Telegram AMA #2: Token Sale
Hosted by our CEO Christian Shearer, Chief Regeneration Officer Gregory Landua, and President of the Board Will Szal
On Thursday, October 17th, 2019 at 1pm Eastern time, we hosted our second #AskMeAnything in our Telegram channel. The following is a transcription from the morning’s chat.
Christian: Welcome to our second AMA, this time focused on our Private Token Sale! Gregory, Will, and I will be taking the next hour to answer any and all questions pertaining to this topic. Submit your most pressing questions about investor qualifications, token economics, market and value, etc. here. Looking forward to seeing your questions!
Q: Hi! Some blockchain use-cases are using stable coins (i.e DAI which use a crypto collateral) to tackle the day-to-day volatility and long-term holding of the native crypto; do you plan to use a stable coin? Or on the other hand, would inflation helps the land stewards and farmers? Farmers will need to withdraw some funds every month, at best in a not much volatile way 🙂
Gregory: This is a great question. We are intending to integrate with a stable coin project, with Terra and Kava being possibilities on the horizon. We are not currently including the development of a unique stable coin ourselves. In the future baskets of ecological assets could be bundles into a stable currency using our system…however, that is only after there are enough assets live on the system to bundle. To follow onto this and speek to the potential here: you can imagine a global index of ecological assets creating what amounts to be a global asset bundle that is highly liquid and has certain money-like charecteristics, but is itself more of a bundle of natural capital assets. However as noted, we are focused now on the business case of making ecological agreements and assets very easy to create and trade. To do that there is no immediate need for a stable coin perse because we can integrate with existing stable currencies to facilitate transactions between parties.
Q: What use cases for Regen Network are you most excited about?
Christian: I have a number of exciting use cases to share for that. The first one to mention is the work with Rainforest Foundation US, which helps create transparency between donors and the indigenous communities on the ground that are working to protect their forests.
The second case that I am currently most excited about is helping farmers create NFTs that relate to their positive ecological impact. Farmers grow more than potatoes; they grow clean water. They grow more than their corn; they grow carbon sequestration. They grow more than apple;, they grow biodiversity and habitat. We just launched a farmer signup to get farmers on our platform, and just in the last 6 days have over 160,000 acres signed up. If you know other farmers that want to be paid for impact, send them here: https://www.regen.network/farmers_signup. If we can make it easy for farmers to monetize their ecosystem service assets, this is a game changer for agriculture. Companies like Stripe, United AIrlines, Ford, Amazon, have all recently made climate commitments and we could provide a transparent, scientifically robust and fully auditable way for them to invest into agricultural impact. This is big!
Another great use-case is helping banking institutions understand the risk associated with the ecological regeneration (or degeneration) of the real-estate assets in their portfolios. This is a bottom line concern for banks, and if we can help them understand whether the land in their portfolios is getting healthier (and more likely to pay off the loans) or eroding away (and less likely to pay off the loans). That’s a big deal to them. And furthermore, we could then set up incentives to reduce interest rates for farmers who are proven to increase their resiliency over the life of the loan.
Gregory: The use case I am most excited about is the ability for any one to easily create agreements that account for and generate ecological assets. This makes it possible to businesses and countries to engage in meaningful climate action in a way that is custimizable for each participates.
Q: Why is this round private?
Will: Fundraising for crypto has been evolving in the past few years. A number of projects that raised funds through public ICOs have since run into legal issues. In order to stay fully compliant, this phase our our sale is a 506(c) Reg D in the US and Reg S internationally. This means that we can advertise our token sale publically, but investors need to meet the requirements for the sale of an unlisted security in the country where a participant is coming from. If you’re coming from the US, that means you need to be an accredited investor. If you’re participating internationally, you may need to be a sophisticated investor, or you may not have any accredited investor requirements in your country.
Q: If you make ecological agreements tradeable, I can see how that can be used for good. e.g. I fund a certain ecological improvement. But couldn’t it also be used for bad? e.g. I short the environment. Is that a risk you’re concerned about?
Gregory: Great question! First response: I think the risk of “shorting” ecological improvement is pretty low, as it offers the opportunity for investors to pick up more ecological assets at low cost, then work to ensure their long term value. “get in now” Shorting is a part of price discovery, so an asset being shorted represents a lack of investor confidence in the value of the asset: in the case of ecological assets their value is determined by 2 key characteristics. 1) is the on-the-ground reality and the likelihood that ecological outcomes with be stewarded into the future to maintain the asset value. 2) Is the accuracy and scientific rigor, and veracity of the claims about ecological state underpinning an asset. A short represents a lack of certainty about those two elements. Therefore, the market can be a force to improve both through this sort of signaling.
What I mean there is: shorts should be a healthy sign that drives innovation.
