AMA with Mike Chen, Founder of STP Network

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Clique by STP

11 min readMay 9, 2019

Standard Tokenization Protocol’s STP-Standard is an open-source standard that defines how tokenized assets are generated, issued, sent, and received while complying with all necessary regulations. The protocol allows assets of all kinds to be tokenized in a way that makes them fully compliant across jurisdictions and transferable across any ERC20 platform.

Tokens built on top of the STP-Standard will use the protocol’s on-chain Compliance Validator to verify compliance with relevant regulations (i.e. KYC, AML, Accreditation, etc.) as well as any issuer-specific requirements (i.e. ownership concentration, holding periods, voting). The Validator Committee will serve an advisory function to ensure the Compliance Validator is enforcing the most up-to-date legislation at all times.

Exchange Listing/ IEO

Have you decided which exchange will do your IEO? Is there any specific timeline for IEO listing?

We are actively talking with all the exchanges. We are planning to do an IEO on at least two platforms: a main IEO place plus few light IEO locations like Bitmax and Huobi, which cover different regions to ensure maximum momentum. Late May will be our target timeline for IEO.

Which exchanges have the highest chance?

Huobi, OKex, Upbit, Bitmax

Investment

Regarding various rounds of funding: Can you shed some light on previous rounds, Seed, earlier round and future round prices. Also, on current status of project how advanced is the project and what is your next 100 days goals for project.

We did an equity raise ~$1m a few months ago. FBG and Draper are our major equity holders. For equity holders, they will get some tokens but none of them are liquid for the next 3 years. And for tokens, we did two rounds, we closed $5m at 1 cent for Round 1 two weeks ago and we are doing another $2m at 2 cents, which is halfway through. For our next 100 days, we will focus on two things: 1) listing / liquidity for STP holders, and 2) integrate STP into our business i.e. launch our mobile app

What is the current vesting for private investors and how likely is it to change in the near future?

For Round 1, 50% unlocks initially and the rest will be unlocked over a year. For round 2, 50% will be unlocked faster than Round 1 in initial unlocking period. Currently we are working with exchanges to finalize terms for IEO. Definitely we will balance both the interests of community investors and IEO platforms.

I heard that you guys have sold tokens at the effective price of $0.005 including bonus or discount. Is that true?

This is not true. the lowest price is 0.01 cents. They are definitely scammers. Ask them to show their SAFT.

How much are you planning to raise in total? What is the total hard cap?

We raised $6m so far. Hard cap will be $8m or $9m depending on how much we raise in the IEO.

1c and 2c are 100% difference, any idea why such a big discount for the first group of investors?

To be honest, we didn’t plan the 2 cents round. The first round was the only round planned and we made it community focused. The distribution is wide, so we capped each party at $100k. Average allocation for this round is very small. So, some VC saw this, and request bigger ticket sizes. They were willing to pay double the price, so we closed $1m in 1 cents and sold to most VC at 2 cents. NGC and BlockVC are leading the 2 cents round and committed half each. So the 2 cents round is more like a VC round, $40m network valuation is still cheap, and they can pay more in price for the large ticket size.

What is the discount you offered to Big VCs? Being prominent VC why would they want to buy at 2c?

No discount because they can’t put large amount in the 1 cent round.

Will you change the lockup time and % if the exchange host STP IEO asks?

There is always a balance between community and exchanges interests. Most exchanges only care their own interest for IEO. We will not sacrifice community interest for small exchanges with no good return guarantee.

Project Fundamental / Logic / Tokenmatrix

Why should I choose STP over another project right now? There are plenty of projects raising and trying to IEO now.

I think we are very special. At the protocol level, we may have a similar concept competitor. But we have been working with our core issuance business for a while. And our global footprint will enable us to take a more aggressive approach than them in business and customer acquisition. We are not newly formed team just want to take the ride of IEO and make quick bucks. Compared other IEO team, check our global footprint, we have 25 employees in China Korea and US, Moreover, we have running business in crypto for 2 year +. Our track record also speaks for us.

Who do you see as the biggest competitor and what is your advantage compared to them?

