has been worked on since 2014 and is being supported by Tim and Adam Draper of DFJ and BoostVC respectively. I’m not sure how many OCAML developers there are but the team in France behind the project seems to be on the leading edge of it.
I’m pretty bullish on Tezos but it’s not going to be easy for Tezos or EoS to displace Ethereum nor to reproduce the network effects which have made Ethereum successful.
https://www.tezos.com/static/papers/white_paper.pdf
https://www.tezos.com/static/papers/Tezos_Overview.pdf
Headquarters: Poland, Warsaw
ICO: $8.6M
Golem is creating a decentralized distributed super-computer. Think IaaS, PaaS and AppStore connecting computers like HPC/Grid computing attempted to in the past but enabling direct payments between requestors, providers and software developers with no middleman. Golem is focused on supercomputing first and then plans to move up the value chain and make a direct play against AWS/Google/MSFT Azure. Their roadmap is very ambitious but this is obviously huge if they can pull it off. The core dev team needs to keep a keen eye on security or risk having their distributed super-computer turned into a massive DDoS engine like LOIC or Mirai botnet. I’d also be concerned about data leakage from Golem jobs or privilege escalation on the local host.
http://golemproject.net/doc/DraftGolemProjectWhitepaper.pdf
https://www.crunchbase.com/organization/golem-network
https://coinmarketcap.com/assets/golem-network-tokens/#charts
https://etherscan.io/token/GOLEM
https://blog.golemproject.net/
https://www.smithandcrown.com/sale/golem/
https://www.smithandcrown.com/golem-will-enable-p2p-computing-market/
Headquarters: Delaware/Georgia
ICO: $30M
Storj is a peer-to-peer, blockchain based distributed object storage offering end-to-end encryption and high availability similar to traditional cloud storage offerings like AWS S3. I really like the vision of Storj, as well as Sia, IPFS and FileCoin in general. After reading the whitepaper however, I was left feeling there was lots to be done, and having concerns about design decisions with regard to scalability and usability. Many critical decisions are pushed to the consumer such as key management, negotiation of shard size and knowing when to fill your smaller files with 000’s to preserve privacy to dissuade side-channel attacks. Redundancy Scheme selection is also a parameter which needs to be set by the data owner. As you would expect, Storj uses NAT Traversal and Reverse HTTP Tunneling but states that “the data owner has to shoulder the significant burdens to maintain availability and integrity… ” I would have expected that Erasure coding would be optimized out of the box for redundancy and high availability. I would also expect that network traversal would be made seamless, removing friction to user adoption as a priority. Maybe service has taken care of all this during the client install and these only exist as historical artifacts in the whitepaper. If successful Storj could put a dent in box.com and AWS S3 businesses.
https://www.crunchbase.com/organization/storj
https://coinmarketcap.com/assets/storj/
https://etherscan.io/token/storj
Headquarters: Lyon, France
ICO: $12M
Iexec is building a distributed cloud services atop a decentralized blockchain which will leveraging their RLC token for service consumption. This sounds like SETI@home Grid monetized via RLC tokens on their own ledger using a protocol called proof-of-contribution for consensus. They position themselves as a cloud alternative. Their marketplace will offer DApps, Servers, Applications and Data via both on and off-chain services. The work sounds similar to Golem in that they intend to provide cloud services on top of a decentralized blockchain however, the whitepaper seems to focus more on the DApp bridge between on and off-chain compute and data than moving to hybrid and on to global HPC type workloads. If successful they aspire to enable an Internet-wide distributed computing platform built upon Grid computing and HPC DNA serving those as well as modern Cloud workloads which sounds pretty badass. As with Golem security needs to be a core tenant or they risk having their distributed compute resources turned into a massive DDoS engine. They also need to ensure good data stewardship preventing data leakage or privilege escalation on the local host mitigating evil.
