Cardstack ICO Review
Another infrastructure project that caught my attention recently is Cardstack (https://cardstack.com/). At first sight I really love the idea and I find the concept both visionary and somehow almost noble-minded with it’s focus on open-source ecosystem. Let’s see how it holds up under a closer look.
The problem
Cardstack postulates following problem — today’s computer users do use a lot of different applications and services on daily basis, most of those paid for and managed separately. These services tend to live in disconnected worlds, and while some of them do integrate with others, there’s no standard way how to share information and manage access to your data across application domains. This requires the end user to keep track of and manage multiple application and service subscriptions, possibly using different tokens, and solve often non-trivial problem of data sharing.
The Idea
The idea to create a decentralised orchestration layer that inter-connects services both on cloud and on blockchain. To me this immediately evokes existing services like IFTTT or Zapier.
Cardstack proposes to do this by creating a decentralised platform called Cardstack Hub, that would serve as a inter-connection fabric between various (d)Apps and services. Information passed between individual services would exist in form of cards. Cardstack would also allow users to manage access to their data, stored at various storage providers, and handle payments and reward distribution amongst the services. This all would be presented to user in a consistent way via a mobile and desktop apps. The UI experience would stay same across different apps and services.
Main parts of the solution are:
- App Framework — SDK for building cohesive blockchain apps, at it’s core is Cardstack Hub, which orchestrates data and value transfer across multiple blockchains and the cloud.
- Tally Aggregation Protocol — gives dApps the power to perform complex computations like batching payments or counting votes.
- Cardstack Token (CARD) — ERC20 token, used to monetise the Apps via smart contracts.
As the whole idea is a bit complex, I recommend watching the introduction video (10 mins.) to better understand the high-level concepts of the platform.
Idea rating: 8/10
White paper
The White paper opens with executive summary and mottos of “For Makers: Fair distribution of rewards” and “For Users: Cohesive user experiences”. This pretty well sums up core value propositions for users of the platform.
Our mission is to build an economically sustainable software ecosystem that fights back against the rampant lock-in mechanisms of centralized platforms.
The paper continues on describing the problem of many standalone isolated apps and difficulty of managing multiple subscriptions, and proposes reorienting applications around end user into interchangeable pieces, divided into layers based on provided functionality.
Next section is about describing the main concepts of Cardstack platform:
- Card based, cohesive UI
- Bridging blockchain and cloud services
- Progressive decentralisation (ability to mix pieces of the software stack)
The paper follows with description of technical architecture and main benefits:
- Use same code to build p2p, mobile and centralised web apps
- Cardstack Hub, acting as the orchestrator of user’s workflow, uses CQRS design pattern to basically segregate read and write operations paths
- Cardstack Hub can be decentralised in case of p2p apps, or hosted in case of web and mobile apps
- Plug-ins based architecture
- Common principles provided by Cardstack Hub — Networks of users, Queues, Environments , Configurations and Libraries
- Open-source card catalog
- Mix and match system for cards and applications and the concept of chaining cards together to form a workflow
Next section of the paper describes economics of the platform. Mainly how the funding of services is expected to work and allocation of rewards across multiple applications. Cardstack proposes use of two tokens:
- SSC (Software & Services coupons) — can be acquired either by converting from CARD tokens, or directly purchased by fiat currency, used to pay for service consumption based on metered usage.
- CARD (Cardstack tokens) — tradable, ERC-20 Ethereum based tokens, used to distribute rewards between makers and miners.
Cardstack further proposes to create model for fair distribution of rewards and it’s implementation via Ethereum smart contracts. Important takeaways — users pay only for what they use, and rewards are fairly distributed amongst makers and service providers.
Next sections are dedicated to project history (it’s been around since 2014), team and ICO itself (describes token allocation, mining process and governance of the platform) and project roadmap — more on those below.
Closing section then points reader to additional resources, mainly three additional papers for more in-depth explanation of relevant areas:
Concerns
At this stage I have a feeling that CardStack proposes a lot of complex ideas and mechanisms to build this sustainable inter-connected universe, and not only that. It also wants to solve problem of rewards distribution and create sustainable ecosystem for open source software. I find these being non-trivial problems and wondering whether it’s not trying to solve too many things at once?
Cardstack Hub — in case of mobile and web apps Cardstack Hub would be centralised. This is the layer responsible for control of the users data. Who is expected to run it? Cardstack itself? Wouldn’t it become pretty much centralised component of the whole platform in that case?