At the protocol level, our competitors may be Polymath, Harbor, however, we already have a strong business which will lead technology adoption. We are a business-driven protocol, which means we are more like Binance. They have users, a business model, and traffic first, then they built Binance chain. So once the Binance chain launched, it has lots of users and transactions from day one. On the other hand, there are so many tech driven public chains, that no one uses them even after the mainnet launches. I strongly believe Business success will lead technology adoption.

If ICO x uses STP for their tokenization, would we expect STP token transaction between STP and ICO x rather than ETH/BTC/USDT?

It’s a good question, a project that uses STP tokenization service can still choose the currency they want to raise their capital in. STP can be part of the contribution method. Moreover, STP will have token economics that include refunding insurance, buying qualifications, etc. around it. Those use cases will consume a lot of STP tokens.

Can STP be used for IEOs on other exchanges?

Yes, you can think of STP itself as a launchpad and we will work with top exchanges like BitMax to ensure post-issuance liquidity.

How soon will STP be ready to offer tokenization services?

We are ready right away, but right now our team is focused on IEO and liquidity. We will start to offer tokenization as a service after our listing.

STP will refer to regulated token offerings, meaning the tokenization of traditional assets to enable certain previously impossible features. Would you please elaborate more?

Yes, tokenized security will be our US team mainly focus. We will launch a compliant token service platform like Coinlist or bitcoin suisse in US. And we want to bring more traditional assets from wall street to token community.

STP Whitepaper says it’s too offering asset management services. Will it be different than UltrAlpha ?

Yes, we will be more passive side and UAT will focus more on the trading side

What are all the use cases that you are targeting on in your initial days?

I will say STP will be a platform token like BNB or HT, but we are a platform token for investment banking not exchanges. In Wall Street, Goldman Sachs has a much higher (almost 10x higher) valuation than Nasdaq. It means something. When the crypto market gets mature, Investment banking will play a very important role in the ecosystem. STP will be deeply integrated with the Block72 platform in many ways and will be used as how BNB is used when we issue a new asset in our network. It will have different token economics to ensure the supply is deflated. We will have more info released on this. Please, check our official medium.

Who are developers in STP?

We have a dev shop in Beijing with 5 full-time developers. The website only listed founders. We have close to 30 employees including devs

Is there staking program in STP? If so, what are the benefits?

Yes, we will have delegation/staking in STP wallets — people can earn rewards by staking and also we will work with BitMax on its bittreasury product. STP will have revenue when we do token issuance, just like Binance launchpad, all the fee will go to the staking pool. Besides that, STP will also has staking methods like DPOS to STP rewards.

How many clients you have in queue?

We have 25+ clients in contract with

Will there be validators nodes? How are they selected if yes?

Yes, validator nodes will be happening after we launch mainnet in Q4. Like other DPOS systems, a validation committee will be elected to ensure our onchain validator works.

What are your projected expenses of STP for the next 2–3 years, what areas would require most of the funds? also Is there any forecast for STP revenue for year 1–5?

Good questions. Just like I said, it’s also a strength on our team. Block72 is making strong cash flow every month and it also has money from equity raised. Currently our 25+ employees are all under Block72 payroll and it will be the same one in the future. The money we raised for STP will only spend on activities that benefit the STP community, like listing, liquidity provision, development, etc. Our runway is +3 years. In this case, we really expect a bear market like last November can continue for a few months. STP won’t have revenue at first — all STP revenue will be given back to the community through our token economic design. Block72 will have revenue, for 2018, Block72 made about $10m USD.

Will STP consider launching its own exchange?

Yes, but two conditions: 1) STP price is good, and 2) we have lots of retail traffic

Do u have token burning in plan?

Yes all use cases in STP will directly lead to STP burn

Why not giving STP tokens to bounty hunters like other projects?

It’s not good, airdropped tokens will be sold at no price floor for bounty hunter. We will pay USDT/ETH for bounties.

How STP is different than CHX and SWARM?

They are very regional teams and only focus on STOs. Our plan is to raise $8m, which is $6m at 1 cent and $2m from IEO. Currently, we raised $5m at 1 cent, so the $1m less in 1cents round will be $2m at 2 cents for the same amount of tokens. IEO is either 1 or 2.

When are you going to launch the mobile app & what are the accomplishments to be done in the roadmap before IEO ?