http://iex.ec/wp-content/uploads/2017/04/iExec-WPv2.0-English.pdf
https://www.crunchbase.com/organization/iexec
https://coinmarketcap.com/assets/rlc/
FinTech: Markets/Exchanges
Headquarters: Zug, Switzerland, Tel Aviv
ICO: $150M
“The Bancor protocol enables built-in price discovery and a liquidity mechanism for tokens on smart contract blockchains. These “smart tokens” hold one or more other tokens in reserve, and enable any party to instantly purchase or liquidate the smart token in exchange for one of its reserve tokens, directly through the smart token’s contract, at a continuously calculated price, according to a formula which balances buy and sell volumes.” Bancor enables smart contract based token conversions enabling you to swap any token to another without requiring a counterparty to exchange with. Built upon Ethereum it sounds very similar to Augur which is built on top of Bitcoin. Bancor also enables user generated currencies for Long Tail crowdfunding projects. One example in the whitepaper is a musician seeking to produce a videos or albums could leverage the Bancor platform to hold their crowdfunding and the smart contract will facility the liquidity and conversion of the proceeds for use. If successful the smart contracts codifies the terms and liquidity of the crowd funding without requiring a counter pater per se. There are several participants in the ecosystems one being token changers who can act as arbitrageurs and market makers maintaining market equilibriums. Bankor also introduces token baskets which I see as similar to ETFs or index funds, which can synthetically be created using smart contracts across a basket of assets. The key advantages of Bancor over traditional exchanges are: continuous liquidity, no extra fees, no spread, predictable slippage, lower volatility. Overall there is very little technical details covered in the white paper. I love the idea but It’s crazy the amount of money raised on basically 7 pages of high level summary information. I’m an avid speculator and have participated in derivative markets for a long time, but there aren’t enough details her for me to get excited about this project yet. The team appears to have solid blockchain and prior startup exits possibly increasing the likelihood of success.
https://www.bancor.network/static/Bancor_Protocol_Whitepaper_en.pdf
https://www.crunchbase.com/organization/bancor-protocol
https://etherscan.io/token/Bancor
ICO: $12.5M
Headquarters: Gibraltar
Gnosis is creating a decentralized, permissionless and trustless prediction market and liquidity pool. Smart contracts that allow global markets, finance, gambling, insurance and information arbitrage to happen without intermediaries. Their architecture is built of three layers: Core (Oracles, Market Makers, Outcome Tokens), Services (Oracle platforms, Futarchy, state channels) and Applications (betting, information sales, insurance). This is a ConsenSys spokes company https://consensys.net/ventures/spokes/ who is a major player in developing the landscape.
I believe there are several key innovations discussed in their whitepaper.
1. State channels which are one of the two proposed mechanisms for fixing the Ethereum scalability issues today, the other being sharding. State channels allow async, ack and commit to what looks like an eventually consistent write to the Ethereum blockchain below it.
2. Futarchy is the creation of a metric that will measure a policy if implemented and feedback into the system optimizing outcomes. Sounds like choosing health criteria for algorithm optimization and then mutating against it to optimize system health like in genetic optimizations. An example discussed was placing bug bounties on your code where if exploited a bounty would be paid. Incentivizing the disclosure as opposed to the exploitation.
This is similar to the Augur project but Gnosis is focused on building a platform for decentralized prediction market applications where Augur is simply the market for these activities.
https://gnosis.pm/resources/default/pdf/gnosis_whitepaper.pdf
https://www.crunchbase.com/organization/gnosis
https://etherscan.io/token/gnosis
https://coinmarketcap.com/currencies/gnosis/
Headquarters: Delaware (California, SF)
ICO: $5.3M
Augur combines a prediction market with the power of a decentralized network to create a forecasting tool. Augur is a trustless, decentralized platform for prediction markets. It is an extension of the Bitcoin network and uses pegged sidechains. Which is about all you need to know, seems more straightforward than others, the contract (inputs and outputs) scripts are embedded in the bitcoin transactions. Augur uses a marketplace and market making mechanism called LMSR.
https://www.crunchbase.com/organization/augur-2
https://coinmarketcap.com/assets/augur/
https://etherscan.io/token/REP
https://medium.com/@akhounov/hopefully-impartial-comparison-of-gnosis-and-augur-f743d11d6d37
Token http://tokencard.io
Headquarters: London, England
ICO: $16.7 M
Token offers a smart contract powered debit card connected to the VISA/ATM networks enabling you to spend your crypto assets or withdraw into local fiat currency from anywhere. The token contract wallet layers on additional security with daily spending limits, ability to temporarily freeze the TokenCard, or drain to a secure address as advanced features. I love this idea and will be signing up as soon as it’s live. The few questions I have are with regard to traditional credit card fraud, if they are using the VISA or STAR Networks, I assume this mitigates some of the risk as a user but I’m not sure. The whitepaper is definitely worth the read. The project introduces a novel business model innovation enabling TKN holders to “Cash and Burn” their TKN in return for a pro-rata share of the licensing fees generated by the TKN Asset. When TKN’s are cashed and burned the smart contracts will pay out over time a perpetual dividend if I’m interpreting this correctly. I also like their global go to market strategy: bring TokenCard and the mobile app into China to drive scale in transaction volume. Having traveled to China extensively, they are ahead of the US and many countries with the adoption of cashless transactions, WeChat Pay and AliPay are everywhere and may actually have better penetration now than physical credit/debit cards.
