Live Streaming AMA with Richard — Recap and Minutes.
Dear Community,
We’re immensely grateful that you joined us during our second live AMA. Many updates, questions and milestones were covered and we were able to let you know where we stand in our project. Our hope is to make the live AMA a regular part of our communication plans.
The AMA provided an opportunity to show the community some of the latest progress on the dev front and other significant updates that the community found really enlightening. If you missed the AMA, here’s a recap of minutes of the livestream.
Lition Blockchain Progress Report
We have been really busy and one of our brilliant developers, Matos will give a demonstration of how easy it is to setup your own Lition sidechain, make sure tokens are transferred and that the network is working properly. This is the foundation for transactions to happen and for real life business use cases. We are of course really interested in that because that’s what blockchain should bring to the mass-market. This is one of the reasons why we were in business in the first place. Many people ask if we are still on track to release the final or public version of the Lition mainnet in Q3. The answer is Yes, we’ve been doing good work and making great progress. We’re definitely going to keep the promise full stop.
Partnerships
We’re very happy that Fantom and Lition are teaming up. Fantom has a very good and technically advanced mainnet solution where our sidechain will anchor into so that’s a good complementary situation. The advanced Fantom technologies especially their DAG technology (which is fast, efficient and safe) and the Lition sidechain (which can handle private data and scale beautifully) will work together and that’s the nature of our Fantom cooperation that we announced earlier this week.
Staking
Yes, you can stake even without running a node. The Lition foundation itself will run a couple of nodes and validate nodes in our side chains and we will split the revenue share. If users want to participate in the Lition staking rewards once our mainnet launches in the Q3 this year, then you can give the LIT tokens to the foundation. We will use those tokens for staking in the sidechains and we will give you the whole amount of staking revenues minus a little pooling fee to our hardware costs. This means you get the staking benefits without having the hassle of setting up a server, making sure that the connection details are right and so on.
We want to make sure the Lition mainnet is very robust. That’s why we need a lot of staked tokens so that no one can fool the network and that people can really trust your transactions. Lition will therefore allocate a large portion of foundation tokens, ecosystem development and most of our own tokens as staking for our sidechains and we will burn the revenue we get from there. This is because we don’t think we should make money off real-life use cases now. Maybe in a few years from now when the Lition sidechains are used in many use cases throughout the world, we will consider it. Burning tokens will also decrease the circulating supply of Lition tokens.
Security Token Offerings
We’re still in active discussions with two security token companies and both of them German and acquired through our network. From a technical point of view, things aren’t sorted out and we’re still in discussions. That’s why I cannot announce names publicly yet but we’re confident that we’re doing good progress here. Security tokens are still a priority for Lition because the infrastructure just fits so nicely. You can keep the security token holders private if someone sold all of his security tokens. You can delete the data about him so there’s a couple of real unique advantages that only the Lition blockchain can deliver for these use cases.
Energy Use Case
We now have real commercial customers in more than 250 cities and the average revenue per year is very healthy for us and it also tells us that in a blockchain that energy is not just a niche product it’s something that is appealing to a larger audience and should you live in Germany, you’re very welcome of course also to get your own house supplied by our electricity. Just go to our website at www.lition.de and you can then sign up now.
We have a few unique advantages like you can choose your supplier and of coursewe’re very cheap, usually we’re the cheapest energy provider in the market so you’re not just helping the environment but also especially due to technological advantages, you save a lot of money. Around 20% on average right now is what our customers save and why is that good? Because you can save even more if and that’s something we’re currently evaluating if you pay your electricity bill using Lition tokens. Right now, you can do that with Binance tokens for example, that’s an announcement we had a few weeks ago and we’re currently evaluating, especially from a legal point of view if we can accept Lition tokens as payment for energy bills.
We also are not looking to earn money right now. We’re looking to be big enough to really turn the market size we have into a profitable business and mass adoption. That’s why we will take the revenues we get from people paying the energy bill in Lition tokens and burn those LIT tokens, again decreasing supply.
