As those of you who follow MaidSafe’s progress will know, 2016 has been a very productive year so far. Further to the successful test of the SAFE Client in February, and the iterative series of network tests that have taken place since, progress has been visible to all close to the project. Making a stable droplet network available for app developers last week is another positive step and provides a platform for developers to start coding apps against. To increase the speed of momentum in development, and to ramp up network promotion the company needs more resources, and we now turn our attention to our short term funding.
To enable us to grow SAFE as aggressively as possible the decision has been made to make best use of the 24 million MaidSafeCoins that the MaidSafe Foundation currently holds. The Foundation has these MaidSafeCoins as a result of a technical issue with the Master Protocol (now Omni protocol) that resulted in an over issuance during the crowdsale. These coins are, and have been, calculated as part of the safecoin market capitalisation, though they have not been put into circulation. The existence of these MaidSafeCoins has been known about since the crowdsale, and what to do with them has been discussed amongst the broader community on the SAFE Network forum. Various proposals have been made, including sending them to a burn address and thus destroying them, using them to seed the network, and so forth. Until now it was unclear how to deal with the situation to best effect for the project and the community.
- The MaidSafe Foundation will advance these 24million coins to MaidSafe.
- The sale of 19 million of these will be conducted sensitively over a period of time to minimise the impact on price.
- MaidSafe will use the proceeds to further invest in the SAFE Network, drive community engagement and support developers.
- 5,000,000 of these coins will go directly to bounties, community projects related to launch, PR, branding, marketing and outreach programs.
- After safecoin goes live, MaidSafe will prioritise paying back the the 24 million safecoins from MaidSafe’s own core development awards. MaidSafe will be able to prove this cryptographically.
- For the avoidance of any doubt, 100% of the proceeds from this strategic sale will go toward furthering SAFE and will be reinvested entirely straight back into the community.
Why is this Needed?
Those that have been involved with the SAFE Network since the days of the crowdsale will know that while the sale was very successful from a community-participation perspective, it was less so from a funding standpoint and didn’t give MaidSafe the necessary resources to fully accelerate development. The anticipated $8 million (£5.5m) and 3 years of running costs actually equated to $2 million (£1.4m) with the crash in the mastercoin price and fall in bitcoin price taken into account since that time. This information is available in Maidsafe company accounts as filed at Companies House in Edinburgh. Some of the dynamics of all this were chronicled at the time in an article by Adam B. Levine, entitled MaidSafe: A Wildly Successful Cryptocoin Debacle, which is recommended reading for anyone who wishes to get a balanced picture of what happened and why it was problematic.
While very careful financial management, through limiting expenditures and growth, has enabled the team to squeeze over 2 years from the funds, the lack of sufficient financing has restricted our ability to scale the team and consequently has extended the anticipated development timescales. This is an area we now hope to build quickly as we have developer job applications at an advanced stage and we feel the technology now needs to be accelerated. The recent tests allow us to begin creating a plethora of demo apps and increase API awareness for third party developers. We do anticipate spending time with developers in outreach programs and developer awareness events. This is also the time to increase substantially marketing and PR activities.
With development progress now plain to see, we have been turning our attention to raising additional funding in recent months. We have explored and continue to proceed with a couple of avenues that include EU Research funding and both institutional (.i.e. venture capital) and crowd equity investment . While we do see the potential value of finding the right institutional partner who can also bring technology partners to the table, economic uncertainty is reaching the venture capital markets resulting in lower company valuations and slower deal cycles.
With all this taken into account we believe it makes better sense for the community as a whole for MaidSafe to use a funding source that is close at hand, and one that keeps MaidSafe completely independent, with the ability to freely negotiate with the correct partners as we progress the launch of the network.
Use and Repayment
The funds will be used to:
- Accelerate the ongoing development of the network.
- Support the development of third party applications.
- Raise awareness of the network amongst potential end users.
MaidSafe will repay these coins directly by reducing our core development reward. In essence, MaidSafe are proposing an advance against the core developer reward, which will be used exclusively to further the network.
Through hard work as well as prudent, public and conservative financial handling, and support of an incredible community, the SAFE Network’s functionality has been demonstrated through the public tests and we remain very excited about the potential of the technology. The funding raised by this solution will allow the fastest, most effective means of fully launching the network, while retaining full administration of the project in the hands of those who have proven their dedication to carry it through.
Thank you once again.
This and other topics were discussed on the SAFE Crossroads podcast hosted by John Ferguson. The podcast is available on Soundcloud.