http://tokencard.io/tokencard_whitepaper.pdf
https://www.crunchbase.com/organization/tokencard
https://coinmarketcap.com/assets/tokencard/
https://etherscan.io/token/TokenCard
Headquarters:
ICO: $1M
Plutus Tap & Pay, allows customers to pay at any NFC-enabled merchant using Bitcoin. Plutus app is effectively a Bitcoin wallet linked with their NFC card and App. Plutus has tokenized their rewards program with Plutons to incentivize use of the platform. Plutons are like your favorite customer loyalty program (think credit card points) that are vendor agnostic so you earn Plutons whenever you use the Putus NFC card for purchases. Plutus is deployed on the Ethereum Network enabling secure peer-to-peer exchange of fiat and Bitcoin with the smart contracts acting as escrow.
https://bravenewcoin.com/assets/Whitepapers/Plutus.it-White-Paper-v1.0.pdf
https://www.crunchbase.com/organization/plutus
https://coinmarketcap.com/assets/pluton/
Headquarters: Unknown
ICO: MKR was slowly moved on to the market, first through private sales, then via bitshares market, there wasn’t an ICO sale.
Maker is a decentralized autonomous organization on the Ethereum blockchain seeking to minimize the price volatility of its own stable token Dai against the IMF’s international currency basket SDR. Risk is managed with the Maker token MKR. It uses CDP( collateralized debt positions) and some financially engineering in an effort to stabilize the crypto-currency but sounding similar to bonds in the whitepaper. The key use case is long term bets in prediction markets, leveraged trading, hedging and derivatives. CDPs will allow token holders to manage asset leverage with less risk from volatility in the underlying. Remittance and forex volatility mitigation are all good use cases. Despite the complexity it’s a ERC20 contract on Ethereum. Although transparency is supposed to be built in, I imagine it will be difficult to really understand what’s going on much like Collateralized Debt Obligations before the subprime financial crisis. I imagine it will be difficult to really understand what’s going on with these like CDOs in the subprime mortgage crisis.
https://github.com/makerdao/docs/blob/master/Dai.md
https://coinmarketcap.com/assets/maker/
Headquarters: Singapore
ICO: $5.5M
Digix tokenizes gold on Ethereum, leveraging distributed ledger for its immutability, transparency and auditability. Digix offers a Proof of Asset Protocol (POA) and Digix Gold tokens (DGX) on Ethereum as a mechanism for gaining transparency into the supply chain and managing workflow of physical assets. Digix seems similar to Xaurum in that they both focus on mapping physical precious metals to blockchain technology however, the Digix whitepaper is technology focused and lays out a pretty compelling story as well as a debit card offering providing transactional ease.
https://www.crunchbase.com/organization/digix-global
https://coinmarketcap.com/assets/digixdao/
Headquarters: Slovenia
ICO: 851K
“Xaurum Golden Blockchain is a transparent ledger of accounts that accounts for the distribution of gold owned by the Xaurum Common Wealth, to provide an increasing base to Xaurum value”. The whitepaper is long and more about history and economics than technology or business strategy. Seems like a goldbug play, I have serious questions as to mapping reserves to the blockchain trustless world. Maybe I just don’t get it.
http://xaurum.org/TreatiseOnXaurum.pdf
https://coinmarketcap.com/assets/xaurum/
Social Media and Advertising
Headquarters: Switzerland
ICO: $99M
Status is an open source messaging platform and mobile browser to interact with decentralized applications that run on the Ethereum Network. This is a messaging app which includes twitter like features, DAppp marketplace, sticker market, tip to talk to reach out to those outside of your network, attention tax, user acquisition engine to grow engagement and a payment platform. They call out their intend to be WeChat running on the Ethereum Network for the world. Of Twitter’s 319M users ~47M are bots, Status seeks to remove bots. SNT tokens create Users-as-Stakeholders aligning interests of the network with the users as opposed to preferencing the Advertiser or Data Brokers. Other than being a DApp on Ethereum. It’s still in beta so couldn’t download but looks super cool once it’s available. Their app is integrated with: uPort, Gnosis, Ethlance, Aragon and a few others today. This could be a major play if they are successful in recreating the WeChat experience as seen in China and taking it globally.