Cohesive UI — I’m wondering if forcing applications to use one UI might not be a bit too restrictive? Lot of the applications have quite distinctive UIs and I’m not sure how would this translate to the proposed card world.
Overall the White paper is well balanced between tech and business aspects of the projects and answers most of my, mainly technical, concerns. So far good!
White paper rating: 8/10
Prototype
Cardstack claimes there are working plugins published to Github cardstack/cardstack. After briefly looking at the above mentioned code (all is implemented in nodejs and Ember as the front-end framework) I started to have a feeling that it has pretty much nothing to do with blockchain. It seems like a basic framework to interact with 3rd party cloud services. This was further confirmed by the packages currently present, with names like drupal-auth, elasticsearch, or github-auth for example.
There’s a package called ethereum, added recently (15 days ago on 28th of Feb) , which seems to add some basic interaction with Ethereum contracts, but I’m not convinced.
At this stage I have a suspicion that this platform was originally designed without any blockchain functionality nor tokens involved.
I was wondering if I’m just missing a point or something, so I have decided to try the demo app. After cloning the repo and starting the necessary elastic search dependency, I was able to bring up the app (after sorting out couple of missing dependencies). What I got was standard Ember basic demo app (simple web app talking to server, backed by ElasticSearch, via REST API). No cards, no consistent UI, nothing decentralised at this stage.
In addition to this I wasn’t able to find any preview or initial work on any of the the smart contracts mentioned in the white paper, which literally says “We will open source all 20+ smart contracts via GitHub”. I guess the real question is when?
Maybe I’m expecting too much, but this is not good enough.
Prototype rating: 2/10
Roadmap
Roadmap form White paper states “Network ready for Business” at the end of 2019. This seems a bit too long, almost 2 years before you expect to be ready for business customers? I understand it’s a complex project, but I would rather see some smaller part that is able to provide value and be adopted by paying customers and then incrementally build on top of it, based on users feedback, rather than delivering as a big bang.
Team
Cardstack calls it’s team Contributors, and this left me slightly uncertain what does it mean. Are these people fully committed to the project?
- Chris Tse — Founder and main person behind the project, Head of Product. Chris has a history of co-founding couple of companies, more recently .BC Media, which seems to be developing “an open framework for decentralised interoperability for the music ecosystem” (coincidence?) and Monegraph, “platform allowing anyone to register creative works on the Bitcoin blockchain“. While clearly Chris has a long entrepreneurial history and relatively technical background, none of his previous companies seems to be a huge success that I would love to see here.
- Ed Faulkner — Lead Developer and second person listed on the website, core Ember developer (https://www.emberjs.com/team/). Very strong technical background and MEng from MIT. Definitely good person to have, only one question — why is Cardstack not mentioned in Ed’s LinkedIn profile?
- Hassan Abdel-Rahman — Sr. Blockchain Developer. Quite strong tech background, although focused very much on front-end, Ember. Is experience from Monegraph - ”Hassan cut his teeth working on crypto at Monegraph” - enough to be a senior blockchain dev on project like this?
- Justing Thong — Data scientists and author of the “Proportional Attribution and Allocation Model” paper. Pretty much coming straight from uni after achieving Masters degree.
It’s unclear to me how is leadership of this project going to work, nor what does status of “Contributor” or “Contributing Developer” mean. Lot of the folks don’t have CardStack on their LinkedIn profile and it feels like they’re not onboard to fully commit their time to the project, but rather that they might have contributed some small bit, like maybe a couple of commits to the GitHub code. In addition to that many of the listed contributors seems to be associated with Monegraph, another of Chris’ companies.
While the teams seems to be strong around front-end dev experience, I’m missing people with strong background from other areas — technical experts on Blockchains & crypto, backend or leaders with successful previous ICOs and/or startup experience, or strong team members with strong business background.
Team rating: 4/10
Advisors
I wasn’t able to find any mention of Advisors anywhere on the website nor in the White paper. Not sure whether Cardstack decided to do things differently, but it’s not a good sign to me.
Couple of companies like Bitcoin Suisse AG or Wachsman are listed under the Partners and Advisors section, but I understand those are companies Cardstack worked with to handle legal and tax aspects of the ICO rather than individual people who would come on board and put their name behind the project.
