Lition AMA with Wolf Crypto
We held an AMA with Lition in our public Telegram channel on March 14th.
Lition is developing the only scalable public-private blockchain with deletable data features, made for commercial products. Designed with Lition’s live P2P trading use case, and co-innovated with SAP. Lition, in co-innovation with SAP, is a foundation that develops the next generation blockchain infrastructure designed for businesses to bring blockchain applications from their currently predominant Proof-of-Concept stage into commercial products with mass-market adoption in a legally compliant way.
The Lition infrastructure is the only scalable public-private blockchain with deletable data features. SAP, a company with >400.000 customers and the power of >10.000 developers, is developing the decentral ledger and smart contract layer, with Lition providing the open consensus layer.
Lition are holding an ICO on the 18th of March. You can visit the Lition Telegram channel or Lition website for further details.
Here’s what Lition CEO Dr Richard Lohwasser, Head Of Business Development Stephan Vogel, Marketing Manager Benni Wörpel and TGE Manager Alexander Bugaj had to say in the AMA.*
*This AMA has been edited for clarity.
WC (Wolf Crypto Telegram Member)
Welcome to another edition of Wolf Crypto AMA, this time with Lition.
Joining us from the Lition team is Lition CEO Dr Richard Lohwasser, Head Of Business Development Stephan Vogel, Marketing Manager Benni Wörpel and TGE Manager Alexander Bugaj.
Thanks for taking the time to speak to us today.
TEAM & TEAM GOALS
WC
Welcome guys, can you each please tell us a bit about yourself and what led you to being involved with Lition?
RL
Together with Kyung, I co-founded Lition about a year ago. Been an amazing ride so far.
We originally wanted to found an energy company, but then learnt how much opportunity lies in the blockchain technology. and how immature the technology is if you want to use it for commercial use cases.
When I was quite young (around 16/17), I founded an internet startup clanintern.de that worked quite well, we had 1m daily website views (top 10 of German internet back then). Later, I went to strategy company McKinsey & Company for 6 years. Afterwards, spent a few years in the energy industry, my last position was Managing Director of ExtraEnerie, a utility with ~$1bn of revenue.
But I tell you — startups are a lot better! So much less politics…
SV
I joined the company in the beginning of last year as employee #1 after having worked as an international management consultant, project manager and business developer for over 14 years.
AB
I’ve been ICO Researcher before and am hence investing frequently in those. At some point in time I stumbled across Lition since we’re both based in Germany and felt potential, so I joined onboard to support this amazing project. :)
BW
Good to meet you all here, I’m Benni and with the help of Stephan and Alex we are working hard on Lition’s marketing strategies. I’ve a B.A. in Science and Technology and a master’s degree in integrated natural resource management. My focus areas are renewable energy and methodology and modelling of sustainability and I participated in one of the first blockchain university courses at Humboldt University. I’m into crypto and blockchain since 2016 and since early 2018 a proud Lition Team member — I am very excited about Lition’s future ;)
WC
Can you give us a brief elevator pitch on Lition and what the project hopes to achieve?
SV
Lition is developing private sidechains with deletable data features on top of Ethereum in regards of GDPR compliance within the EU. Our vision is to bring Blockchain technology to commercial use. Already today with our live testnet, we run commercial use-cases on our solution that require regulatory certainty (especially in the EU).
Next to the proprietary layer 2 infrastructure which we co-innovated together with SAP, the world’s largest maker of business software, we have developed three use cases:
- P2P Energy Trading dApp that currently supplies customers in over 100 cities in Germany with electricity.
- Syndicated Loan dApp together with VR-Bank ($1 trillion assets) in MVP stage.
- Infrastructure Layer for Security Tokens that need to manage private data, in cooperation with Tokeny. Our pilot uses a $20m real estate loan.
WC
Lition has quite a large team, can you go into more detail regarding the backgrounds of whom you consider to be key team members?
AB
There are a few key members, let me point them out:
- Josef, our lead blockchain developer, was the mastermind behind DECENT, one of the blockchain pioneer companies. Together with Aliaksei, Ivan and especially Eugen they form the core tech team.
- Artur, who is leading the use cases together with Aliaksandr, started programming in the 5th grade. He envisioned the core logic behind the energy use case, and implemented it to bring it to customers in now over 100 cities.
- The marketing and dev team, with Stephan, Benni and Alex have been active in the ICO scene since 2017. They’ve privately invested into a cumulative number of over 40 different ICOs and therefore know the market very well. This was very helpful in taking a true community approach to the project.
