Blockchain Brad interview with APEX Network CEO Jimmy Hu Transcript
Dear APEX Community,
Below we have provided a transcript of the Blockchain Brad interview with APEX Network CEO, Jimmy Hu.
Overview
1. Introduction
2. About APEX Technologies
3. Multi-layered Approach
4. Relation to NEO and Ethereum
5. Relation to Ontology
6. About Smart Contracts
7. About consensus mechanisms of APEX
8. Tech updates and APEX wallet
9. Role of community
10. Valuation
11. APEX Technologies Clientele
12. What value do partnerships and clients bring to APEX Network?
13. APEX Network’s Value Proposition
14. Real-world use case and example of value proposition
15. Reverse ICOs? Enterprise customers issuing assets on top of APEX Network
16. Implications of regulations on ICOs by enterprise customers
17. Do Enterprise Customers need a crypto community?
18. Does APEX Network need a strong community for long term viability?
19. Testnet
20. More on community building
21. On token valuation & metrics, liquidity and trading
22. APEX Node Ecosystem
23. Roadmap progress
24. Exchanges
25. Fraud and Twitter impersonators
26. State of NEO
27. ICO metrics
28. NEO community and their growth
29. Why will APEX flourish?
30. Closure
- Introduction
Brad
Hey guys it’s blockchain Brad and today I’m honored to speak with none other than Jimmy Hu. He is the CEO and founder of APEX Network, a Chinese blockchain initiative and start-up. It stands for essentially being a B2B and B2C platform. Now, Jimmy welcome to the channel, it’s great to see you once again.
Jimmy
Hey Brad, thanks for having me and hi everybody.
2. About APEX Technologies
Brad
It’s great that you are here to sort of explain the very nature of APEX Network and most importantly update us on all the different things that have been happening since we last spoke many months ago. Now, Jimmy you stand for as the CEO essentially what I mentioned before a B2C platform allowing for applications onboard on your system. Fundamentally you are about enterprise as the buzzword for your entire operation. Let’s go there let’s explore this right from the beginning, just get in a nutshell, can you tell us the connection between what you’re doing and enterprises specifically?
Jimmy
Yeah, you know that’s a good point Brad because enterprise indeed is a very big key word in all of this, because the need for this such blockchain arose from the enterprise. So the company behind APEX Network, i.e. Apex Technologies has been around for six years with over 350 now close to 400 mid to large sized enterprise companies in the B2C space. So we have everything from hotels, airlines, financial services companies, retail companies, e-commerce, etc. APEX Technologies originally focused on big data and AI solutions for these types of companies, in these verticals, and over time we saw that not all of these problems can be solved by you know Big Data, AI or automation based technology like alone so insights and data are not enough to solve a lot of the challenges that they have. And by challenges we typically focus on revenue generating challenges like marketing, CRM, customer data, etc.
3. Multi-layered Approach
Brad
Right exactly, and we want to go deep into these one by one Jimmy. Can you help us out in understanding the three layers for those who are literally introduced to APEX Network for the first time, that’s who I’m thinking of. now you have three layers being your core, your service and your core layer. Can you talk us through that exactly and why your multi-layered approach matters
Jimmy
Right right, so the multi-layer matters because that’s how a blockchain application platform should be built in a robust way for the enterprise. So if you didn’t have these layers in place, thus if you didn’t have the core layer which is the blockchain layer where all of the data sits and where the consensus is as well as where there are virtual machines for the smart contract system and then if you didn’t have the service layer that means that enterprises would not be able to easily build applications on top. So what we mean by the service layer is; it’s an SDK and API layer that enable various different enterprise suitable languages in environments such as Java or Java Virtual Machine environments you know Python, C++, C sharp, etc. So we need to have a complete set of services or SDKs and API’s in order for this to be enterprise ready. A lot of platforms do not have this or they use one particular language that enterprise companies are not really comfortable with. I could even say that for solidity 95 percent of enterprise companies are not willing to use solidity as a language for robust enterprise application development.
Brad
Can you say why is that the case mate, why would they not want to use Solidity?
Jimmy
Because almost, close to almost all of the newer enterprise applications, they’re all based off of a framework called JVM which is Java Virtual Machine. So Java related technologies that have the performance, the history and the libraries as well as the surrounding infrastructure and enterprise ecosystem databases, you know persistence and like other things related to distributed computing etc.
4. Relation to NEO and Ethereum
Brad
Now I appreciate your comment on Ethereum and your reference obviously there with the solidity. I want to go across now for discussing NEO. Obviously they had their own unique virtual machine and given the context you just provided, can we talk about that very specifically in relation to A. enterprise and B. your own position given that you’re moving in the direction of becoming your own blockchain architecture and standing alone as your own blockchain?
Jimmy
Yeah so NEO is actually more Enterprise suitable I would say than Ethereum in some cases in the service layer but as for certain infrastructure level stuff that they provide including in connectivity to outside data like you know things like Oracles and some other stuff like that they’re not as robust as Ethereum but not exactly because of certain technology limitations as much as the ecosystem size. So because of the Ethereum ecosystem and overall global community and developer community size, they have a lot more robust tools out there and modules to build off of.
5. Relation to Ontology
Brad
Right, now when I talk to you specifically about ontology because when we last spoke more of the focus was actually geared towards ontology, not so much near in the context of architectural Alliance. Because what you’re saying is that you are a multi-tiered system, so is ontology. Let’s talk us through that connection if in all it exists.
Jimmy
Right so Ontology I think, focuses on solving some different problems they have. A large focus of ontology is identity like on the blockchain and therefore applications associated with that, and that require more clear identification and identification protocols etc. But they have a lot more stuff. They have some features and technical differentiators that help them with data related like applications and overall I think Ontology is already a much more robust technology framework than NEO, that’s for sure. I’m very much a supporter of ontology and what they’re trying to do and the technology etc and I think it’s great.
6. About Smart Contracts
Brad
Sorry interrupted you, but we’ll talk about those you know topics and when we discuss some of the community concerns later because I still want to go deeper into your relationship with NEO. Now if we could please talk about the smart contracts themselves Jimmy as based on a statement that APEX Network does make in that they are somehow different to other smart contracts by design, essentially being a smart contract system. Can you talk us through that and what you mean by that?
Jimmy
Well public blockchains with smart contracts, they all have virtual machines by design. It’s very um, it’s pretty much implied but the difference with our smart contracts system is, it allows a part of the smart contract logic to sit off chain. So for example for like a particular enterprise dApp, if they want to make changes and redeploy the smart contract, they do not have to involve all the node infrastructure of the blockchain. We have what we call like an enclave that is off chain, that is secure and that is encrypted already, that requires the enterprise’s cryptographic signature in order to update certain parts of the smart contract. The good thing about that is it’s more rnterprise suitable in that it’s very nimble and agile in the mode of development as well as it’s good for performance of a smart contract and dApps. So in a nutshell, it does not require all of the nodes on the network or in a delegated proof of stake it does not require all of the super nodes.