Mid-Month Investor Token Unlock
It was last Thursday (August 15th) and as already announced in my previous AMA, we had a couple of discussions with a few investors regarding OTC deals and the outcome was quite positive. As you might have noticed, our price didn’t really change over the last token unlock so it seems that this strategy worked out. We will continue this in the future so that just like in last month, we don’t really see a noticeable price drop when investor tokens unlock in the middle of the month.
Update to Token Bridge for Swap from BEP2 to ERC20
We are actively working on this right now and we plan to release this within next month.
Recap of Questions
- Are there any new exchange listing in the near future as increased liquidity would help a lot?
Yes, liquidity is one of the key concerns for us. Last month, we focused a lot on the Binance Decentralized exchange and trading volume there is looking really good. We’re very happy about the uptake on this but of course we want to extend this to IDEX which is usually good as we’re usually in the top three positions in there when it comes to true trading volumes.
2. Are you in contact with other centralized exchanges?
We want to be the blockchain of choice for large companies and Binance is obviously the perfect partner for these companies and a natural fit for our business. We however cannot speculate and will only comment when we have something to publicly announce.
3. What other countries are you in contact with energy-related companies?
Right now, it’s mainly China. We’re especially in discussions with the grid companies through a connection through SAP who contacted us that we can support in discussions they’re currently having. Another one is Malaysia as Malaysian energy companies are doing a large IT modernization project and of course us being at the forefront is very useful for that. Last but not least, a third active discussion is going on with the Middle East in Qatar.
We are in discussions with another organization which would like to use the most modern available technology for the electricity infrastructure there. As usual, we’re not very specific when it comes to discussions.
One existing cooperation that is also energy-related is in South Africa with NESA Capital. That’s going quite good and so we’re in discussion with NESA regarding various solar power plans, which ones to use, how to best integrate them, how to consider the technical challenges like grid volatility which is very different in South Africa than in the Western countries. I can tell you stability and security of supply is also very different there yeah but that’s where the beauty of decentralized systems come in.
4. What is the status of the project with V&R Bank?
Looking good! When our mainnet launches next month, we will have at least two sidechains. One of them is the energy sidechain for our energy use case and the other one is the banking sidechain for our VR use case. The transactions of the VR use case which are currently in the public Ethereum network and therefore cannot be used in public because obviously it’s very private data will then be migrated to a new Lition sidechain and then we’ll also open it for staking.
5. With an upcoming depression, is Lition prepared and funded enough to survive?
To start off, funding-wise, Lition is good, we don’t have funding issues and are cautious about our expenses. We constantly evaluate our business opportunities so me being a very business-oriented person of course a dollar I spend needs to give me more than a dollar back. We’re not a spending factory.
6. What should we expect regarding hosting STO’s from Lition?
We are in active discussion with two STOs but we are not in the stage where we can publicly announce something. This would be linked to the mainnet release in the end of September. So even if we were to do a cooperation, we could only of course emit the security tokens after our mainnet launch and closer to the end of October.
7. Litoin Energy is profitable now, why don’t you put part of the revenue back to token economy?
The core Energy use case is profitable. We do however have a lot of non-core activities, like building on new technologies for example, which is outside of the core energy business. When we take that into account and all of the core cost, it’s still a deficit business, not much and overall healthy but still a deficit. That’s why it will be difficult to subsidize the blockchain with the energy business.
The deficit is nothing unusual as every startup in the beginning is in deficit. If it is not burning money, then there is no need to invest in a startup in the first place because it doesn’t need money. But every successful startup that made it to a billion-dollar evaluation over the last couple of years always was an investment case.
8. It will help to provide a visual explanation of the architecture covering Lition scope in conjunction with the SAP scope and Ethereum blockchain, and how all of the switch together as part of the public-private blockchain?