- Richard, the CEO and Co-founder, holds a Ph.D. in energy economics and is an IT/blockchain specialist. At 15, he was fluent in 7 different programming languages. At 17, he developed and founded the startup Clanintern.de, a Top-10 website at that time in Germany, with 1 million views per day. He later had various industry positions at McKinsey and the energy giant Vattenfall.
- Kyung, the COO and co-founder has a strong management and IT background. He holds an MBA and Ph.D. in IT (Summa cum Laude). He has been a director for Online at Vattenfall, one of four leading multinational energy conglomerates in Germany with more than US$ 10 bn in sales. Currently, he is a senior director responsible for operations at GASAG, a US$ 1,4 bn leading energy supplier in Germany.
WC
How many developers are working on the project? Do you intend to hire further developers to deliver the project?
RL
We currently have 8 developers full time just working from Lition on the project, plus me and I dedicate a large portion of my time to development (you know…the nerd topic we had just earlier). The names and CVs of everyone is on our website.
On top we have about a handful of SAP developers, that work on the co-innovation topic. That team worked well for the testnet, but we might expand especially for the consensus logic (our testnet runs still on RAFT).
WC
What is the arrangement with the Lition development team and Instinctools?
AB
Due to the fact that our project requires quite some developer effort, we had to hire additional contract-based developers since in-house recruiting went slower than anticipated. This is why we partnered together with Instinctools which agreed to commit the capacity of those developers to 100% for Lition.
WC
On that note, how many of your team are active full time members?
AB
All 17 team members listed on our website and the two founders are full time.
WC
Dr Juergen Mueller, CTO of SAP is listed as a advisor, can you explain this relationship and what is he actually doing on the project?
SV
Jürgen has helped us with the Lition blockchain architecture, and is therefore also listed as an author on our technical whitepaper. He further has regular (at least bi-weekly) discussions with the team on their technology topics, and guides on all SAP-related topics.
WC
How is SAP “co-innovating” Lition? What does that actually mean?
SV
It means we’ve signed a contract to work together on bringing blockchains to mass market use. This is a common goal, based on our joint observations that today’s blockchain architectures do not support requirements of typical business use cases like managing both private and public data, legal compliance for data protection, transaction speeds, etc.
Lition made this experience through their energy use case, and SAP through various MVP projects they did together with their clients. In practice, it means our developers regularly meet to discuss how to bring this into technical reality. The work distribution is that Lition develops the public consensus system, while SAP is responsible for the private storage.
THE LITION NETWORK
WC
Before we get into the deeper details as to what the Lition blockchain actually does, what are some specific use cases for Lition?
AB
Lition provides an infrastructure environment that allows you to combine aspects of scalability and privacy while combining it with the security of an established public Blockchain such as Ethereum. Since commercial use-cases require compliance to GDPR within the EU, we also developed deletable data features in order for our solution to be regulatory compliant.
Our whitepaper details a dozen use cases, but let’s pick three we’ve already developed:
- P2P Energy Trading: Here you have public data (prices of producers), combined with private data (individual trades, meter numbers, billing address). Also, once the energy contract ends, the private data should be deleted.
- Syndicated Loans: Here we have public data, like a official approval of a bank, paired with probably the most private data there is: individual wealth in every level of detail. Also, smart contracts allow an easy, automated and safe distribution of funds and (interest) repayment.
- Infrastructure Layer for Security Tokens: Many legislations require an ownership register to be private. This cannot be done with pure public solutions currently available. Here, a private solution is needed, which can be verified anytime through the public, made possible through our mainchain.
WC
Do you have any publicly available demos for these use cases?
AB
Our P2P energy trading use-case is completely live. If you live in Germany you can register yourself for energy supply on our German webpage www.Lition.de. For everybody else, we have created a copy of it for demo purposes of the use-case which you will find under www.lition.io/p2p-platform. You will just need to login with the provided demo account and you will be able to enjoy the use-case in demo.
Username: demo
Password: demo1234
Our syndicated loan use-case is currently work in progress. We would nonetheless already like to share with you how far we have actually come. You will find a first demo version of it under: http://scripts.lition.de/syndicated-loan. Once we finish the whole use-case, we will communicate it through our channels. Once we have put syndicated loans on the blockchain, we will develop tokenized security as recently announced in our partnership with Tokeny.
WC
So how will an individual user sign up for the energy trading platform? Are there any requirements to do so or is it simple?