7. About consensus mechanisms of APEX
Brad
Right now that makes a lot of sense. Now can we talk about that in the context of your two consensus mechanisms? You don’t just have one built in, you had the DPOS for the mainchain and sidechain so talk us through how they they’re bifurcated by design that why they both matter to your overall architecture.
Jimmy
Yeah, so for the main network delegated proof of stake is a sensible choice because of the performance as well as… well, the performance is also by part on scalability but also kind of the ecosystem that we’re trying to establish, is that the supernodes or what they were called the delegates and some kind of times it’s called witnesses on the network would be actually run by ecosystem contributors. Ecosystem contributors or major users or the partners of the ecosystem but not by regular node holders, those would be more involved on a voter node basis. So we like the tiering system that it has. For the sidechains, which are kind of pegged to the main particular chain or what we call the main network, but in terms of physical infrastructure, it’s pegged but not completely like on the same thing. Those we use and a lot of people ask me why you used DPOS for the main network and POS for sidechains. So we first have to think about what the sidechains are you use for. The side chains are mostly used for enterprise level applications that they want to be localized in workflow or work streams that isn’t really affected by the performance of the main network. So on the main work as we can imagine as the as the network grows, there’s the there will be a lot of users a lot of holders of the CPX token, they’ll be doing all types of transactions but the enterprise’s they may not want their workload to be anything as close or associated with the rest of the load. So hence they have enterprise sidechains and this allows them to issue their own assets or tokens on partly their own control infrastructure. To elaborate on that, so from those points why it’s proof of stake is; if that particular side chain is mostly used for the workload and work streams of these enterprise applications, to kind of manage this infrastructure it should not be as complicated as delegated proof of stake because DPOS you know it has its benefits. But once you have many of the same types of networks, it’s gonna become very burdensome. So for us there’s only one main network that’s delegated proof of stake, but for sidechains we may have as many as couple hundred or a couple thousand probably one for every enterprise or even a couple for like every enterprise for different business units or product lines say.
So if they were to create multiple sidechains, it doesn’t make sense for the nodes of the sidechains to go through that DPOS voting system again, you know nodes selection. It just takes too long and it’s too complex. With the skill, it would be proof of steak you know.
8. Tech updates and APEX wallet
Brad
Right and also remove some of those challenges of bottlenecks and also you’re reverting back to a more probabilistic and secured network that’s being proven as we’ve talked about and many others because people are speakers in the space have also brought to the fore very evidence of them the original Nakamoto protocol offerings and you’ve all obviously capitalized on that and using that as a basis. Now can we talk about some of the tech updates that you do have? I wanted to be specific about those. What’s the key assets that you bring to the table at the moment Jimmy with regard to changes since we spoke last?
Jimmy
So uhm, there’s actually quite a lot. So our github is open completely open source, now we don’t update it like every day like some other projects, we only make major updates but first of all, the wallet has been out for a month already. So the Android and iOS version of the APEX wallet has been out already and it supports all NEP-5 assets of today but as of the end of the month and beginning of September it’s gonna support ERC-20 as well.
Brad
Right, that’s significant given that the number of ERC-20 tokens currently available on that network.
Jimmy
Definitely and for us the wallet is more, some people don’t actually understand why we have the apex wallet and what the significance of it is but over time that will be clearer and clearer because they’ll see more and more it’s a way to grow the community and the ecosystem using application level value and that serves as kind of an entry point for the entire blockchain and the project
Brad
Jimmy can we talk about that a little bit more; how does having your own wallet function as a core point of value for your own ecosystem can you really just so explicate what you mean by that.
Jimmy:
So it serves as an entry point on multiple levels. So the first level is on the crypto community level and we’re not even talking about the application use case levels of Apex network the blockchain yet..but we’re just talking about how to draw more community in and create value for the greater crypto community which is quite a large number in the first place.
9. Role of community
Brad:
Jimmy I want to talk about that, Sorry to interrupt, because you mentioned the imperative of having a community. Why is that so unique to blockchain as a decentralized mechanism and a decentralized system, why is it that suddenly you know we’re turning business on its head and needing so much of a community driven focus?
Jimmy:
So some may disagree with me on this particular point but most blockchain infrastructure platform dApps out there, it’s very very limited or has no real world value that means outside of the crypto space at this point in time and that’s normal because this is a very early space right now.
So if you look at the entire space, even if you look at Coinmarketcap right now it’s going to be very different from now to two years later or even five years later. So mainstream adoption has not really started yet for the most part but some projects have been experimenting with that already. So before that happens, how you build the initial ecosystem of the asset holders and people that take part in the assets, it’s really the crypto community that’s the entry point for almost every single project.
Brad:
The reason I ask you this is because you’ve had experience with Chinapex and many other businesses before, is this like no other sort of design that you’ve seen in the past whereby there is so much of, such a strong role for community to play in the overall success of the first iterations of and movement in a project like yours. To be clearer what I’m saying is, from your experience is the community fundamental to the success of the beginnings of Apex?
Jimmy:
Yes and it’s because of a very simple reason. The project needs to continuously build awareness.. now long term it does not actually really effect… So the community is kind of a foundation for the ongoing of the project but long-term success, when you have a big and growing community, it does not ensure long term success. Why would we say that real world value and real world adoption of the technology itself is the only thing that ensures long-term success and by long-term we probably mean you know, even two three years down the line. Like in terms of a technology adoption in real enterprise ecosystem point of view we’re much farther along from where we are right now. So that’s probably the most important thing because of a couple reasons. One is if assuming that the token economics and the token dynamics of that particular network is designed properly, that is what gives it a kind of long-term sustainable value like instead of just the capital market value, like you see what i mean. So to put it some other way and give you an example, on the Apex Network for an enterprise to create its own side chain, create its own like assets the dApps etc it needs to stake a certain amount of CPX. So as the adopters increase in number as well as the amplitude in which they use the network, then by default there’s less circulating, real circulating volume on the secondary market naturally causing token value to increase.
10. Valuation
Brad:
Models we’ve seen in economics like gold and I don’t quite like to use that a comparison because we’ve seen other blockchains, particularly one in fact use that term of reference but the point is you’re talking about scarcity and you’re building incrementally that scarcity factor into design.
Jimmy:
Right, scarcity based on real utility, I think that’s what really drives long term. But also something that’s related to that particular point is the way that even capital markets will value particular token assets and projects will become much more rational over time. So after whatever happens in this market by the end of the year, and people are predicting an even worse slump than right now, It’s going to have localised peaks as well as localised slumps but in terms of the absolute worst time, I don’t think it has come yet. The interesting thing about these times, every time the market comes back, supposedly there’s something different about the market. It’s becoming more and more rational over time.
Brad:
When you say rational are you also implying stability, in terms of a stable market with more steady growth? I want to ask you in the context of tech because we’ve seen a hot driven market, we saw it very loud and clear in 2017, but we are now in a transition period Jimmy at the moment. Are you arguing that not only is it fundamental to have metrics be sound and be long term in terms of their design but also having built in that very good technology to underpin it.