Q: Can you share some details about the token sale? How many investors do you have so far? Money raised? Tokens sold?
Christian: As of now we have sold just over $1,011,000 worth of tokens in this phase to 14 participants, making the average investment just over $72k each. Up to this point, I would say we really haven’t pushed the sale outside of our most supportive community, which is the Cosmos community. The first phase of the sale was really intended to reward those community members who are participating in helping us develop the chain. We are so excited to have 35 validators participating (or that have participated) in our incentivized test net. We would love for them to get in on Phase 1 and get the deepend discount. We do still have 7 million tokens available in this phase, but it is closing November 15, so please join us.
Now, with the markets where they are at, and the excitement about the release of IBC, we are now opening the sale up to the broader blockchain community, so please connect others that you think would be interested: https://www.regen.network/investors.html
Q: Is your token still called XRN?
Will: Yes it is! XRN signifies our native blockchain token on Regen Ledger. Our tokens are also called Regen.
Q: Regen needs external data (basically oracles) to verify ecological outcomes. What plans for oracles exist and how do you ensure that their data feeds are accurate / not manipulated?
Christian: Our science team has been doing some incredible work with remote sensing. It’s a great place for us to start, as it helps us ensure the validity of the data (as long as you trust the European Space Agency). Here are a couple of screen shots from Dr. Gisel Booman’s work, who leads our remote science team.
Gregory: Essentially our approach is to ensure all data used by someone making a claim can be audited. This enables each contract about an ecological agreement to be supported by cryptographically secure data associated with the claim. So the “oracle process” in our system starts with enabling existing data sources like in-field auditing, farmer data collection, and remote sensing to all be cryptographically signed. This, in turn, enables smart contracts to hold criteria for accepting the claim which can be as strict as needed. Furthermore, our architecture makes it possible to create strong correlative analysis. It is important to remember that there is really no way to have a binary trustless system. It is about making the scientific likelihood of a claim’s truth being transparent and available for the market so that investors and counter parties can price in the risks of inaccuracy or fraud into the value of an asset.
Q: I’m looking for how I can be helpful for Regen Network too! I really love this project.
Will: Given we’re doing this token sale AMA right now, spreading the word about it would be helpful, both in person and on socials! More long term — what are your passions, and what kind of participation would you like to have? You can alwyas get in touch with us directly at office@regen.network to further discuss.
Q: What is the token allocation for the sale?
Will: Here’s a visual on token allocations. That 32mm at the top represents the combined total of Phase I (12mm) and Phase II (20mm). Supply at mainnet launch will be 100 million tokens (meaning 1 million tokens represents 1% of the supply). Some unsold tokens may be burnt (details below). Numbers are given in million XRN.
35mm for Community Staking Pool and Regen Foundation — All of this allocation is staked permanently.
– Community governance staking model focused on Land Stewards, Science, and Developers
– Staking rewards will be managed to maintain at least 1/3 voting block power (Byzantine veto) in the long term.23mm Non-sale allocations
– 15mm Regen Network Development, Inc.
– 5mm Network Bootstrapping Fund
– 3mm ATOM-holder airdrop and work-lock w/KYC (Linear unlock over 3 years)Up to 4mm in a legally-compliant public offering $2.8mm at $0.70 ∗ Pending legal, tax, and exchange approval (Not locked)
Up to 32mm Pre-sale to community (current phase of sale)
- $9.5mm-18.4mm sold at $0.21–0.63
- All tokens locked for a minimum of one year
- Discount related to lock schedule
- At mainnet launch, any tokens reserved for the private sale not
yet sold will be burnt6mm Sold to investors in seed round
∗ Locked for varying lengths, deal by dealMore info available in our Whitepaper.
For the current sale, pricing is calculated based on unlock and phase of the sale. Longer unlock means lower price as it means that someone has a longer-term committment to the platform. Unlock has a one year cliff (in accordance with US laws regarding transfer of an unregistered security, just to be safe), and then linear unlock from that point forward.
Phase I -
3-year unlock: 21¢
2-year unlock: 35¢
1-year unlock: 49¢Phase II -
3-year unlock: 35¢
2-year unlock: 49¢
1-year unlock: 63¢
Q: What’s the timeline for the Regen Network launch?
Gregory: Regen Network is aiming to launch our live public mainnet by the end of Q1 2020. In the meantime, we have public testnets running and pilots around the world to build a large decentralized community around the network.
Q: What exactly does this token allow buyers to do? What are the options for participating in Regen Network?
Gregory: The Regen Network token ($XRN) allows a purchaser to participate in governing and securing the PoS blockchain backbone of our ecological data and claims ledger. In exchange for the work provided by a person who staked XRN on the network, an XRN staker earns block rewards and fees from the network including transaction fees. The XRN token is the security and governance token of our network.