https://status.im/whitepaper.pdf
https://www.crunchbase.com/organization/status-im
https://coinmarketcap.com/assets/status/
Headquarters: San Francisco
ICO: $35M
BAT improves the efficiency of digital advertising via tokenizing the exchange between publishers, advertisers, and users. Bat can be exchanged for advertising and attention-based services through Brave. Brave + BAT = The browser tracks where users spend their time, enabling quantification and rewarding publishers with BATs. Together they create transparency in the digital advertising market. Publishers benefit from the reduction of fraud and reduction of intermediaries to gain better attribution on advertising spend. Users, who opt in, receive fewer, better targeted ads with less exposure to malware. Out of all of the papers reviewed, BAT had one of the clearest articulated strategies. If others follow this could become a business model disruption to advertising as well as SaaS as a delivery platform in general.
https://basicattentiontoken.org
https://basicattentiontoken.org/BasicAttentionTokenWhitePaper-4.pdf
https://www.crunchbase.com/organization/brave-software
https://coinmarketcap.com/assets/basic-attention-token/
https://etherscan.io/token/BAT
https://medium.com/@attentiontoken
Services
Headquarters: Derental, Niedersachsen
ICO: $25M
The Aragon Network is a token-governed global digital jurisdiction, enabling entrepreneurs, investors and organizations to efficiently and securely transact and reduce risk. The core will be governed by smart contracts, however, there will be a decentralized court solution to arbitrate human conflict beyond what can be reasonably written in a smart contract. If successful this project is brilliant. The litigation process in the US is grossly inefficient and broken, It’s error prone and seriously advantages those who outspend the otherside. Aragon Core allows anyone to create the scaffolding and manage an organization on Ethereum. The project has a very long list of thought leaders and is building a strong list of partners. It would be great to see Aragon become the prefered jurisdiction for entrepreneurs and thus the equivalent of what Delaware is in the US.
https://github.com/aragon/whitepaper/raw/master/Aragon%20Whitepaper.pdf
https://www.crunchbase.com/organization/aragon-2
https://coinmarketcap.com/assets/aragon/
https://etherscan.io/token/aragon
https://blog.aragon.one/aragon-network-jurisdiction-part-1-decentralized-court-c8ab2a675e82
Headquarters: Zug, Switzerland
ICO $1.7M
Wings is a decentralized platform to create, join and manage projects as DAOs which is very ambitious. Wings combines Aragon like creation of Projects/DAOs via smart contracts written in Solidity run on Ethereum. Wings also enables crowdfundings like kickstarter and a forecasting market like Augur. Individuals and organizations can create and submit proposals to the Wings DAO community where they will be discussed, reviewed and proposals’ success factor forecasts will be conducted. The primary interface is via chatbots integrated with popular messaging apps which is definitely an out of the box user interface for something so broad in scope. The paper calls out that Wings will be built upon IPFS, Sia, Storj or Maid-Safe which says to me they are still in the early phases of defining how they will execute upon their vision.
https://wingsfoundation.ch/docs/WINGS_Whitepaper_V1.1.2_en.pdf
https://www.crunchbase.com/organization/chainlab#/entity
https://coinmarketcap.com/assets/wings/
Headquarters: Switzerland
ICO: $2.9M
Melonport is building the Melon protocol. Melon is a blockchain protocol built on top of Ethereum for digital asset management. The Platform enables participants to list, manage and invest in digital asset tokenized on the Melon protocol with transparency enabled via a decentralized exchange. In the green paper there is a case made for the need to manage digital assets whether collateralized physical assets, un-collateralized or Derivatives. Rather than investing in a hedge fund to gain exposure the Melon protocol provides a low friction solution with transparency and auditability. The open platform enables a competitive marketplace including modules for Registrar, Price Feeds, Exchanges, Performance and Management Fees. Participants will use Melon tokens to trade on the platform. I really like the idea of being able to securitize physical assets such as Art, Intellectual or Physical property into portfolios. The major question I have here is how do you ensure that once an asset is securitized, it is escrowed against out of band liquidation? Or What prevents me from securitizing an asset I don’t actually own? I believe this model has the potential to unlock massive illiquid value if successful. I can absolutely see building Venture and Hedge funds on top of Melonport.