Jimmy:
I think technology is the number one thing in the long run but having said that I think it’s two things. For the projects fundamentals itself, it’s the technology and the ecosystem to adopt that technology. So if you have very amazing technology that can deliver some
performance on the blockchain but the real use case users are very slow to adopt it for a variety of reasons, then it’s not going to have value in the long run.
11. APEX Technologies Clientele
Brad
So essentially we are talking about decentralized Google potential. Let’s move back to Apex so that we don’t digress too long in regards to more general comments. Now I want to talk to you a bit more about your companies and the reason is that you are very strong in that domain and that’s again trying to be objective in this comment but you have over 300 B2C brands advertised on your website. It’s always been something of an asset in your discussions. Let’s talk about how valuable they are and how real they are in the context of utility.
Jimmy
Alright so in terms of these brands..to give some background, we typically work with three departments in these companies. One is the marketing department obviously, the second is the information department, the CIO’s office, the third is the technology and data department. Sometimes it’s three of these in conjunction. Seeing how these companies are picking up technology these days, especially their changing attitudes on emerging technologies, these three departments are pretty fundamental in discovering new technologies that add value for the companies. So in terms of blockchain these companies have very different attitudes. We typically see three different types of attitudes in large categories. By attitude we also mean what kind of state the company is in as well as the needs that it actually has in terms of say blockchain. One type of attitude that’s very common is “Ok i’ve heard of blockchain, its very interesting but I’m not interested in how it actually can produce value”. In some cases they want to stay away from it because it’s too close to crypto and they may be a fortune 500 or Fortune 1000 brand. Then there’s the second type, they understand the value blockchain can bring to the table but they don’t actually know immediately how they can actually transform this into value for themselves. Then there’s the third type that sees the value in this and has been thinking about blockchain related initiatives for some time now. So in terms of the percentage breakdown in the customer base, the first category don’t care or want to stay away..50%, that’s quite a large proportion. Interested but not quite sure how to make a use case of it, that’s around 30–35%. The remainder 15–20% have pretty interesting use cases in mind already as well are reaching the end stages of understanding how their going to use the Apex blockchain.
12. What value do partnerships and clients bring to APEX Network?
Brad
Jimmy just for time I want to talk about that last point you made. That group of companies..because their the ones that onboarded and are connected with you, as the CEO you’ve made sure of a reciprocal value there. There are 300 of these companies in that category, that third category you mentioned. They obviously see value in blockchain, talk us through the value though that those reciprocal relationships have, those partnerships, what are they doing to really add value to Apex as a platform and architecture.
Jimmy
Let me give some examples but I can not disclose some of the exact name already..
Brad
Give it your best shot, we won’t mind if you do
Jimmy
Right so let me just give you a little background on how we work with these kind of companies in their early exploration of real blockchain applications in relation to Apex. So these companies, they see real value in blockchain, either in consumer data applications or loyalty points like CRM, decentralised data storage etc for the consumer data. Most of these users, they typically start at one perticular simple use case that’s kind of the pain point for them specifically. You see the Apex blockchain solves a series of problems in the B2C lifecycle but in order to really get the value fast, you can’t really tackle all of them at once. So most of these companies focus on one and let me give you some examples of the earliest users of Apex network. What we’ve seen is the earliest use case is just basically onboarding their loyalty program on to the blockchain and just getting rid of their legacy loyalty program and then having associated applications like consumer data, CRM but surrounding those loyalty programs. That’s a relatively simple use case but for these companies its already quite big already because its a pain point they’ve had for over 2 to 3 years. So one example is 2 up and coming electric car companies, they want to merge loyalty points with the IOT experience within their cars. We’re talking about Chinese car brands with over 2 to 3 billion dollars in funding.
Brad
We’re talking about top tier companies to be frank..
Jimmy
Right, to be frank. Then there’s also retail companies as well airline companies that’s within this first wave.
Brad
Jimmy those companies you are referring but can’t name, are they all top tier, are you really connected with all these top tier companies right now?
Jimmy
Yes, they are all top tier, they are all existing customers, they are paying us to buy very expensive Big data and AI systems. Many of these customers have been our customers for 2,3 years already. Now i can’t name them now but that may change. Right before testnet launch or right after testnet launch.
Brad
We will talk more about that, now i want to talk to you about the number because you referenced that there’s obviously value in these companies, you have 300 onboarded now. What’s the projection like as we move into 2019.
Jimmy
The company has close to 400 customers and it is going to shoot beyond that very soon but in terms of the number that actually has a specific use case in mind and that wants to do blockchain technology, it’s the 15–20% within that 400 customer client base.
Brad
You’re still saying for the future you are focused on utility, you’re focused on the companies that can really transform into some sort of new world of business, and that is decentralised business and all the technology that comes with it. Is that growing though.. despite the reference of the number of 20 right now, what we want to know is what is the update in terms of projections, the interest coming in from the international sector as well.
Jimmy
The number of comes down to around 35 but for the first wave of pilot programs, we can only service 10–20 because these first case studies, we want to make them exceptional case studies that we can bring up over and over again, both to show how Apex really differentiates from the entire blockchain technology space as well as the exact use case and kind of the roadmap that these companies took to realize value.
So in order to do that, it requires that my company provide resources to help build the protocol and decentralized application layer or at least provide a level of support for these early upstage companies because the fact that thinking I just give them the service layer of my own blockchain and have them just create their own applications — it’s pretty far-fetched — because you don’t really see that out there. To help them adopt, at least the first wave of adoption, you need service level support.
13. APEX Network’s Value Proposition
Brad
Sorry to interrupt but that’s where that multi-tiered approach becomes important and relevant but I want to talk to you also about the verticals that you’ve referenced as well in your website. I also wanted to discuss this in the light of NEO. When NEO first emerged — this is a reference point — they targeted specific verticals meaning they address a multitude of different industries as they wanted to develop their very first dApps. Now in your context clearly your agenda is to address some multitude of verticals also. Is that also why you’ve done this this way is to start off essentially building out and covering all your bases?
Jimmy
Well I think in terms of the verticals that we cover, it’s much more limited than you know what NEO or Ontology, what they aim or claim to cover. We position ourselves as a complete enterprise solution for the blockchain for the entire b2c lifecycle parts, which is consumer data, marketing, and CRM. So in order to be that kind of solution you cannot be offering the solution for ten different verticals to start with because it’s very hard to cater to all the needs of these different verticals. So we focus on the verticals that are similar in terms of the nature of the marketing, CRM, and b2c interactions. So, these are mainly just four; retail, travel, financial services, and automotive — that’s what we need to focus on in the beginning.
Brad
Right — I’ve also gotten a few others. You’ve got consumer internet I think and also luxury and lifestyle. So once again to reiterate what you’re saying is you have a finite number less than you know your typical blockchain startup that we’ve seen in the past, particularly in generation 1 iterations, and that’s because you’re it solely and wholly enterprise focused so thank you for making that clear. Now can we talk about the use cases you have specific points reference there in terms of your use case value. Specifically we’re talking about CRM, loyalty as you mentioned, AI, marketing — we’re talking about some others as well customer experience being another — talk us through the use case in terms of clear empirical evidence of how you’re going to make this possible?