SV
If you live in Germany you can sign up at www.lition.de and get your energy via blockchain-technology from the power plant of your choice.
The sign up takes 5 min. and you only need your zip code, kWh consumption and your meter number. And we take care of the rest such as switching from your old energy provider to us. Once you are a customer you can “trade” buy energy or sell energy if your are a power plant. You can trade on a daily basis, if you wish to do so. However, most customer chose their power plants once and then only switch if they favor a different option.
WC
Will the energy trading platform be expanded to include users and energy providers outside of Germany?
SV
Yes, we will expand internationally. The P2P dApp was developed by Lition Technology and commercialized in Germany. In the next phase we will open up third-party energy providers in Europe and/or license out the technology to multinational utilities worldwide. We have strong partners in the utilities sector and of course SAP.
WC
How many other energy providers will be added to the energy trading platform?
SV
Many!!! Let us look back at what we have achieved in the past 12 month in order to project the future. We developed the use case in Q1/2018 i.e. we went commercially live in April 2018 and now we deliver energy to customers in over 100 German cities. With a growing customer base on the demand side, we also grow on the supply side. Meaning we connect further energy supplier/power plans. However, we still consider these first 12 month as a “soft market entry”.
We are scaling up right after our public sale. This means will we connect thousands of new clients on a monthly basis, power plants and expand with strategic partner internationally. Furthermore, we have further Energy dApps in the pipeline which we will pilot this year.
WC
How is the syndicate loan use case being supported? Who is backing it?
SV
For the syndicated loan use-case we are working together with two cooperatives of the German VR-Bank. A pilot project loan of $20 million is going to be hosted between those cooperatives and real estate development company.
WC
What other use cases do you see for the Lition chain in the future?
BW
Basically, every industry that needs to handle private and public data is well suited to use Lition’s chain such as enterprise data management, healthcare, pharmaceuticals, automotive, media, warehouse/logistics and so on.
We think that enterprise data management is a huge market in this regards, global data breaches will amount to USD 2.1 trillion by 2019. As data exchange between enterprises is necessary, privacy and security are more than crucial. The Lition blockchain offers privacy, security, and trusted data exchange. Decentralized data storage, limited availability of private data, and highly restricted access prevents continuous data theft and sabotage. Another hot industry is the healthcare, medical patient data is scattered and efforts to collect and settle insurance claims are high. With our blockchain solution, this sensitive data that is used for the claim process can be centrally stored on a private sidechain to which only doctor and insurance have access. After the claim, the patient can delete the data on the private sidechain, ensuring efficiency and privacy at all time.
We are also looking with high attention to the asset tokenization trend which is arising and for which our chain is ideal, we are building a platform which will make it easy for “everyone” to tokenize an asset through a few klicks, let say we aim to act as a facilitator. This is in line with our vision to bring blockchain to the masses, that don’t necessarily want to understand all the technical details behind it. We have all seen how internet, smartphones and computers conquered the market, when the user experience was ready for being easily used i.e. intuitive even for our parents, grandparents and now children, that’s our aim with blockchain.
WC
You mentioned that Lition has public and private chain architecture, can you explain how this is structured?
BW
Sure, Lition is developing a solution that assures data privacy while being permission-less. This is made possible by connecting a permissioned sidechain to a public mainchain. Basically a layer 2 solution that consists in permissioned nodes that run a privileged blockchain network, that becomes a sidechain once the mainnet sync happens.
The nodes will run the network with Lition Proof of Stake (LPoS) consensus algorithm, making it an extreme fast chain. Every n blocks or after a certain elapsed time, depending on the industry requirements, the side chain synchronize to the public mainnet. Only the hash of the last block is published and saved on the mainnet since it assures the integrity of all previous validated transactions. At the same time, an API is exposed so that public nodes have the opportunity to verify the integrity of a hash within a sidechain.
WC
What are the pros and cons for using Lition as as opposed to any other private/public chain?
RL
By observing the tech from a business perspective, what makes Lition’s chain unique is that every enterprise can use our chain in a fully compliant way. The feature to keep data private and also to delete them without losing blockchains core benefits is a big USP for Lition — In Europe for instance, when an enterprise manages third party’s data it has to be GDPR (privacy law) compliant, hence the only way to integrate blockchain into businesses are precisely those features that Lition is developing. That’s a big pro.
In practice, when talking to enterprises evaluating blockchain infrastructure solutions, a good technology is however only one part of the story. What now is even more important is that the technology is commercially proven, with real customers and real revenue. This is still quite rare. And additionally, large brand names tend to trust large brand names a lot more than statups. Here our strong partnerships help a lot and give credibility.
