Recap 2018 & Lition ICO
From the founders of Lition, Dr. Richard Lohwasser and Dr. Kyung-Hun Ha
On March 21, 2019 Lition concluded its ICO, raising $2 million in under thirty minutes. The token sale was a resounding success, reaching our hard cap of $4.9 million and paving the way for further blockchain development, innovation and growth over the next few years. Lition is now better positioned and on its way to shape enterprise blockchain solutions but before we charge ahead, we wanted to take a second to update the community on Lition’s past, present. In an upcoming post, we will lay out the strategic plan for 2019 /2020.
Humble Beginnings with our Energy Use Case
On December 27, 2017 Kyung and I founded Lition. This was during the height of crypto mania, when many unsustainable ventures were collecting heaps of cash to finance promises they could never keep. We quickly realized the key to building something special would be to take our time, tackle real challenges facing the industry and have real progress to show instead of making noise and trying to disperse tokens far and wide.
Starting in January 2018, we dove head first into laying the groundwork for the Lition energy trading exchange, using the Ethereum platform as a starting point. Initially we tried convincing established utilities to use our peer-to-peer trading solution on their customer base, but soon realized that without a proven solution, no one was willing to “put their customers at risk”, as we heard. Maybe blockchain based peer-to-peer trading was too new for this century old industry.
We therefore applied for a government license to sell electricity in Germany, so we could prove that peer-to-peer trading can actually work already now. Next to several licenses, we had to onboarding over 900 local grid operators, set up operations like a call center, billing department or energy trading so we could serve consumers. A partnership with Gasag helped us connect green power plant and the best possible customer experience, while deals with power plants across Germany helped provide a diverse set of renewable power sources. By April, our consumer website www.lition.de launched and we finally had our first test customers coming online. Now, almost a year later, the use case has grown to customers in 100 cities. We don’t get the “this blockchain thing puts our customers at risk” statement any more when talking to utilities.
Right Idea, “Wrong Blockchain”, No Good Solution
However, this was just the beginning of our blockchain journey. While testing the DApp, we quickly realized transaction fees on the Ethereum blockchain were far too high for both customers and providers alike. Users keen on switching between providers on a regular basis would have to foot astronomically high transaction fees, antithetical to our mission of introducing cheaper, greener energy to the mass market. There also was no on-chain privacy on Ethereum, and confirmation times well beyond 15 seconds for a purchase are a lot more than what customers are used to from Amazon, Ebay and the likes.
If we ever wanted to make renewable energy trading a reality, we would have to find another way. As spring turned to summer, another big question popped up on our radar: GDPR compliance. On May 25, 2018, the European Union’s GDPR went into effect, protecting user privacy by requiring companies to delete data after a user leaves the network. Much of the hype behind blockchain is immutability, that data cannot be tampered with or deleted. For obvious reasons, this conflict between legislation and technology was a big problem for any company seeking to deploy a blockchain solution. While many blockchain enthusiasts decried the EU’s new regulation, claiming that it would only stifle innovation, our team put our heads together and looked for better solutions. Massive abuses of user data by tech giants cropped all too frequently over the last decade and there had to be a way to balance blockchain functionality while safeguarding privacy.
But at the time, one didn’t exist.
We realized the world needed a blockchain platform that could be ready for mass market use. A chain that serves use cases requiring both public and private data. A chain which is legal, and thus complies with GDPR. A chain which can scale without costing a fortune. A chain that solves issues like energy consumption and network speed.
After closely examining the available solutions and after many discussions with our partner SAP that made similar observations from their clients, we decided that there wasn’t a single platform that met our needs.
However, this problem wasn’t unique to our team, any enterprise blockchain solution would eventually run up against these walls. So the Lition team got to work on a new blockchain platform, built to rise above the challenges facing the industry.
During this time our team expanded from 2 to 20, adding world-class talent across the board, including blockchain developers, marketing professionals and business experts.
By the fall, we had made rapid progress towards creating a blockchain platform built specifically for businesses’ needs. Costly Ethereum transactions were reduced from $0.50 to less than $0.01. Work began on a new, never before seen, public-private deletable blockchain infrastructure, allowing data to be deleted while maintaining decentralized blockchain integrity. Suddenly, blockchain and GDPR didn’t seem to be at odds with each other after all.
After months of late nights, hundreds of cups of coffee and dogged determination on the part of the entire team, we were ready to show the world our solution.
With a concrete vision and roadmap for bringing GDPR compliant blockchain to market, we doubled down on our development efforts and ramped up our marketing and business efforts, something many blockchain startups were all too happy to do before making any progress on their actual platforms.
Since Q2 Kyung and I were also focusing on obtaining partnerships and advisors to ensure the success of what had become a large undertaking. At Consensus in May in NYC, Thorsten Zube, then Head of Blockchain at SAP (now promoted to head all innovation activities) proudly announced our technology partnership with SAP, which gave us access to vital resources and a wealth of development knowledge. Soon after we jetted various times around Asia, making stops in Japan, China, Singapore and Korea and forging partnerships with industry leaders like the Korean Blockchain Association, Long Hash, LD Capital and Alpha Labs. In early 2019, we received backing from Microsoft as part of a startup accelerator program and were even asked in participated in blockchain research with Stanford University.