The best way to visualize this is our website. We have decentralized applications layer (our use cases) and we then have the Layer 2 Scaling solution which we co-architected with SAP. The integration with SAP depends on our working product when it is released in October. The public mainnet and the third part is the anchoring of the sidechains. We use Ethereum now and can include Tomochain, Fantom Chain and Binance Chain in the future.
9. It would be good if Jurgen Muller CTO of SAP joins the AMA to answer SAP-related questions.
Now I agree that would be very helpful but there will be time constraints because of the nature of his job. We still have regular discussions with him, most recently two weeks ago in this office. I would respectfully explain that it would be very difficult to achieve as he is a Board member on one of the most successful software companies in the world.
10. What are the staking rewards at mainnet launch for 100,000 LIT?
The staking rewards will be calculated by the number of transactions in the sidechain. These transactions in a sidechain each cost $0.01 in LIT tokens to be exact so right, pegged to the USD to help businesses calculate and plan regardless of what token price is.
Let’s say a sidechain has a thousand transactions per hour and a transaction costs 0.1 LIT. That would mean we would have 100 LIT in transaction costs. The number of staked tokens will share these rewards equally. Because we don’t know how many transactions will be processed, we will ensure that get at least 20% of your staked tokens at the genesis phase.
This is a way for us to promote adoption. You can also stake tokens without running a node. You can stake as a node or give us your tokens to stake for rewards. We will charge a fee but this fee will be burned.
11. Will there be a staking calculator to estimate rewards?
That’s a good point and we’ll think about that as it could actually be a nice easy gimmick.
12. Are you considering burning tokens for transactions?
Yes, absolutely to sum it up, there are a few ways where we will now burn tokens. One of them is when Lition tokens are used as a payment for our energy use case. The second one is we as a foundation will use a large portion of our own tokens for staking and we don’t want to make money off them so that’s why we will burn those tokens and the third way is we all have swap fees when you switch from ERC20 LIT to TOMO-based LIT tokens for example, basically a bridge fee which will also be burned. These three separate ways of burning tokens will decrease supply each time and then the token
13. Will the tokens become shares of the company in the future?
No, because otherwise we would be a security token and if you emit a security token, you need to have an offering memorandum or prospectus. You need to be approved by the financial authorities. We emit the utility tokens and are aligned with the financial authorities of Liechtenstein.
14. Any chance that token release strategy can be reviewed? There’s not enough demand to absorb all the tokens being released monthly so maybe it would be a good idea to adopt the strategy to today’s market conditions.
Well, I agree that it is a big uncertainty for the community and we realized that in the month of July when we had a token unlock and the price significantly dropped. That’s why we said offered OTC deals to some investors. The outcome was that when the token unlock was last Thursday, the price remained pretty much stable and I think that’s also how it should be. This new strategy is based on the results of last month and while we don’t know what will happen in the future, we can of course see that based the last results, it is worth implementing for future releases.
15. Is Lition Energy a separate company from Lition IO?
Yes, it is. Lition IO operates a blockchain while Lition Energy uses blockchain to sell energy.
16. Why don’t you put attention on other online communities apart from Telegram and Twitter?
I think we only have a certain bandwidth so we basically want to try and pick a few social media channels. Right now, it’s mainly Telegram and Twitter where we put all of our attention and where we respond quickly to any topics. We can run all the other ones like Reddit and YouTube but that’s not our core focus because you need critical mass for a community to be active and since we have this on Twitter and Telegram, we will channel most of our support to uphold them.
17. Can you go into detail the process for a company wanting to raise capital to launch an STO using Lition? Does Lition only handle the tokenization or do you offer services such as legal, insurance etc.
The core strengths of Lition are the technology and also the token infrastructure. That’s also the nature of our token cooperation where we basically are the technical infrastructure where you would deploy your smart contracts. We help with smart contracts and where the transactions are being taken care, when you trade your security tokens for example.
Separate to that is the legal topic. We of course know the legal situation right well because we need to design the technology to make sure it adheres the legal requirements. When it comes to a specific STO and how to set up the offering memorandum, how to talk to the financial authorities, that’s something we won’t do. Either they do it themselves or we work with a partner. Tokeny does most of these legal services for us as part of our partnership.