The cons of the Lition blockchain come when you have use cases that are purely public or purely private. In both cases, there are more efficient solutions available, such as Hyperledger or R3/Corda (purely private chains) or EOS (purely public).
WC
Can you go into further detail as to the importance of GDPR compliance in Europe and what this means for blockchain in general?
BW
Since the GDPR law has been passed, sensitive stored data by enterprises has to be deleted on request. This makes it highly difficult for a business to use Blockchain technology in combination with sensitive data since deletable data features are not possible on existing solutions, making their use illegal. Blockchain and deletable data features sound kind of paradox but the regulation is as it is and we are here to offer a solution for this problem.
WC
So as a layer 2 scaling solution built on top of Ethereum, can you give some insight as to why you chose Ethereum as the public chain?
RL
Since Ethereum is being one of the strongest public Blockchains in our opinion, we decided to complement it by building our layer 2 scaling solution on top of it. Ethereum is by far not perfect but the big developer community of it underlines for us that it has the biggest potential out of the existing solutions on market.
Most dApps run on the EVM, so migration to Lition is easy. We ourselves made that journey with the p2p energy dApp.
WC
So does this mean if the Ethereum chain has issue, Lition will also have issues? I’m thinking about CryptoKitties style network congestion.
BW
Good question, it’s rather difficult that this kind of congestions will affect Lition’s blockchain since the network is not syncing often to the public chain. It depends on the industry that uses our infrastructure. For example, for a municipality that will hold real-estate-ownership documents on our chain, it is enough that they sync to public chain once a day or even less. And what the side chain is syncing is not a complicated smart contract but only the hash of the last node.
It depends on the industry that uses our infrastructure. For example, for a municipality that will hold real-estate-ownership documents on our chain, it is enough that they sync to public chain once a day or even less. And what the side chain is syncing is not a complicated smart contract but only the hash of the last node.
So, to answer your question, it is very unlikely that Lition will have problems with the Ethereum network congestions like CryptoKitties. And even if, the sidechain integrity would still be intact, it’s just that it cannot be verified publicly. Further, once Ethereum migrates successfully to Proof of Stake, the chances to have such issues are close to zero.
RW
So true. We got many customer complaints in our initial energy use case. Image you buy energy, and then you don’t get an OK right away. It’s like buying something through PayPal and they tell you “hmm. note sure if you just bought that…hang on”.
That’s a no-go for commercial use cases and one of the reasons why we came up with our infrastructure by the way. We now have instant transaction confirmation…so cool!
WC
What consensus mechanism does Lition use?
RL
RAFT was quick and easy for us to implement, but it only works with private sidechains, not for public ones. It also doesn’t protect against byzantine nodes as they will de-sync the chain. To protect against this, we will move to PoS. Our team is working on it as we speak, but it’s mathematically quite difficult if you want to make it really robust. There is a reason why Ethereum has dozens of people working on it for months with no result yet.
We’re confident we can solve it though. also, SAP helps a lot. Actually, key components of our concept were provided by them. Our advisor Jürgen Müller, the CTO of SAP, gave us lots of input for our Proof of Stake system. He’s also a co-author of the Lition whitepaper.
WC
The Lition network includes staking and nodes, can you go into a bit more detail as to how these work?
RL
The core of PoS is still the same as we want to implement it. You vouch for correctness of your mined block with staked tokens. In return, you get a share of the gas associated with the transactions of the block. That’s phase 1 of our PoS that we’ll have in our testnet.
In the future, we want to extend it so that the validating nodes generate hashes of multiple outcomes based on different smart contract input parameters (more on this in our technical whitepaper).
WC
I’ve read in the whitepaper Lition intend to have a fully fledged dApp ecosystem. How are you going to incentive developers to build on Lition?
AB
We believe that developers always try to find the best technical solution. Our own observation from our Energy dApp was that there is currently no good solution out there for the requirements of commercial, real-life use cases.
That’s why we did the Lition blockchain — and we believe others will also see this, and choose Lition as their technology of choice.
Additionally, through active business development we are pushing more and more companies to use our infrastructure, and have allocated a dedicated segment of our tokens to incentivize use.
COMPETITORS
WC
Who are the main competitors to Lition?