Jimmy
Yea so as you see, those different use cases that you mentioned — you know we got marketing, CRM, consumer data, customer experience, AI etc. Now those, from our point of view, they are different use cases on the same lifecycle on the same customer lifecycle that these b2c like enterprises have. So effectively they can actually be combined into a customer lifecycle on the blockchain solution. Not just kind of individual pieces. Though I think that’s the ultimate goal, but as I said our users our customers, they pretty much all start out with one particular use case. So for example the loyalty points for CRM was the most common one in the beginning because it’s you know conceptually they can connect the dots very easily — they see loyalty points as an asset off chain and an asset on chain that provides a number of different benefits but the interesting thing that we’re seeing is okay so how did the other use cases fit into the picture is we see these companies like for example some automotive and retail companies are thinking of expanding the use case on the loyalty points already. For example their timing that with you know the consumer data exchange and the data consent protocols that they’re building to fulfill GDPR, the data law for the European Union, as well as they’re using it to unify the customer experience. Back then they needed to track the data of the customer across different retail stores online and to piece these different profiles together now they have one unified profile that’s on the blockchain. Also the consumers data is encrypted and stored in a decentralized manner. So I think definitely what we see as a plausible way to approach this is they start with one use case but once they see that actually take value all the others will come into shape because they’re part of the same lifecycle.
14. Real-world use case and example of value proposition
Brad
Right so you know just in a nutshell obviously for time constraints how are you going in terms of the real applications real-world use case that you can actually changeably see? Just give us a bit of a rope, you know a remark on the update of usability.
Jimmy
So one example is let me just give you a most recent example, one when I met the chief information officer a couple days ago of a up-and-coming electric car company. They’ve been in research and development for three years already and they have a lot of competition. All of the competitors have billions of dollars in funding today so they’re trying to differentiate in customer experience. They’re exploring applications of blockchain etc. They really want to do something with unified customer profile.
Brad
Sorry I just wanted to interrupt for the audience for a moment and I do apologize but is this company you’re talking about already an existing company or are they starting from scratch as a decentralized -
Jimmy
They’re already an existing company with close to 10,000 people and they’ve been our customer for a year for other products.
15. Reverse ICO’s ? Enterprise customers issuing assets on top of APEX Network
Brad
Okay so in that sense — sorry because I interrupted — could you tell us a bit more about that, you know elaborate on that kind of almost reverse ICO stuff for lack of a better term? How that’s going, those discussions with that CEO?
Jimmy
So there wouldn’t be a reverse ICO because they wouldn’t be doing ICO — so for them it’s just issuing a part of or bringing a part of what used to be offline like assets onto the blockchain.
Brad
So can you talk to us a bit more about why they wouldn’t do an ICO — what do you mean — so ICO obviously meaning a fundraising mechanism, yeah, are you saying they don’t need to?
Jimmy
ICO’s are typically for purely decentralized application projects of blockchain infrastructure projects. So these companies often they are the public companies that are profitable for many years already — they don’t lack capital — so if they had any internal technology initiative they would just fund it as well as a ICO wouldn’t really be a good idea for these companies because it it raises eyebrows and public scrutiny from
their very traditional equity space investors as well as investors on the public market etc.
16. Implications of regulations on ICOs by enterprise customers
Brad
So out of respect for me are ICOs in your mind phasing out obviously there’s already been a fundamental pressure happening from the Chinese government as you know where they’ve been outlawed entirely from a legal standpoint but for the rest of the
world they’re still a mechanism for change are you saying that we’re going to progress beyond this perhaps in the frame of enterprise whereby many of these existing companies won’t utilize and ICO in the future?
Jimmy
So in this consideration there’s a few different types of categories that are completely different even for public companies. So let me give you some examples. So say a public company that wants to bring blockchain protocol into their existing applications to enhance existing customer experience and for certain data privacy etc, they wouldn’t really need an ICO because they’re only bringing that technology into their existing customer lifecycle or their existing application ecosystem in a way. But for a public company, say for example if a public company is doing like payments now, they want to do a blockchain, a public infrastructure blockchain that’s focused on payments, and they need the capital as well as the community in order to build, scale, and as well as grow the market capitalization etc then they would need an ICO — and that would be a reverse ICO.
17. Do Enterprise Customers need a crypto community?
Brad:
I want to talk about it in terms of community because you mentioned that you know in landscape of blockchain particularly that the community’s imperative — are you suggesting that those that already have a vast user base, they already have their own agenda in a very centralized framework, are you saying that they could essentially diffuse the technology and not require the kind of community, you know, the kind of thing that is required we often see right now to build out a new model?
Jimmy
So for the companies that’s that’s gonna build on the Apex blockchain, they need no crypto community at all because their community is their existing customer base or that entire customer ecosystem or potential customer ecosystem, that the brand of the company has itself, and they’re using blockchain to really just fulfill the purpose of the business need.
18. Does APEX Network need a strong community for long term viability?
Brad
I see — I think that’s a good statement, I want to ask you that in the light of you as their CEO. Do you in fact need a community given that you also come from you know your experience and CEO as Chinapex is an existing company itself does, does Apex require a strong and thriving community to exist?
Jimmy
Yes because Apex blockchain is a very different thing from what I just described from say for car companies and travel companies, merely just adopting particular blockchain technologies and putting that into their existing business processes, but Apex blockchain is a blockchain project infrastructure project like on itself, so it’s not the business that will use the blockchain to get value for the business. It’s the provider of the blockchain technology and it happens to be a public blockchain in which community is at least fundamental at this stage in the market but in the future as the market matures you know the retail crypto community may not even be necessary anymore for a lot of projects and I think we’re seeing that already.
Brad
So obviously Jimmy we’ve been talking about community you’ve made it clear that it’s imperative to the Apex ecosystem now you’re building out your community globally in terms of offices around the world talk us through that and talk us through the processes and the initiatives that you’ve literally built-in that’s the CEO to build this community really properly and in a strong way.
Jimmy
So for the offices worldwide those are mainly for the enterprise ecosystem growth as well as development. In terms of community building, we have a part of that in-house, and a part of that run by community management partners. Especially for geographics that we don’t have a presence in such as South Korea.
Brad
So obviously Jimmy community is a big deal to Apex and you have referenced many many times, but I want to talk about that in the context of you building out offices around the world and also in the context of what is your plan for community? How are you gonna build it out?
Jimmy
So offices across the world we have the headquarters in Shanghai, but we got branch offices in Beijing, Hong Kong, in Silicon Valley, as well as in ZenJing?, a smaller city in China. But in terms of community building, it’s not necessarily what these offices are for. These offices are for business development as well as building up the enterprise ecosystem that part of them would eventually be on the Apex chain. But for community, it depends on the geography. Some we run in-house, some we work with third-party partners. Especially in places where we don’t have a presence, so for example in South Korea we work with True Blocks — it’s like a community management group.