18. What does mainnet launch by September ending means? Will this include the SAP part of the work?
This means that we have a working solution where companies wanting to use the blockchain for the mass market deployment or for in general for real-life business use case can download our software, install it or spin up their own sidechain nodes, connect to the Lition Smart Contract on the mainnet and then use it for real life transactions. In the beginning, we as Lition will migrate our own use cases including the VR Bank use case for banking and syndicated loans to the mainnet solution. This is a requirement to discuss especially with SAP on further ways of collaboration.
19. Where do you see Lition in 2020?
We want Lition to be the best and go-to solution for real companies that want to benefit from Blockchain and private data. Pretty much every commercial use case has some sort of private data and if you want to adhere to the law of basically the whole European Union and countries like Korea. These requirements are quite mainstream and if a company wants to use blockchain technology to adhere to regulatory laws or data privacy then Lition is the best and the go-to solution
20. Lition has ERC20, BEP2 and Tomochain tokens. After the mainnet, what will happen?
In in order to stake tokens on a sidechain, the tokens that are staked need to be converted to the native format of the mainnet. If you have a sidechain that anchors to Ethereum which will be the launch solution in 1–2 months, then you need the solution of the mainnet in this case to be ERC20 tokens. If we run a sidechain on the Tomochain which is good for use cases that require high transactions per second and lots of anchoring, then you would need to convert Lition tokens to the Tomochain before being able to stake them. That only applies to the scenario where you run your own nodes where your own server which validates a sidechain.
If you are a financial investor, then as I mentioned earlier in this AMA, we will give you an opportunity where we take care of the technical issue so we run the node and stake your tokens without you worrying about the details. To facilitate the switch of tokens, we will be updating the token bridge to convert between all the networks that we currently support.
21. What about the partnership with Fantom regarding use case of deletable data-feature?
Right now, both of our use cases (the VR bank and energy use cases) will be initially launched on the Ethereum side chain but our third use for LawPilots could be an option that we use the Fantom sidechain for this for example or the Tomo sidechain. We want to basically make sure that we prove to everyone that the Lition technology works in real-life situations and scales and is robust. The more diversity we have in our use cases, the more credible we can be when we sell our Lition sidechain solution to buyers.
22. When are major exchanges coming?
We are working on it but we don’t give commitments. Exchange negotiations are delicate and we will surely act in the best interest of the company. We won’t spend a lot of money to be on an exchange and then it costs us money for business development and expansion. We have the long run view and hope to become a true company with long term far side.
23. Will there be more DAG projects or collaborations beside Fantom?
We are in discussions with a large DAG project here in Berlin and we’ve had a few discussions with them how we can integrate ourselves but it’s nothing that we can be certain about. From a technological aspect, the new partnership would really have to be required to elevate Lition to the next level and give some real business benefits to the Lition sidechain.
From a technological point of view, Fantom already is really good so I don’t think a new partnership with another deck project will give us another technological edge but there is a lot more than technology and the company we’re talking with for example, they have a very long history and they also have a couple of really good relationships and also a couple of use cases in various sectors where it would make sense to complement each other.
DAG projects usually have the problem of being one mainnet so they cannot take care of data privacy. Everything is in the mainnet just like Bitcoin and Ethereum for example and their sidechains of course have a natural benefit. One of the technical challenges is that all of our smart contracts are written in Solidity so very easy for us to use a Tomochain or a Fantom chain for example. But when we want to anchor to a mainnet which is not based on or which does not support solidity as a language, it’s a bit complicated because we basically have to reprogram everything to a new language to support that mainnet and that’s something which we will of course do but we will be cautious of company resources to spend only on partnerships where we believe that the real business benefits will outweigh these efforts.
You can watch the full AMA at https://www.youtube.com/watch?v=RSkp8C3RuWM