AB
It is hard to precisely call on our competitors as we are having quite a broad scope that is addressed by few projects more narrowly. However, here are a few projects that enter our scope:
- LOOM (layer 2 solution but focused on games and plasma)
- RAIDEN (layer 2 solution but focused on payments)
- CELER (layer 2 solution but focused on off-chain transactions & smart contracts)
- POA (layer 2 solution but focused on interoperability)
WC
Why would an energy provider chose Lition over any of the other energy blockchain projects that are already released?
RL
Well, all other energy projects (Power Ledger, WePower, Electrify Asia) have good concepts and good technology, but their p2p solutions are all stuck in pilot stage (Power Ledger) or whitepaper stage (WePower, Electrify Asia).
Lition is the worldwide first to bring this to market. The benefits from a customer point of view are very low prices (compare yourself at lition.de, our energy website in German) and the ability to choose your power plant. That’s really tangible, even for non-blockchain people
As previously mentioned, we now have customers in over 100 cities. If you know someone in Germany, tell him to become a customer with us. It’s worth it! And of course every customer referral gets you the friends bonus.
WC
I loved the idea of Electrify Asia and their partnerships but sadly nothing has happened as yet.
RL
This doesn’t surprise us though. We also wanted to partner with the oligarch companies in the beginning but they don’t understand blockchain, so we were forced to found our own, independent energy company and just do. It is a pain as you need to go through the government licensing process, hire call center agents, etc, but it was the only way.
WC
Regarding Lition as a blockchain, what are the main points of difference between Lition and Hyperledger, Polkadot and other competitors?
AB
Hyperledger is a completely permissioned platform, not allowing for public and transparent transactions or token-based incentives. Polkadot is an interoperability project, trying to connect all kinds of Blockchains.
Thus, none of these competitors are really offering what Lition is developing, a mixed solution of public/private chains with deletable data features.
WC
Is Lition a competitor to LTO?
RL
Technically they might be, but the blockchain space is still very young. We believe it’s better to work together and make sure blockchain technologies are commercialized. Anyone with this objective is our friend.
Regarding a comparison and based on already previous community request from our community, we took a short look into our main differences and came up with 4 key differences:
1) Use cases. From an external view it seems like LTO is working on various use-cases like on transportation, UI-design or document notarization, but it seems they are either still under development in some aspects. This is different to Lition, with it’s p2p energy trading use case in now over 100 cities, and an MVP for VR bank, that has over $1 trillion assets. The energy use case already runs now on the Lition testnet, with a publicly accessible demo and open source code.
2) Technology. LTO is developing on its Waves fork whereas Lition is being built to work as a layer 2 scaling solution on top of Ethereum. By designing it this way, we were keen on leveraging Ethereum’s already existing strong security, easier use case migration and its big developer community. It also allows us to re-use proven and well working existing code and concentrate on features that differentiate us. Further LTO’s choice of PHP (a programming language designed for websites) for their blockchain, is very different to our choice of Go.
3) Partners. In the B2B space, partners are crucial for adoption as companies need trust. In this regard, our co-innovation agreement with the world’s largest maker of business software SAP, along with their board member and CTO as an advisor is a unique advantage. It’s not also helpful in terms of development but is also inheriting the potential exposure to SAP’s >400.000 business customers.
4) Wider scope. While both solutions provide a technology infrastructure, our scope is wider than LTO’s since we are also constructing a regulatory compliant environment for security tokenization. Similar with business development on the use case side, we make sure adoption is ensured by actively working with the Government on regulation.
TOKEN UTILITY
WC
What are the specific utility use cases for the LITION token?
BW
Primary token uses are payment for transactions (gas), staking and the operation of private sidechains by dApp developers.
WC
Can you explain how gas/transactions work on the Lition network and how these relate to Ethereum?
BW
The details are in the whitepaper, but let me explain more. In essence tokens are needed to pay for transactions, and to pay for the mainnet synchronization. As mainnet synchronization smart contracts are run on the Ethereum-mainnet, we convert Lition tokens to Ether using decentralized exchanges to pay for the gas.
The overall amount is small though, as updates are only needed periodically.
WC
Will Lition mint any further tokens in the future or is the supply fixed?
AB
There will be a unique scenario in which tokens will be minted for the public participants that will make use of the HODL Highway. It is important to understand that none of the previous investors nor team members will be eligible for this program, these tokens are only meant to go to those that support us during public sale.
Since we don’t anticipate much inflation from it, we designed it in a way that the appropriate bonus tokens are going to be minted once a participant decides to liquidate its bonus.
WC
The whitepaper states users/developers won’t be charged for creating a sidechain on Lition, but instead for storage on the sidechain. Has a peg been set for the cost of storage?