Brad
Are they of high standing? Do they have a good reputation?
Jimmy
Well yes so they work with a variety of projects with good reputation as well as they’re pretty selective in the project itself — as well as they do they’re starting to help with some other stuff like facilitating local partnerships. I just had a meeting with some Bank in Korea that was interested in what APEX had to offer. I think that was facilitated by them as well.
Brad
Right let’s talk about that, that’s quite interesting. So you’re outsourcing some of your own resources and allowing them to forge new connections for APEX or on behalf of APEX. What other connections have they made as one example and obviously you have many different PR related initiatives built into the different regions that you become ,you know, a force.
Jimmy
Yeah right, so we have different types of partners as well. So we did recently start to work with marketing and PR firms as partners too. So we gotten to a point where we now we feel comfortable to really bring APEX its exposure to a more larger audience. Well that was kind of triggered by the first release of the APEX wallet and soon-to-be second release with ERC-20 support. It will be a real in-between for node staking rewards / claims but that will be before the ERC-20 support.
Brad
Sure, and we’re gonna talk about all those steps definitely, one by one.
Jimmy
Right, right, yeah and especially because we’re close to testnet now, so we’re closer and closer day by day.
19. Testnet
Brad
Yes, and that’s exciting because that’s is that q1 2019 is that right?
Jimmy
Eh, no, testnet is Q4 and we are guessing it’s probably at most mid Q4. It’s probably gonna arrive earlier than that but we do want to make sure that we have everything in place and, you know, the security testing etcetera. And the scalability performance testing, to see if nothing is wrong there.
20. More on community building and marketing
Brad
Right, I want to talk about engagement though, start back into the community discussion for one more point. What are you doing right now to make sure that you’re building out your community, your particularly your social… your online social networks, how are you engaging all the different parties that continue to allow this to become more robust?
Jimmy
Yeah, so building up the community is a process and it has different stages to it and in the beginning it tends to be more of an organic approach. So, more of an organic approach is, people that hear about the project or notice the project because they’re a part of certain surrounding communities, say like the NEO ecosystem etcetera or certain communities that certain investors bring in etcetera, so that’s kind of the initial steep make up of…
Brad
…the word of mouth, the word by ? but obviously as alluding to it doesn’t last forever.
Jimmy
Right, as time goes on you do need that more explosive growth beyond the first horizon and we’ve started that stage just recentl.
Brad
Okay, can you talk us through the process and what you’re actually doing?
Jimmy
Yeah, so it requires a lot of pieces to fit into place and in this environment, especially something for new community, to actually see that’s tangible. So what we’re talking about is both on the application chronic side as well as on the blockchain side. Because what we don’t want is for new people to discover a project and be like: “oh okay, this is roughly what it is… sounds all open on paper etcetera”. We’re kind of past that stage already, but the first way the people why they were interested is — there were probably early stage investors, they probably participated in ICO etcetera. But, it’s different for the next wave.
Brad
Sure, but if we can just talk about that and look at what you’re actually doing — have you got people you know on the ground as writers for example at Medium, are there people specifically addressing the needs of the defense ends of the community on Twitter and Telegram? Like how are you actually really doing the groundwork on behalf of APEX and with your team you’ve build to ensure that the community are informed and it can grow?
Jimmy
Right, right, so, make sure the community is informed and make sure it’s gonna grow is I think two different things. So one is, you know, in lack of a better term; retention, and the other is growth. So in terms of keeping up-to-date with the community I think that’s, we don’t have to talk about that much… there’s a set of things that we do but I think let’s focus on the growth part. For the growth we’ve we actually onboarded a variety of different types of partners just recently. So, you can think about community growth as kind of a funnel.
The first part is like the branding of the project, so that’s the PR exposure stuff on crypto media, as well as, mainstream media like, you know, Forbes, Bloomberg, etcetera. But for those we will see a lot of that very soon because the PR firm was working on a lot of content and we also have organic content partners but obviously we have to have good content and good progress, as well as, you know, all kinds of different news regarding the ecosystem like enterprise partnerships etcetera, to actually provide. Or else if if there’s no real content then it’s very hard to actually market that. So that’s the first stage.
The second stage we can see as performance marketing. So how do you turn that, like, awareness into kind of real KPI? So real KPI starts with ,say, tangible numbers such as, you know, growth of Reddit and Telegram etcetera but that’s all very surface level. Ultimately what we want to see is token metrics in CPX. So one positive trend is, say, as time goes on you it’s natural for the project to see… for APEX to see… of the different node tiers… the higher tier nodes are growing and growing by the week, so that’s the ultimate KPI. And why that is the ultimate KPI, is it ultimately plays down to the token dynamics and economics that I previously mentioned.
See, the real economics takes place when there’s enterprise adoption. But before that it’s about the node ecosystem — it’s about how many people are deeply involved in the community.
21. On token valuation & metrics, liquidity and trading
Brad
Right, and Jimmy I want to get into that discussion very deeply in a moment but I want to allude — I want to bring to the fore what you just said about the metrics, the imperative of that itself, and I want to do some token talking with you directly. Now, there’s a lot of references in the Telegram and the Twitter about the changes in the actual value as stated in terms of even USD if we want to go there. In terms of change, so without going to detail too much in terms of having too much of a financial discussion about values, I want to talk about, you know, the key concerns you’ve read about and heard about with regard to the change that’s happened since the first, you know, release on exchange of of the CPX.
Jimmy
Yeah, so the value of the token at this point in time — it’s basically three different factors, three different major factors. One is kind of the private sale investors, ehm, started unlocking and basically, in lack of better terms, started dumping the coins around this time as kind of the bull market ended, and kind of things started to go downhill. The kind of the sentiment change, as well as the volume changed significantly. So say, for example, at the largest volume times he saw CPX was trading at 10M US dollars per day in terms of trading volume and these days it’s closer to a 100k.
Brad
So in that we need to interrupt and ask you as a CEO though Jimmy are you partly responsible for that pump-and-dump that did happen because of the metrics that were designed from the outset? Let’s really go there and talk about the probably inherent problems with the dump and the effects it has on companies like APEX.
Jimmy
Yeah, so from the short-term I definitely think that the dump really affected, like, the price and combined with all the other factors… and there has been some fud regarding the exchanges that token itself is on. So the factors combined all together, kind of we have the token value of today but actually in another sense what really went on was a kind of a cleansing of the token holder process. So throughout the process there was actually kind of an accumulation process in which what we called the tier 1, eh, tier genesis and supernode on status nodes, ehm, what would qualify for those those node requirements that actually went up.
So the short-term holders — most of them are out by now and the long-term holders — a lot of them are in. So we see this happen…
Brad
Sure Jimmy, but i did want to ask you once again, you are the CEO… would you have changed your metric? Would you have changed the lock-up periods if you knew what you know now? Then in terms of trying to allay some of the dump that did happen?