Will: In our current stage of the sale, Phase I, we’re selling 12mm XRN (12% of supply at TGE if fully subscribed), of which we’ve sold a little over 5mm and have a little under 7mm remaining.
Christian: We have had a number of investors that have never invested in tokens before. It’s been really interesting to work with them to understand how that works, how it’s different from investing in equity and how they actually get exciting benefits that they wouldn’t necessarily get as an equity investor, like participation in governance. Most of them have approached us ready to support us in whatever way they can because they love what we are doing. I look forward to working with them over time to get them fluent in delegating, voting, and participating in incentive contracts for farmers!
Q: Can you talk a bit about the economics of XRN? What do you think will drive the value of the token in the long term?
Gregory: The long term value of the token will be correlated to the numb er and value of ecological assets and agreements living on the blockchain. For a more detailed analysis of XRN value and function please check out our technical Economics Paper.
Q: You guys are building on Cosmos-SDK but also adding a lot of technological innovations to the SDK. Can you talk about the main changes you are making?
Gregory: An example of an ecological agreement that generates value for XRN token holders is a contract between a municipal government and land-stewards to reduce runoff and drawdown carbon into the soil. This is a type of agreement that is not tradable. Another example is an NFT representing biodiversity. Biodiversity markets are just being born and represent an excellent new asset class. In many cases, a biodiversity credit will likely be collateralized. This increases the value by decreasing risk to an investor (the same is true in carbon markets). The value of contracts living on-chain must be secured by the value of the staking token. In this way the value of XRN is linked to the quality and quantity of ecological agreements, making it linked directly to the effectiveness of the platform in supporting ecological regeneration.
Will: The big changes we are making include improving key management, improving network upgradability, and bringing WASM smart contracts written in rust into the cosmos ecosystem.
Gregory: Although often overlooked, key management is perhaps the most important innovation we are undertaking. This is a deep protocol upgrade and will make life easier for users in the crypto space more generally. For instance, what we are building makes it possible to separate and delegate detailed permissions in the form of subkeys. This makes things like signing data to support a claim as a farmer or auditor easy without getting lost in having to pay gas or manage private keys. It also makes our DAO functionality and validator security superior to any other blockchain currently in existence (to our knowledge). Luckily for the world, all this functionality is being shared with the world as we are partnering with Interchain Foundation and Tendermint to ensure this functionality is part of the Cosmos SDK. If anyone is interested in seeing progress check out: The official Telegram channel for Cosmos Community Group on Key Management is here, and WASM is here.
Christian: We’ve come a long way from the initial meeting about this idea back in July of 2017, when we had a meeting in the Warsaw offices of Golem and mapped out the entire idea up on the whiteboard. At that point, we thought we would whip out a quick whitepaper laying out the idea and raise a quick $50mil (in 22 minutes). But alas, we weren’t satisfied with a “quick whitepaper” and feel there is too much at stake here to half-ass the theory.
In the end, despite having missed that ICO craze, I’m glad that we have gone down the track we have. Our design and product are so much more robust and have so much better fit with the imperatives that are being asked of us that would have been the case two years ago.
The program with The Nature Conservancy and Techstars has also really helped land the functionality of our SDK into the real world uses that these orgs have put in front of us.
Really exciting times, and I’m feeling more hopeful than ever!
Q: Are there projects you are already working on with the Nature Conservancy? Or projects that you are planning with them?
Christian: One of our aims with TNC in this program is to come out of here with a Pilot project. That has proven to be quite a bit more difficult than we thought, mostly because of their legal constraints. As you can imagine, they are a nonprofit, they now have an investment in our company (as part of the program), and so if they sign a deal with us, it has to be really picked through by their lawyers to make sure there isn’t a conflict of interest. But that being said, It looks like we are likely to work on a project in Southern Australia working with Indigenous people to restore degraded agriculture lands on over 300,000 acres! However, I must reiterate that this is not set in stone; these are hopefully ideas in the making.
Q: How are the funds managed and hosted? By Regen Foundation, which has a development contract with Regen?
Will: Tokens are being sold through our for-profit, Regen Network Development, Inc (RND). We’re currently planning on donating up to a third of token revenues to our non-profit, Regen Foundation. Currently pretty much all business has been run out of RND. It is risky from a tax perspective (due to potential charges of tax avoidance) for a non-profit to contract a related for-profit, so we will be avoiding that. As currently structured, work on dev and science is running out of RND, and work on decentralized governance will be living at the Foundation. In regard to treasury management, we keep the vast majority of funds raised in cash and a small minority in crypto so that we’re not overly exposed to market crashes.
Thank you all for your time and questions. Regen Network can use your support in making our token sale succeed by spreading the word. Please share this opportunity with anyone you think could be be a good fit.
We appreciate you!