Advisors rating: 1/10
Competition
I’m not aware of any ICOs in same space at the moment of writing this article, however similar (although admittedly less complex) established services do exist, like IFTTT, Zapier. After a quick googling session it turns out that there actually are plugins for IFTTT to interact with blockchain, such as TxHash — Blockchain as a Service. I realise this is still quite far from what CardStack proposes but I was not able to find any more directly comparable competitor. Nothin in the blockchain space AFAIK.
ICO
The estimated price of a CARD token is $0.017 USD. With the total number of 10 billions token this gives us $170m market cap, which is quite substantial cca. 0.04% of total crypto market cap at the time of writing.
60% of the total tokens will be generated in TGE (token generation event), and from those 60%, 40% will be offered to public in 3 rounds. The remaining 40% will be minted over the next 10 years and allocated by the smart contract to makers and miners providing services on the platform, in order to encourage participation.
That leaves us with 24% of total number of tokens going to sale. The sale has a hard cap set at $35m, and soft one at $10m (details can be found at https://medium.com/cardstack/announcing-the-cardstack-token-generation-event-b694fa04c5a6).
Previous rounds
There were already two previous rounds:
- Early contributors (20% bonus)
- Pre-allocation (10% bonus) — $6.5m haven been contributed
I haven’t been able to find any info about how much in the initial early contributors round — this is a bit worrying.
TGE token distribution
Of the initially generated 6 billions of tokens, 40% will be available for public sale, additional 8% for airdrops, 20% going to Cardstack Foundation, 15% to Cardstack Syndicate, 7% to advisors and agencies and 10% to ecosystem initiatives.
The Cardstack Foundation is a non-profit foundation based Switzerland, its goal is to promote and develop the Cardstack software, architecture, protocols, and applications. The Cardstack Syndicate is a New York-based product design studio founded in 2014 by Chris Tse to build the underlying framework and realize the Cardstack vision in an incremental manner.
Use of proceeds
Majority of funds go to building the platform (40%) and to help clients getting onboard (20%).
Overall the ICO itself seems quite standard, nothing unusual. I find the 0.04% share of total crypto market cap to be very ambitious, so basically this project is IMHO asking for a lot of money.
The tax and legal aspects of ICO are handled by experienced parties, the pre-sale itself happening through Bitcoin Suisse platform, platform for last crowd sale round is not clear. Slightly worrying is the fact the they haven’t disclosed how many tokens have been sold in the Early contributors round and how many are still left for sale.
The date for the 3rd (Crowd sale) round has not been announced yet, but you should do KYC via IdentityMind Global if interested.
ICO rating: 6/10
Community
3.4k follower on Twitter, 14k members on Telegram. GitHub repo has 10 Contributors and 112 stars. I would like to see more for a project that’s asking for $35m initially, mainly in numbers of contributors to their GH repo.
Community rating: 4/10
Investors
I haven’t find any mentions about institutional investors being on board, IMHO not a good sign.
Investors rating: 0/10
Overall
There was one though gradually emerging in my head while putting together this review, which I could not quite put my finger on for a while, but then is appeared. I realised my biggest concern is that this project is kind of contradictory — on one side the aim is to build decentralised platform, but on the other it’s doing so by imposing use of common framework, effectively forcing apps to be limited to some common subset of functionality. And if not, they’ll have to interact directly… but wait, they can already do that, without Cardstack. Not to mention the Cardstack Hub acting as centralised service. I believe that applications, for which it makes sense to integrate, will do so directly in truly de-centralised manner and without using some 3rd party. Actually we can already see lot of apps using services like GitHub or Facebook for authentication, services like Dropbox or Google drive for data storage and many others.
Keeping the idea itself aside, the Cardstack is asking for a lot of money. And while the White paper is all polished and nicely done, after looking at the progress so far and the team, I’m not convinced. I’m also confused about the project leadership structure, lack of advisors and lack of any institutional investors.
However I find the concept of universal platform for inter-connecting and paying for applications extremely tempting, I’m not convinced. Should I borrow the Warren Buffet’s idea of having 20 slots for your investments in a lifetime, Cardstack will not be one of them.
Overall rating: 5/10
Disclaimer: Information provided in this article is not investment advice, solely a personal opinion, without any warranty whatsoever. I’m by no means financial advisor or anything of that sort and most of all I probably got it all wrong! You should always do your own research, invest at your own risk and never invest money you can’t afford to loose.