https://github.com/melonproject/greenpaper/blob/master/melonprotocol.pdf
https://www.crunchbase.com/organization/melonport
https://coinmarketcap.com/assets/melon/
https://etherscan.io/token/melon
Headquarters: Fremont/Delaware
ICO: $7.34M
WeTrust aspires to be a collaborative, decentralized savings, lending and insurance platform that built upon Ethereum smart contracts. It eliminates the need for trusted third parties, allowing for lower fees and improved incentive structures operating on a globalscale. Their first product is a trusted lending circle or ROSCA. There is a massive opportunity to help the unbanked in the world with a full-stack alternative to the financial services incumbents. As with all blockchain offerings there is some friction to overcome, especially when targeting the unbanked and technologically under privileged. For example having Mist or Metamask installed and being able to manage their private keys, requires a level of sophistication which will need to be overcome. I’m personally very optimistic about their vision and would like to see them accelerate the scope beyond ROSCAs.
https://github.com/WeTrustPlatform/documents/blob/master/WeTrustWhitePaper.pdf
https://www.crunchbase.com/organization/wetrust
https://coinmarketcap.com/assets/trust/
https://etherscan.io/token/Trustcoin
https://www.smithandcrown.com/wetrust-new-financial-product-built-blockchains/
Headquarters: Sydney, New South Wales
ICO: $5.4M
ChronoBank.io is an ambitious project aimed at disrupting the HR and recruitment incumbents via a peer-to-peer marketplace similar to how Uber disrupted the taxi business. The whitepaper is primary focused upon the economics of a recruiting and labor hour prices per country which is tokenized into LH Coin (a labor hour currency) based upon the timebanking model in which workers trade labor hours for goods and services. The technical white paper is a must read if you want to dig in on the technology. The project will also create LaborX, a decentralized marketplace where people will be able to sell labor hours to anyone, which sounds like LinkedIn + Upwork/Fiverr. LH acts an an inflation hedge not due to the limited number of coins but due to the average hourly wages peg across countries. LH’s value grows over time with the rise in average wages insulating users from the inflation tax managed by central banks. My gut feeling is that the guidelines for selecting issuers of LH tokens is very conservative and at odds with the ICO wild west fundraising, perhaps this will adjust over time. The paper is definitely worth a read.
https://chronobank.io/files/whitepaper.pdf
https://www.crunchbase.com/organization/chronobank
https://coinmarketcap.com/assets/chronobank/
https://etherscan.io/token/TIME
https://blog.chronobank.io/tagged/bitcoin
https://www.smithandcrown.com/participate-chronobank-crowdsale/
Headquarters: Switzerland
ICO: $5.7M
Matchpool is a decentralized matchmaking service to help participants connect with each other. It can also be used as a more generic two-sided marketplace platform. The whitepaper describes the platform as Ethereum smart contracts handling participation and reward structures as well as the core game logic which makes it work. The platform employs Guppy token (GUP) for participation in the service. The service is unique in that it keeps a 50:50 ratio between the two sides/participants in the platform. They focus on profiling and pooling to connect users. Interactions are facilitated by two kinds of participants on Matchpool, joiners and hosts. The hosts are founders of the pool and define specifications of the membership and how they will monetize the pool via either entry fees, subscriptions and/or pay on delivery. And joiners are looking to be matched. This sounds like meetup.com meets a configurable contract driven dating site.
https://matchpool.co/wp-content/uploads/2017/04/mp_wp3.pdf
https://www.crunchbase.com/organization/matchpool
https://coinmarketcap.com/assets/guppy/
Headquarters: Austin, Texas
ICO: $620,000
Swarm City is a decentralized commerce platform. The project started out as Arcade.city, a ridesharing marketplace later to be rebranded as Swarm City. As part of the rebranding of Arcade.city ot Swarm City they expanded the scope from a peer-to-peer ride sharing network to a broader decentralized platform which can be used for other two-sided marketplaces. I don’t know if the sharing economy needs decentralized applications to optimize or this was only a mechanism to fund the project. Swarm City seems to have a much broader appeal given the general purpose use case. Swarm City was one of the wallets impacted by the Parity hack costing them ~44,055 tokens worth around $8.8million at today’s prices.
https://bravenewcoin.com/assets/Whitepapers/AC-whitepaper.pdf
https://github.com/swarmcity/sc-token/blob/master/token-exchange-miniwhitepaper.md
https://www.crunchbase.com/organization/arcade-city
https://coinmarketcap.com/assets/swarm-city/
Headquarters:
ICO: $3.4M
Lunyr is an Ethereum-based decentralized knowledge base like Wikipedia which rewards users with app tokens for contributing and reviewing information. The Lunyr platform leverages LUN tokens as a mechanism for monetization via advertising. This is a cool idea that maybe Wikipedia should do as well. This helps support operating the platform as well as maintains high quality content. If successful I could see non-profits stewards of information and open textbooks embracing this model rather than relying entirely on donations to operate.