Around July. IEO and listing is our 100% focus now. It should happen very soon.

What does it mean when you mention STP-Standard token? Is it different than ERC-20?

We will enhance ERC20 standard by adding an extra layer for compliance. Compliance is #1 key for token issuance now.

Partnership

How did STP meet George of Bitmax ? How’s he helping STP ?

I’ve known George since before he founded Bitmax. He was my old friend in New York. Bitmax is a long term strategic partner to STP. And block72 has been helping Bitmax in user acquisition and asset sourcing for a year.

How are STP UAT and Bitmax connected?

We are partners and we all have one goal: to bring transparency to the lifecycle of token issuance. STP will be the gate of finding good assets, Bitmax will provide liquidity infrastructure of the assets, and UAT will provide asset management. It will be end-to-end lifecycle. Block72 STP BITMAX UAT covers a whole life cycle of a digital assets from issuance to 2nd market, end to end

Why are you not doing IEO on bitmax Even though you are closely associated with bitmax?

We will do a light IEO on bitmax. Our market cap is a little bigger than Bitmax typically does. Bitmax definitely will be one of the premier listing exchanges as well.

How are you guys partnered with UAT? You both offer asset management services together or independently?

Yes, we are focusing more on asset sourcing and insurance. UAT is focusing more on post insurance management.

Legal / Compliance

According to your portfolio, some of you guys are from the USA. Don’t you get any fear of operating from New York despite STP is registered in Singapore? We all know New York is home of SEC.

We are compliant in the US and in the US we only focus on compliant token issuance. We are also arming ourselves with a broker-dealer license. And our Asian team will focus more on utility token issuance.

We don’t see any KYC related services offered in Tokenization. Are there any plans for KYC related services?

Yes, for KYC STP will launch a KYC portal soon for all our private investors. This KYC portal also will be used in the future issuance on STP

Have you identified any region with favorable regulatory terms for tokenization for the mass market?

Yes, Asia is definitely a blue sky now, and Singapore is a premium jurisdiction

Market Overview

But aren’t ICOs already dead and STOs are only a distant dream?

There are different methods of ICO. I think just private placement like what happened in 2018 is dead for ICO. RIght now there is IEO. Maybe in 6 months after, there will be Initial wallet offering. Our Asian team will make sure STP will catch the latest trend of any formats of token insurance. For STO, yeah, the liquidity infrastructure is not there yet, but tokenized security definitely will happen in a few years.

ICOs had at least some of true believers of the projects, and they tend to hold the token and supported the projects believing long-term vision of the projects, whereas IEOs make 100% flippers, and I guess 100% IEOs happened to justify this, so not sure how IEOs would benefit the ecosystem except for just teams (and exchanges) getting funds and not genuine communities supporting the projects, what’s your take on the IEOs and their influence to the crypto ecosystem?

IEO is more than a fundraising method, it’s more like a token distribution method plus a good PR event. its a two-sided sword depending on a project use it. If you use well, you will get tremendous attention and a big number of tokens holders — then it requires a project to have a strong use case to convert the flipper community to the users. Most IEO projects now just don’t have instant utility, so of course flippers will just sell tokens and move to the next one. STP is different, we will have business utility on day one.

Most of the core teams of STP Network come from Blockchain Venture Capital industry. Why do you enter the development blockchain project area? What are the challenges in this emerging market?

We have been in space for a while. We are very good B2B, as you know we are in VC institutional side for a while. Crypto is still a 90% retail market, B2C is what we want to break into. With STP, a token can incentivize a community to engage our asset issuance process, all parties will be benefiting from it.

Community Event

Will you have a community incentive program to have a personal meet and greet, where STP will host and arrange everything?

we currently doing a small social media growth hacking bounty in USDT. We have 5% community reward tokens reserved. We will plan to distribute that to the community over the next year.

What kind of community events do you have in mind?

Some meetups and we will bring some assets with us and do it together. For ppl who attend our meetup, they may get the priority to invest assets issued on STP at a very discounted price.

How do you engage Chinese and Korean community?

I am influential in China and my partner Sinhae is the same in Korea. We will kick off our marketing activities in China and Korean very soon.