Jimmy
Oh yes, yes I would have extended to 6 months. Yeah, that’s definitely — I think four months was — because if we extended it to a six months mark it would have passed that particular starting point of the downturn. That would have definitely had an effect on that. So I would say definitely, but in terms of what ultimately would have happened and how much different it would be from now… it’s hard to say. Because the longer you prolong it… in my opinion the dump that would have happened would happen anyways.
Brad
Right, and I appreciate your transparency. I sincerely mean that because we just need to be as frank as possible and you certainly are bringing that candid response right to the fore and right to the table. Now let’s move away from price discussions for a moment. Obviously I did want to address that for the community and you’ve made it clear. Oh, actually let’s just go there one more point are you optimistic about the price?
Well, yeah, it has to be frank I’m perfectly fine with priced discussions. I mean it’s completely normal in this particular space.
Brad
Okay, well let’s do it then. You know, it really helps us along. Now obviously what is the price? And talk us through your projections. Literally about the value you have now in conjunction with the plans that only you and your team could possibly know as you move forward in the huge enterprise and utility space.
Jimmy
Yeah, so right now we’re holding off from activities that may influence the price directly in terms of the capital market. Because I don’t think we can fully capitalize really on that right now. But in terms of say, liquidity, exchanges more is coming down the line for sure but right now, like honestly speaking, it’s not going to have really an effect on the token.
But interestingly, not a lot of people understand that.
Brad
Talk us through why and talk through that in relation to the current state of the crypto economy.
Jimmy
Right, so “why” is because, first of all, if you look at the market in general, people know that in terms of the dip or whatever that’s gonna happen people are braced for the worst that’s gonna happen this particular year. So people will kind of have an expectation of how the timeline would actually play out. We have an expectation as well. And we think that in order, for in lack of better words, like a pump to really happen, the right conditions regarding the project, regarding the market, as well as something about exchanges and liquidity would… those three ideally you need to occur.
Brad
I see, so what you’re saying quite simply is there’s no alignment right.
Jimmy
There’s no synergy between those elements and right now and in terms of… so but what we can do right now, is prep everything for that point in time. So that’s why community building right now is such an important thing. So the goal right now is to have APEX become a project that’s pretty much aware by the entire crypto sphere and not by what they would say… not using typical, say, ways of growing awareness what would be what some people would refer to as shilling, right. But by real stuff that people can actually see.
Brad
Right. Has that been a cancer Jimmy? Has that been a cancer in your opinion as a CEO in, you know, the last year of crypto, and I mean crypto specifically, has that been a problem that’s really challenged projects that are literally trying to be good technology for now and the future?
Jimmy
I think that is certainly true. We see these projects with, like, real use case, real technology, or even a potential real ecosystem ready to adopt it with very disproportional token values or, okay, so based on real-life perception of value it’s very disportionate in terms of the market cap or the token value.
But it’s just a trend that’s that will change soon, so I think after this wave at the end of this year there will be a major market adjustment that changes the way people look at these certain things.Because even in our community itself I think people are starting to realize that, as of this point in time, there’s not too much investment rationale you can rely on. At least in the short term… so, in the long run, sure, but in the short run things happen for very arbitrary reasons. Not very similar to regular financial markets or even equity.
Brad
I see, so you’re essentially saying that there’s going to be a greater influx of rational?
Jimmy
Yeah yeah, and I think before that it’s gonna drop to very, very low. But for this market to become something of multi trillion-dollar market size like eventually comparable to, say, you know, to come up the real commodities market or so, it needs to experience that kind of transition, as well as that adjustment.
22. APEX Node Ecosystem
Brad
I see. Well thank you very much for your reference and explanation of the, you know, and comment on the economy itself. I do appreciate that. There we can move back to APEX for a moment. Now you reference once again the supernodes and voternodes but again that’s housing a bigger thing that APEX calls the Apex node ecosystem. Can you talk us through those elements and why they are so fundamental to the overall success of this ecosystem?
Jimmy
The Apex node ecosystem is a way for all the stakeholders of the network from the community investors, enterprise users and strategic partners to first align with the ecosystem and produce value at the same time. And of course in the long run it it also has a financial factor that ties into the value that they add or the type of node or…
Brad
Can we talk about that though in detail with regard to each of them? So let’s go to supernodes first — now what’s the primary aspect of that / what is the core function of that, and how do people, you know, benefit?
Jimmy
Well, the supernode type of node is necessary for the delegated proof of stake type network. So for delegated proof of stake networks that have particular use cases the supernodes are typically either partners or users of the ecosystem, as well as the core development of the project. So that that also includes Apex itself. Right, so the the node requirements and incentives and how it’s set up really aligns with whatever utility value that, if the node holder is a user or whatever other partner, can get out of the network in the same place. So…
Brad
But what’s the core benefit though, specifically? Why would a person use this and be a supernode, and what’s the benefit for the community and what’s the benefit for apex?
Jimmy
Right, so it means different things for different parties involved. So for for the price these users simply what that means is you can create your own assets on the chain as well as run your own sidechains. So it’s really the utility value. Now for some private sale investors that have held their allocation for very long, for them they just see it as a way to receive kind of dividend-like returns in the long run.
Brad
Okay now let’s talk about the criteria then in that case. What’s the criteria to be a supernode in that sense? My understanding is you need to have a specific number of tokens, and there’s a whole bunch of criteria that you have to…?
Jimmy
Right, so the criteria is actually in the overview document…
Brad
So obviously for those who want to reference that for time constraint…
Jimmy
Right, so first, I think the the first requirement is it needs to make sense for that particular party to be a supernode. So that particular party needs to be a part of the ecosystem at least in some way. So it typically falls down into four categories;
One is the enterprise user ecosystem, second is strategic investors, third is community leaders or localized community leaders of particular geographies and fourth is strategic partners including certain government entity related partners etc. So that’s pretty clear that they all have some kind of a stake as well as add value to the entire…
Brad
I see, so obviously there are inherent financial… there’s financial gain for those who are supernodes, but I want to move that now to the overall architecture and the community itself. How does the participant in the economy that you’re creating benefit from having supernodes? That aren’t them necessarily, that are others who are privileged by the criteria
Jimmy
Oh yeah, so the super nodes, they really do a large amount of work in regulating and securing the blockchain itself. So they’re kind of base infrastructure and the rest of the nodes kind of branch out from that infrastructure. So in very simple terms they’re also running the infrastructure of the blockchain.
Brad
I see. So they’re essentially the governance aspect of it. Yeah can we talk about the voter nodes at some point as well?
Jimmy
Yes. So the voter nodes can very much, will, benefit from the supernodes that’s on top of them, because a part of the profit from all the fees as well as rewards, they actually go to the voter nodes. It gets cut from the supernodes, but there’s a degree of freedom where it’s 30% to 50%, but that’s the min as well as the max range.
Brad
Okay. So how does the person become a voter node? Is there other criteria that’s outlined for that as well?