https://bravenewcoin.com/assets/Whitepapers/Lunyr-White-Paper-ENG.pdf
https://www.crunchbase.com/organization/lunyr
https://coinmarketcap.com/assets/lunyr/
Gaming & Entertainment
Headquarters: New York, New York / Switzerland
ICO: $7.5M
SingularDTV is a blockchain entertainment studio and distribution platform with the associated digital rights management. SingularDTV offers up a decentralized entertainment crowdfunding platform for artists and producers. SingularDTV’s platform empowers artists and creators with a suite of tools to create, fund and manage projects from development to distribution. The platform tokenizes work with SNGLS, where token holders participate in show revenues and IP created. The token can also be used to pay for and view show content. One interesting twist on other Crowd funding we have seen to date is the creation of a concept called a CODE ( Centrally Organized Distributed Entity) which looks and smells like a DAO (Decentralized Autonomous Organization) used by other blockchain foundations and projects. Token holders of SNGLS own a small slice of the CODE. The white paper structures things into the smart contracts system (SCS) living on the Ethereum blockchain and two entities: the GUARD which will audit, deploy and operate and the Workshop domiciled in Switzerland.
https://coss.io/documents/white-papers/singulardtv.pdf
https://www.crunchbase.com/organization/singulardtv
https://coinmarketcap.com/assets/singulardtv/
https://etherscan.io/token/SNGLS
Headquarters: Boston, Massachusetts
ICO: $6.1M
FirstBlood is a decentralized eSports gaming platform that allows players to directly challenge each other to matches and win rewards on popular games such as League of Legends and Counter-Strike. Built on top of the Ethereum blockchain, the Firstblood platform has tokenized its atomic unit economics. Transactions are publicly verifiable and resistant to counterfeit. First blood reduces counterparty risk in eSports platforms protecting users against organizational corruption, fraud, embezzlement or theft by hackers. Each match will be verified by two groups: Witnesses and Jury Voting Pools. Witnesses are people running the Witness nodes which verify wins when randomly selected, they are paid a reward like miners in traditional blockchains reducing the risk of fraudulent reporting. The Jury Voting pools, is a system where participants will be randomly selected to adjudicate issues. The platform participants monetize the network via Hosting Tournaments, Referral Rewards, selection for Jury Voting Pools, Lessons and Mentorship. The eSports market market is expected to grow to close to 2M by 2018 and FirstBlood is positioned to participate in capturing a slice of this. New markets are land grabs where winner takes most. A well-funded venture will need to partner aggressively and gobble up market share to build a sustainable edge.
https://coss.io/documents/white-papers/first-blood.pdf
https://www.crunchbase.com/organization/firstblood
https://coinmarketcap.com/assets/firstblood/
Headquarters: Ether, North Carolina
ICO: $1.8M
vDice is a blockchain-based betting platform built on top of the Ethereum network. vDice employs smart contracts for gaming logic and claims to be entirely on chain with bets being processed through Oracles. vDice uses random.org APIs as their source of randomness in game, lending them trust not available in traditional casinos. vDice operates on a 1.9% Edge of all bets as their business model. It is surprising that this project was able to raise $1.8M with a white paper that is less than 5 pages however, according to smithandcrown the project is now profitable. There are core developers from the Ethereum project on this team which may account for its success as much as their business model.
https://bravenewcoin.com/assets/Whitepapers/vDice-ICO-Whitepaper-English.pdf
https://www.crunchbase.com/organization/vdice
https://coinmarketcap.com/assets/vslice/
Edgeless https://edgeless.io/
Headquarters: Lithuania, German
ICO: $2.65M when Ethereum was < $15
The Edgeless team is building a decentralized casino which provides absolute transparency to its customers, as well as zero edge game play for Blackjack, Video Poker, Micro-limit Dice and Sports Betting. The platform is built atop Ethereum smart contracts enabling transparency and trust not available in traditional casinos. Reading the whitepaper, the Edgeless business model derives revenue from two sources, first players imperfect play and second from management fees for sports betting. Double clicking into the first source of revenue it becomes clear that the casino still charges an edge. The white paper state that since Blackjack and Poker are games of skill and luck, only players who make perfect decisions will earn 0% edge everyone will pay to play. Having played my fair share of poker I’m interested in how perfect play is defined. If you have read The Mathematics of Poker
there are lots of way to define positive expectancy.
