SophiaTX Fundamental Analysis

Published in

The Sandor Report

6 min readApr 17, 2018

SophiaTX is a platform and application marketplace integrating blockchain technology into SAP and other ERPs. It helps enterprises harness the power of blockchain without changing their existing systems.

TLDR: Why SophiaTX?

SophiaTX checks most of the boxes listed in my previous article:

They have a multibillion-dollar real-world use case: integrating blockchain technology with enterprise management software like SAP and Oracle. They tap into an insanely big market.
While they don’t have a working product yet, they are ahead of their schedule by months, and they are very close to launching the key features of SophiaTX.
In the last few months they started a pilot project in automotive supply chain management with Ernst & Young; a pharma track & trace logistics pilot with the Saudi arm of KITA Logistics; and announced a partnership with Biotron, a personal data analytics firm.
The team is exceptionally qualified for this project. Most of the members have a strong SAP background, either in development or consulting. The advisory board is similarly great. On the other hand, I’d love to see dedicated staff for developer relations and marketing.

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Project background

Equidato Technologies AG, the entity behind SophiaTX, is a company focusing on the integration of blockchain with enterprise applications, such as SAP, IoT sensors, smart printing, and other advanced technologies. SAP is one of the largest vendors of ERP (Enterprise Resource Planning). According to its 2016 corporate fact sheet, SAP serves more than 335,000 customers in 190 countries. It’s estimated that 75% of all global business transactions come in contact with an SAP system. (1)

Equidato has launched a project to build SophiaTX, the world’s first open source blockchain platform to integrate blockchain technology with enterprise applications. The SophiaTX platform provides a set of tools allowing developers to build and publish applications which utilize the power of the blockchain and distributed data integrated with ERP and CRM solutions (Customer Relationship Management). Developers publish apps in the marketplace, which are accessible to both businesses and the end user community who purchase applications that integrate with their systems. Developers earn revenue from apps which are downloaded and deployed. (2)

SophiaTX provides flexibility and allows accelerated adoption by end users via standardized building blocks, process flows and use case designs. The platform provides various learning, development, and deployment tools for the entire community including:

Use case design, process flows, business scenarios;
Integrated development environment (SDK and API);
Advanced encryption capabilities for protecting information held by 3rd parties;
End-to-end solution builder for business with no requirement to understand the inner workings of the blockchain.

SophiaTX has been organizing meetups, training, and learning programs to bring the blockchain community closer to the business.

SophiaTX intro video

Use cases

The platform provides common building blocks for use cases across all modules of ERP, SCM, and CRM systems to adopt blockchain into enterprise applications space. There are three basic categories of use cases:

One-to-One Document Exchange

Sending a business document over blockchain in such a way that both the sending and receiving party properly acknowledge the transaction. This case applies to documents such as invoices, purchase orders, quality inspections, work orders, etc.

Multi-Party Information Exchange

A collaboration of multiple parties is required with objectives of a common and well-aligned goal. The use of blockchain allows a transparent and efficient exchange of information, and at the same time, it provides the transparency required for a fair and trusted award of bonuses and penalties related to overall performance.

Multi-Party Collaboration Across Value Chain — Track and Trace

Information traveling from the beginning to the end so that it allows full transparency from the manufacturer to the end consumer. For instance, track and trace for pharmaceuticals, food, luxury goods and industrial spare parts.

Tech highlights

Transactions are stored in an encrypted format on the public SophiaTX Blockchain. It is based on the DECENT protocol, utilizing Delegated Proof of Stake (DPoS). The SophiaTX blockchain is public by default, as this approach addresses the entire value chain allowing businesses of all sizes to participate and collaborate. That said, SophiaTX is ready to ship private blockchain solutions to clients if needed.

DPoS allows handling and processing of large volumes of transactions, but it’s not the most decentralized solution. Considering it’s an enterprise blockchain, it seems to be a reasonable choice for me.

SophiaTX currently runs on a testnet; the mainnet should be launched in May. The project is ahead of schedule by almost two months, always a good sign. The SAP SDK comes out in Q3, and Q4 will see the launch of the web client and the mobile app, as well as IoT integration. The latter is a potential game-changer in supply chain logistics; I wouldn’t be surprised if they prioritize this feature considering the recent pilot projects (automotive supply chain pilot with Ernst & Young).

Another key milestone is the launch of the developer platform and the Marketplace, both scheduled to Q2-Q3. Applications can be developed in Java and .NET.

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Use of SophiaTX Token

Once the SophiaTX blockchain is fully launched, it will utilize its own proprietary token SPHTX. The token will have multiple uses on the blockchain, within the marketplace and will also be included as a utility token in decentralized applications (Dapps):

Transaction fee and reward for miners validating transactions and blocks on the blockchain.
Subscription to access rights to the development platform and marketplace.
Reward allocation for buying and selling of assets in the marketplace (App Store and Dev Store).
Reward for the developers when an end customer installs and uses a SophiaTX Application (Dapp license).
Transaction and data storage fee for document file server.
Licensing for private Blockchain.

Token distribution

35%: Development, Operations, Marketing, Team
30%: SPHTX Token Generation Event
30%: Mining (25 years)
5%: Future Token Generation Event

Company & Team

SophiaTX, formed by Equidato in early 2017, is a joint venture between Decent and Venaco Group. (3)

Decent

DECENT is a blockchain-based digital media distribution platform designed to bring more transparency and fairness to the media industry. DECENT allows artists to efficiently distribute any form of content online. (4)

Venaco Group

Venaco Group provides independent SAP advisory, implementation, and innovation services globally. It is a professional services firm with a focus on complex SAP and IT technology topics. The team has gained experience working with leading consulting firms incl. Accenture, Deloitte, EY, IBM, McKinsey, and others. They have delivered work for leading companies in more than 40 countries. (5)

Chief Executive Officer

Jaroslav Kacina, Senior Vice President at McKinsey & Co, Vice President for global SAP Business transformation program at Alstom. Worked at Ernst & Young and Deloitte for ten years. (6)

Chief Technology Officer

Martyn Harler, Founded Octocloud, a Swiss-based solution providing SAP Business One cloud on HANA. Worked at Alstom AG in Switzerland, as the technical architect and manager. (7)

Other team members

The majority of the team has an SAP background, either on the development or business side. Many of them are Alstom alumni.

Advisors

SophiaTX has an incredibly strong advisory board with senior executives from GE, Vodafone, ABB and Saudi Telecom. The Decent team is also represented.

Roadmap

The latest AMA (April 12)

More information

Sources

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I am not a financial advisor. My articles reflect my own personal views. Do your own research and invest wisely.