Jimmy
All they need to do is, they would eventually just download the desktop client and have the minimum required of CPX for that particular tier and their voter node, but all these tiers have no requirement at all, so they just need to be running that client on their device.
Brad
Right. Now Jimmy what’s the reason why they would do it? What’s the incentive and reward?
Jimmy
Well it’s similar to the supernode except lesser in degree. So for voter notes, the interesting thing about our voter nodes system is that it’s in very well thought out tiers, and everybody has — can potentially have — some kind of role in this particular node ecosystem. But the larger holders are obviously compensated differently. So for example a Genesis versus Tier 1 voter node; One is 200,000 CPX, one is 400,000 CPX — they receive a different weight of rewards based on every CPX. So it’s not just a proportion of CPX they have — for every CPX that they own, the weight of the rewards is different.
Brad
Right. So by building these voter nodes and supernodes you’re trying to reward, is my understanding, those who are the hodlers, the ones that see the value in your actual token.
Jimmy
That’s one aspect of it yes. But in general it’s what we would say is a more ideal token economy design for the long run.
Brad
Right. Well thank you very much for explaining that. Now, I want to talk to you about the debate between centralization and decentralization, because you referenced before about the supernodes being a governance model. Is it fair to say that this is this creates a centralized system initially?
Jimmy
It’s not exactly a centralized system, but in terms of, if you compare it to like, you know, just regular proof of stake, comparatively it’s more centralized right. But say once you grow the super node ecosystem to you know, like 20 or more nodes or even 40 or more nodes, and these nodes are actually kind of elected as well as in a way audited by the voter node community. in a way it’s still decentralized. But sure, the infrastructure, let’s say, is more centralized. The more supernodes that you have, the more delegates that you have, the more load it’s on the performance of the entire network. So I guess that’s one of the concerns as well.
Brad
I see, so how are you dealing with that? Because obviously you want to have more supernodes but you don’t want to put more pressure on the network. What are you doing to address this double-edged sword?
Jimmy
Well, some networks are using new technologies such as sharding etc, but we’re using sidechains for enterprise specific applications.
Brad
Right. So that makes it horizontally scalable. How is your TPS going in terms of testing? And are you fulfilling the requirements of the inner needs of the enterprise sector?
Jimmy
It’s too early to say at this particular point in time, because we need to replicate a much larger number of nodes. We’ll know more by testing it.
Brad
Yeah ok, all right, well we’re looking forward to that.
Jimmy
This is something that we’ll definitely will optimize the hell out of before mainnet launch. But I think there’s more important stuff then TPS.
Brad
Absolutely. Well Jimmy let’s talk now about dApps as well. How many have you got on board right now as a platform, and what’s the plan for the future that you can tell us, you know, really clear and succinct numerically, what’s the number and what’s coming?
Jimmy
So upon testnet launch that will be when we start exploring and planning, as well as executing the dApp development for the first wave of pilot users.
Brad
But surely you’re talking to people right now in preparation?
Jimmy
And they’re signing contracts etc. So, as well as we’re getting compensated for the development resources that we’re putting in as well. So, by mainnet launch there would be roughly 10 applications, like initially, for 10 different companies that we kind of bring over to mainnet that would be starting development after testnet, yeah.
Brad
Ok, so that’s exciting, because that’s really the first iteration of dApp development moving into, you know, unlimited potential.
Jimmy
And honestly speaking, some of these companies are pushing us on a schedule that’s very, very tight. And that’s actually, like, ahead of our own schedule. So we have to tell them to kind of slow down.
23. Roadmap progress
Brad
Right. Well let’s talk about your schedule though, rather than theirs. How is your schedule going? Are you on track with your roadmap for the testnet coming in at the end of the year?
Jimmy
We’re… I would say we’re ahead of schedule.
Brad
Okay, that’s great to hear and we’ll look forward to the announcements as they come. And Jimmy, I want to talk to you about some of the community feedback. Having looked through the Telegram and the Twitter, one of them is with regard to interoperability — can you talk us through the plans with reference to other blockchains? How are you going, we’ve also explained the ERC20, it’s an important news development, but are there plans beyond that even with other platforms?
Jimmy
I think the number one priority is to, in a robust way, develop and test as well as drive adoption to the Apex Network itself and not thing about interoperability. But in terms of cross chain, I think it’s not a focus of ours, but eventually it will come into the picture, but more likely with other partners that develop the cross chain infrastructure. So there’s particular projects that develop the cross chain… that focus on cross chain, and I don’t feel like we have the need to rebuild that tech.
24. Exchanges
Brad
Sure. What about exchanges? I want to talk to you about that because you have three currently, that’s my understanding, Switcheo, LBank and another one, please help me out with that one it’s…
Jimmy
Bit-Z yeah.
Brad
Right. Now those three, people have commented obviously you know about this as essentially, let’s say, it’s less than A grade in terms of the hierarchy of, you know, perceptions out there of exchanges. What can we expect in the future? You alluded to nothing in the near future, but are there things like, or will be, are there things like Binance on the horizon — the distant horizon?
Jimmy
Yeah, that’s definitely planned in the future, like, let’s say a top 5 exchange that people… So, the rankings right now don’t even matter anymore.
Brad
Why not?
Jimmy
Because there are exchanges… So there’s new exchanges popping up that’s getting to top 10 within a matter of 2–3 months, but they have certain mechanisms that drive up the volume. So not necessarily the truest organic, like, volume.
Brad
So can you talk us through some of those, because that would be good for the community to know. You’ve assumed now, through your experience, that there are some up and coming centralized exchanges that, perhaps even decentralized, that can really challenge the current status quo. Who are they, and are you also engaging with them?
Jimmy
I think there’s two types. There’s one type that, it looks like on the surface that they can challenge the status quo only because they have a certain volume etc. But a lot of that volume is fake or it’s by a mechanism called trading mining. It’s a new thing, that, that kind of volume they have asterisks by it as well as it’s excluded from the list of counted volume on CoinMarketCap. Now, not that those are bad, but it’s hard to see the real competency of these exchanges. Now there are some others that really have a solid pedigree, and as well as they have a good, very good trading platform, even in some cases it’s better than your top exchanges like Binance or Huobi or those. And in those cases we’ve seen a couple, we’ve seen a couple.
Brad
Can you tell us yet?
Jimmy
Yeah, I mean, my knowledge is limited, but I would say one of these is one exchange to watch is one called CoinSuper. It’s a Hong Kong based exchange with a, like, the core team is from a traditional equity exchange background, so they’ve been building trading systems etc. So I know the team etc.
Brad
I see, so obviously you focus on some of those interconnections with traditional business as well, and you’re looking for new models of exchange. And clearly from what you’re saying is you are having discussions right now with other potential exchanges.
Jimmy
Yeah. We’re also having discussions with the mainstream exchanges that people have heard of. So it’s several different routes. But I do think that in terms of the exchange space, there will be some shifts in the next six to twelve months in, there will be new players that’ll definitely disrupt the landscape. We’re already starting to see that.