Edgeless was one of the wallets impacted by the Parity hack costing them ~27,000 tokens worth about $5.4M at today’s prices.
https://github.com/EdgelessCasino/White_paper/blob/master/White_Paper.pdf
https://etherscan.io/token/Edgeless
https://medium.com/edgeless/ultimate-edgeless-faq-22081ae768aa
https://www.cnbc.com/2017/07/20/32-million-worth-of-digital-currency-ether-stolen-by-hackers.html
https://www.smithandcrown.com/edgeless-ico-ethereum-casino-no-built-house-edge/
Funds & Investment Management Platforms
Headquarters: Slovenia
ICO: $10M
ICONOMI is an open fund management platform enabling the “uberisation” of fund management, removing barriers for investment management while providing transparency. Iconomi claims to be an EU compliant regulated service operator. Their offerings include an Open Fund Management Platform (OFM) and two financial instruments, the Coin Traded Fund (CTF) and the Coin Managed Fund (CMF) respectively. The OFM platform enables fund managers to manage funds and ICONOMI provides a marketplace, portfolio management tools and the smart contract infrastructure to enable management fees. The Funds offer their own tokens with the CTFs trading on exchanges and CMFs trading only within the ICONOMI platform.
Overall, I find the ICONOMI model pretty interesting, potentially democratizing fund management. Unfortunately, Residents/Citizens of the United States and a few other countries are not eligible to use the platform or funds, likely due to SEC and accredited investor rules.
https://coss.io/documents/white-papers/iconomi.pdf
https://www.crunchbase.com/organization/iconomi
https://coinmarketcap.com/assets/iconomi/
https://etherscan.io/token/ICONOMI
https://www.smithandcrown.com/iconomi-raises-10-million-ico/
Headquarters: Singapore
ICO: $7.7M
TaaS is a tokenized closed-end fund designed to reduce the risks and technical barriers of investing in the blockchain space. Built on a profit-sharing smart contract, TaaS introduces a Token-as-a-Service business model, allowing investors to subscribe to the fund’s income stream. TaaS is also building a Bloomberg-like portfolio management and audit platform called Kepler. TaaS allows investors to participate in blockchain markets without dealing with hurdles, risks and technical barriers associated with owning, transferring and trading cryptocurrencies and tokens for a 15% management fee.
I like the business model and find it pretty interesting. Unfortunately, Residents/Citizens of the United States and a few other countries are not eligible to invest, likely due to SEC and accredited investor rules. A 15% management fee also seem very aggressive compared to the traditional 2% management fee and 20% performance bonus structure seen in hedge funds, PE/VC and commodity pools.
http://taas.fund/media/whitepaper.pdf
http://taas.fund/media/presentation.pdf
https://www.crunchbase.com/organization/taas
https://coinmarketcap.com/assets/taas/
Headquarters: Delaware/Singapore/Cayman Islands
ICO: $10M
Blockchain Capital is a traditional venture firm that has done a lot of blockchain investing going back to 2013. They recently raised a $10M ICO. Its of particular interest in that it’s the first ICO Fund allowing US Residents/Citizens to invest under SEC D506(c) rules. This fund potentially provides a blueprint for others fund managers to follow, seeking to invest in ICOs. Blockchain Capital charges a premium to traditional funds with a 2.5% management fee and 25% performance fee on returns.
https://www.smithandcrown.com/sale/blockchain-capital/
https://www.crunchbase.com/organization/crypto-currency-partners
https://coinmarketcap.com/assets/BCAP/
https://etherscan.io/token/BCAP
https://medium.com/@blockchaincap
https://www.smithandcrown.com/sale/blockchain-capital/
I would be remiss if I don’t include a few links to an opinionated views on their ICO:
https://medium.com/@ico_dna/bcap-token-offering-stone-cold-investment-bonkers-9987e6ca5f31
https://medium.com/@ico_dna/bcap-token-offering-the-memorandum-challenge-f62f6c8a16c6
https://medium.com/@ico_dna/bcap-token-offering-still-reading-the-memorandum-45d99447b84c
https://medium.com/@ico_dna/bcap-token-offering-arguably-the-most-lawyered-up-ico-ever-554d8a416e67
Summary
$1.6B dollars allocated to a space has created $113B in market capitalization. This capital allocation creates an opportunity for massive disruption in business models and technology that could absolutely disrupt the status quo in many industries. Blockchains and Decentralized Autonomous Organizations are often global from inception and span traditional jurisdictions, regulations and borders. Blockchains, Distributed Ledger Technologies and DApps have the potential to be unstoppable due to their decentralized nature. The only real choke points for crypto-currencies and their tokens is at the exchanges. As such exchanges have become honeypots for regulators and governments scrambling to stay abreast of change.