We also reached out beyond the energy space, forming partnerships with VR bank on a syndicated loan DApp and Tokeny to tokenize securities. Both cases depend on the Lition blockchain’s unique features to store both public and private data on-chain, while guaranteeing privacy and deletability.
The world began to take notice as well. Kyung and I found ourselves in a feature article in the Huffington Post. Our branding and design director, Chris Kilchling, was interviewed by Forbes about platform design philosophy. Hackernoon took a deep dive into our blockchain infrastructure. Our energy platform had taken off and was now serving customers in over 100 German cities. As the new year approached, we finally secured the expertise and exposure push our tech out into the wild for the first time.
Build. Build. And Build.
On February 21, 2019 our Testnet went live. Personally, this was a big moment. What started out as a blockchain energy startup just a year before morphed and grew by necessity into a better blockchain infrastructure on the verge of being deployed in countless industries. During this launch event at the SAP Data Space, we demonstrated publicly that data can be deleted from the Lition blockchain, while preserving unique blockchain features like immutability.
The Testnet, now reachable at http://bc1.lition.io allows developers to put our network through a trial by fire, making sure we backed up our wild ideas with viable tech. After the first stress test and ensuring our infrastructure is rock solid, we migrated our P2P energy dApp to the Lition blockchain and are constantly refining the network for more use-cases and greater stability.
When we first started out in January 2018, it seemed like every blockchain venture was rushing to beat regulation, make some quick cash before legal frameworks were clearly established for the industry. This strategy didn’t sit right with us.
If blockchain is truly going to be at the forefront of technological innovation in the coming years, cutting corners seems both careless and detrimental to the tech in the long run. Since mid-2018, Richard has worked closely with Thomas Heilmann, German Senator and Member of Parliament for Chancellor Angela Merkel’s team, helping to shape impending blockchain policy, primarily on security tokens.
Through involvement with the government, we’ve been able to share our knowledge with policy makers and lay the foundation for legislation that both fosters innovation and protects users and investors.
We believe the blockchain law will be passed by the senate before the end of this year, hopefully earlier.
As I mentioned earlier, we just concluded our ICO and reached the remaining $2 million to reach our hard cap within 18 minutes. This will help us improve the platform, build out new features, create dApps and uses cases such as Fintech and launch the network for widespread use with our technology partners.
Originally, I have to admit, the team was hesitant to conduct an ICO. Months and months of a bear market all but eliminated ICOs as a reliable fundraising option, but with mounting pressure from the community and a strong fundamental platform already built, we decided to take the chance. Especially a the ICO is a good method to distribute our tokens to a wide audience, that together with our staking consensus incentivize many, many nodes running the Lition blockchain.
During the ICO, we sold 39% of our tokens and collected $2 million from seed investors, $900k during the enterprise round and ~$2 million from the public sale through 558 contributors out of 62 countries. Our ICO breaks the trend as the most successful ICOs in the bear market, based on a review of all 45 ICOs listed on ICODrops.com in the last half year:
- Lition is the only project in the last 6 months that sold out its public sale within minutes.
- Lition raised the highest amount of capital during a public sale ICO in the last 5 months. Only one project claimed to raise more in their public sale (nOS), but there is no transparency on smart contracts making it impossible to verfiy.
- In the last 6 months only 10 of 45 projects went into public sale from which only 2 projects raised $2 million or more: Lition and nOS.
- Based on our token economy, Lition is now valued at ~$14.5 million
While our fundraising numbers were encouraging, we are equally proud of the global reach of contributors that believed in us.
Token buyers from 62 countries participated in the sale with an average contribution of $3,600, meaning LITION tokens are spread far and wide as intended. Too many ICOs have fallen victim to big whales investing lots of capital while crippling any attempt at decentralization. I’m happy to say Lition did not fall victim to this trend and is well on its way to bringing true decentralization to the enterprise blockchain world.
What’s next? Listing, Technology and more.
We’re sparing no time continuing our work post-ICO. Now, more than ever, we feel an obligation to our community and the industry to push forward. The next few months will see a whirlwind of activity as Lition token will be traded on exchanges, new use-cases being developed and legislative frameworks fall into place. Next week already, I’ll be a speaker in Blockchain: Seize Opportunities, an event by Angela Merkel’s party alongside politicians like the party’s chairman, Ralph Brinkhaus.
In parallel, we are strongly engaged in finding a professional, trustworthy and decent exchange for our token to be listed. Our good ICO and our media attention thereafter, including being the most successful ICO of the bear market, are strong arguments that facilitate our listing discussions. We have always said prior to the ICO that we will list in April (latest May), and we stand up to our promise.
Finally, we focus on delivering a platform worthy of the title: the blockchain standard for business. We’re committed to bringing uncompromised blockchain functionality to business world in a legally compliant and infinitely scalable package. This was a short outlook of our strategic business plan article to come out soon. Thank you for your support so far. I can’t wait to see what the future holds.
-Dr. Richard Lohwasser and Dr. Kyung-Hun Ha, the founders of Lition