25. Fraud and Twitter impersonators
Brad
Right. Now I want to talk to you about some of the concerns also with regard to impersonators. Those who are getting on to Twitter or to different platforms and pretending to provide giveaways. Can you clarify for the public what your position is as the leader of Apex, whether or not that would ever happen and, you know, what would you say to those who perhaps have been tricked by those?
Jimmy
Yeah. I mean, on our Twitter there’s fake accounts with one letter different that says, oh, Eth giveaways etc. And apparently people actually fall for that. But unfortunately we can only warn people, but people do fall for that, as stupid as it sounds. I think this is an issue that a variety of project leaders including, you know, CZ of Binance has been trying to address. I mean, people have been coming to me with this class action thing, record a signature and it goes to Twitter etc, to actually implement a functionality etc.
Brad
I see. But essentially you don’t give away anything on Twitter.
Jimmy
But the nature of the space, there’s a lot of scams, and people need to be cognizant, they need to be vigilant.
26. State of NEO
Brad
Now let’s talk about Neo. I said that I would discuss this earlier, and I really want to dig deep here. Can we talk about the fragility of Neo, how that’s impacting you and what your own personal view is as the CEO of Apex?
Jimmy
Well obviously we’re trying to get mainnet up and running as soon as possible, because then these kind of things really wouldn’t affect us.
Brad
Are you, you know, in hindsight would you have used Neo?
Jimmy
That’s a hard question.
Brad
I know, I’m sorry, but that’s my job and I do have to ask you that given all the things that are happening to Neo right now
Jimmy
You know, in hindsight I may have done a lot of things different, but I think when people ask in hindsight, when you give an actual answer it doesn’t really mean anything, because things happen the way they do. Because things are, in a way, in that particular moment…
Brad
Jimmy, I really respect obviously that response, but if we can just get real about the technology for a moment. You know a lot about the things that have evolved in Neo. I certainly am someone who’s spoken a great deal about it. But right now, immediately, in today, we’ve seen literally some serious problems.
Jimmy
So I’m actually quite in tune with what the, you know, the Neo core development team as well as the Ontology core development team is, like, doing. I mean Neo, it’s still upgrading itself in terms of the technical side of things. But I think in terms of the amount of future developments, it can’t compare to Ontology.
Brad
Sure, and that’s what I want to talk to you about. Are you concerned at all about the inherent support that Neo is currently providing for Apex until you move into that testnet phase at the end of the year? Do you feel that there’s in any way a risk for Apex right now because of the fragility we see or perceive?
Jimmy
I don’t think there’s actually, in that sense, there’s not much of a risk because the association of Apex in Neo it’s very simple. It’s just an asset that, right now the placeholder token is just an NEP5 standard token. So it’s just an asset that’s issued on the Neo blockchain that, once mainnet comes around, will be a 1-to-1 swap. So that particular role that Neo plays is, in the Apex project right now, it’s really the placeholder token, so it doesn’t really affect anything. But if I were a project building on Neo right now, kind of an entire decentralized application, I wouldn’t know because we didn’t really go that route.
27. ICO metrics
Brad
Right. Well, I really do appreciate though, that you’ve answered that as best you can. Now, can we talk about the way in which you utilize funds? You know, obviously as you did your ICO, the mechan… the way in which you design just the metrics was to have funds to be able to develop, invest into development, and how are you doing that?
Jimmy
So how we use the funds is really that the technology as well as the the adoption side is first and foremost. Because if you don’t have enough funds at the end for that, the entire project breaks down in the long run, so that’s not good. So, now, on the exchange side there would be quite a bit of expenses with the exchanges, but not that there’s anything wrong with that. We prefer to go into that route once a more comfortable position comes around. Say for example when the market turns back up etc. So one disclaimer is, to give a little bit background on the fund management, is that one thing that we regret not doing is moving the Neo to USDT during its peak. So we in fact did not really focus much on… it was just basically put aside.
Brad
So how much of a loss did you incur because you didn’t do that? Sorry interrupt once again, but how much of a loss did you incur, Jimmy, because you didn’t do that conversion?
Jimmy
At least, at the very least, 1/5th.
Brad
Right. So now, once again, you’ve got to try and redress some of those losses.
Jimmy
Right. Now by 1/5th we don’t mean, like, we lost 1/5th.
Brad
It’s a theoretical loss.
Jimmy
Just dropped more than 1/5th, so that’s…
28. NEO community and their growth
Brad
Alright. And, with that in mind, I did want to discuss this with you. Do you foresee that kind of growth again in the Neo ecosystem? And I do say that because of the way in which you had that initial sort of structure, and I guess value, associated with Neo. Tough question again.
Jimmy
I think it’s plausible. I think it’s plausible. But I think, to what extent… I think in terms of growth we have to be clear on what the growth actually is. Growth in the technology? Growth back in the token price? Growth in the overall Neo community?
Brad
And the smart economy.
Jimmy
…is hard. I think any significant growth in the Neo community is hard, because I think people… This is just based on my opinion, people that are part of a Neo community or would know of the Neo community, I think the next thing they’re just looking at is Ontology.
29. Why will APEX flourish?
Brad
Once again I sincerely appreciate the kind of transparency right now, it is very rare I can tell you when I speak to a CEO. Now, if we could just finish off with one more question I have for you, and then I would love for you to make a final comment on behalf of all the Apex core team. I want to ask you; why should someone essentially remain bullish on Apex? Generally, what’s your reasoning behind why people should have confidence in Apex as an entity, as a comp… potential company, and as something that can, you know, be effective in this decentralized business?
Jimmy
Yeah, so I think soon people will realize and see things and real developments that will make them see, «Ok, so this is the next generation blockchain technology that actually has real, close to value, use case that can be realized very soon». So that’s when, that’s one particular thing. And also one fundamental thing to add to this is; without a long term token economy or node ecosystem design, it will… it is not as as sustainable even if it had adoption. So it’s a combination of real world value and token economics design for the long run.
Brad
I see, so Jimmy, it’s been an absolute privilege talking to you. Is there anything you’d like to say specifically to the community on behalf of your team just to finish off in case I’ve missed anything at all?
Jimmy
Yeah. I mean, it’s pretty simple. So, I mean, we thank all the supporters up till now and even the long term supporters, and I think you’re in to see some very interesting stuff in the near future.
30. Closure
Brad
I certainly look forward to it when you give me the call so we can discuss the specifics of these updates, but until then Jimmy Hu, you are the CEO and founder of both Apex and Chinapex. You’ve referenced many different updates. You’ve explained to us some of the fundamentals once again on behalf of your team. Thank you very much on behalf of those who wanted to know more about Apex generally, and Jimmy we look forward to being updated by you and other members perhaps of your team as you emerge, essentially, as something that’s trying to challenge the status quo, trying to be something new, bringing blockchain into the frame of business, and really showing the most important thing, and that is use case and utility. Thank you very much for your time.
Jimmy
Thanks Brad.
Brad
You’re welcome.