We have looked at projects across many industries: Enterprise, FinTech: Markets and Exchanges, Social Media and Advertising, Services, Gaming and Entertainment, and Funds and Investment Management Platforms, yet this posts only covers 30 of the 160 ICOs completed nor emerging projects. Blockchain clearly brings massive potential, opportunities and the associated risks with change at scale. I don’t know how long it will take, which projects will succeed or blow up but I do believe we are witnessing a creative destruction that will drive a paradigm shift with global implications.
We are still early on the path to broad adoption of blockchain technology and services. Ease of use, scalability, efficiency, interoperability, security and price volatility are all challenges being worked on by the community to remove impediments to adoption.
Crypto-Currencies and tokens are incredibly easy to store and transact once you become comfortable with managing your wallets and public/private keys; However, lost private keys means irrecoverable assets and is a tradeoff people are making as they take custodianship back from trusted third parties and manage their own assets on blockchain.
Today the scalability of the Bitcoin and Ethereum networks has proven to be a performance challenge. The Bitcoin and Ethereum only support double digit transactions per second where large scale financial networks like VISA see 2–4k transactions/sec orders of magnitude faster. As such there is an ongoing quest to improve performance and throughput. Here are a few key project to watch as this space evolves: SegWit, Sharding, State Channels like Raiden, Lightning Networks.
Because blockchains are designed to operate in trustless environments, it costs a surprising amount of resources to maintain consensus. Every Ethereum transaction incorporated into a block and every smart contract executed are validated by every full node on the network. This seems an incredibly high price to pay but I guess it depends on your use case, but it does require you to think carefully about why and how you will leverage blockchain.
Interoperability is also becoming a major consideration, being able to transact across public, private and other blockchains is now becoming a requirement. Projects like Polkadot, 0x, Lighting Network — atomic swaps, cosmos are looking to solve this problem.
Looking at Security, there has been and I anticipate there will be more exploits. Every transaction is a financial transaction thus requires a level of diligence and discipline in the software development lifecycle as well as production operations previously reserved for banking and trading systems. Due to the immutable nature of smart contracts, robust testing is absolutely required. Last month $70M of Ethereum was stolen due to a bug in the parity wallet code during an ICO. Permissions and security are a primary concern for enterprises as demonstrated by the push towards permissioned blockchains now being considered and built by Hyper Ledger, Enterprise Ethereum Alliance
Blockchains can provide trust and transparency if smart contracts include their source code and data on chain is accessible. Although, even with access to the blockchain API and the various blockchain explorers it’s a tedious manual process to dig into transactions or post facto discern when, how and why something went wrong.
Price Volatility and Transaction costs are also still hot topic and area of concern which could be impediments to the broader adoption of blockchain and the token economy. The average cost per transaction on both the Bitcoin and Ethereum network can be prohibitive for small transactions.
Enterprises have to be watching blockchain spread its wings and the tokenization of atomic unit economics for platforms could be massively disruptive for their businesses if they do not adapt. A quick look across industries provides a view of the breadth of interest in blockchain. The financial sector has embraced blockchain and Distributed Ledger Technology to reduce transaction, back-office costs as well as embraced new exchanges and marketplaces. Look at R3, Ripple, Chain, Hyperledger for private blockchains for enterprises. The Insurance industry is also very interested in blockchain which could change their underwriting processes, fraud prevention, drastically reduce their costs or even force them to compete with new products. Global supply chains are looking to blockchains to monitor production, transportation and distribution of resources in real time. The military or airlines 3D printing a part for an aircraft may seek to verify the authenticity of a 3D file against a blockchain. IoT, voting, academic institutions, digital rights management and Healthcare industries all are looking at blockchain technologies and each have unique use cases and applications which will reduce costs and complexity in their business or create new value.
A clear take away from my research is that no single industry is driving the explosion of innovation around blockchain. The opportunity for change, value creation and displacement of major industries and players right now is unprecedented. I’ve only scratched the surface sharing my opinionated cliff notes on these 30 projects with you here.
Please feel free to message me at @shawn_douglass or comment below. I will continue to develop my thesis and share what I’m learning. Thank you for beginning to walk this path with me.