RL
That’s currently difficult to answer since we don’t know if this draft will still work as planned. We initially planned to charge for storage but now believe it makes more sense to charge for mainnet synchronization. This is also the current implementation in our testnet.
WC
Is there any inflation on the Lition network?
AB
Yes, but only as a one-time thing due to the HODL Highway.
In order to give a fair estimation of how much this might be let’s assume the following:
Half of the public sale participants decide to hold on to their tokens for 6 months and receive afterwards the full 25% of bonus. Should this be the case 2,500,000 tokens (10,000,000 * 0,25) would have to be minted which would result in a corresponding inflation of 1.72% (147,500,000/145,000,000).
We further hardcoded a token limit into the minting function, assuming every public sale participant receives the full 25% bonus. This means there will never be more tokens. We are also auditing our smart contract through a third party security agency as we speak.
Under consideration of the fact that our Proof of Stake is not based on annual token inflation as it is common with other projects such as Tezos (5%), EOS (5%) etc. but rather on rewards that come from transactions, We think that the above outlined onetime happening token dilution of 1.72% is something that can be beared, especially under consideration that those tokens go into your hands.
PARTNERSHIPS & EXCHANGES
WC
Can you please go into detail regarding your partnership with SAP? It seems many other projects, like Hyperledger, Quorum and Multichain also have partnerships with SAP, what makes your partnership different?
RL
These 3 “partnerships” are limited to SAP using these publicly available chains and running nodes of them on their servers. Development is limited to customizing deployment, but not to proprietary, new code. Our partnership is a lot deeper, as outlined earlier.
WC
GASAG is another major partner of Lition. I see Dr Kyung-Hun Ha is still an employee there. Is this a real partnership or one just for name’s sake?
RL
Initially, GASAG sent Kyung to support Lition with his energy, marketing and sales know-how. Now Kyung works (close to) full time for Lition.
BW
The GASAG cooperation consists of three areas —
- Renewable GASAG power plants are available in the p2p energy trading use case, and are currently being bought by energy customers
- GASAG does customer service for Lition energy customers (call center, etc.)
- And finally, financial investment
WC
You recently announced a partnership with VR Bank. The partnership announcement states Lition is “is working together with two cooperatives of the German VR Bank”. So this partnership is not with the bank itself but instead with two subsidiaries?
AB
As the VR Bank is a cooperative bank, technology innovation first go through trials on a small scale with individual branches, prior to a large scale roll out. We follow the same approach, and therefore have the contract with two branches (not subsidiaries).
WC
Getting legit banking partners would be pretty cool!
SV
VR Bank is as legit as it gets!
RL
Yeah. It’s a pain in the ass though. so many meetings, so many negotiations, so many non-blockchain people to convince.
They haven’t reached the blockchain age yet. At least in their mind, that’s what we see over and over.
WC
Who are ADVISUM and what is their involvement in the project?
BW
ADVISUM is a seed investor, and closely supports the team in many areas. ADVISUM has invested over $1 billion in over 100 companies. They also offer valuable contacts into traditional enterprises.
WC
Will Lition be announcing any further partnerships prior to the public sale?
AB
Stay tuned! There might be something 😉
SV
In the pipeline…
WC
Can you give any details on exchange listings? I am worried the token won’t be listed soon after the ICO (Sparkster anyone?)
AB
We cannot comment on exchanges at the moment but we are aiming for listing in April. I highly recommend you to read our token sale medium article, everything is easily summarized in there.
ICO & TOKEN SUPPLY
WC
What is the hardcap for Lition and Is it pegged to ETH or USD?
SV
As of now we have raised $2.9 million and are looking forward to raise another $2 million in our public round (pegged to USD).
The initial hard cap was set at $8 million but due to token burns it decreased to $4.9 million.
WC
What is the date of the public sale and how will it be run?
AB
It will start on Monday the 18th for whitelist participants only. Then on the 21st we’ll have a round for the general public.
Round 1:
- $0.5m USD cap
- 48 hour duration (18.03–20.03) starts at 3 pm (CET)
- Only for whitelisted participants
- Individual cap $25k USD (250k tokens)
- 7% for first 24 hours, 6% for last 24 hours
Round 2:
- $1.5m USD cap
- 120 hour duration (21.03–26.03) starts at 3 pm (CET)
- Open for the general public
- Individual cap $100k USD (1000k tokens)
- 4% bonus initially — being reduced each day by 1%
You will be able to contribute through our website www.lition.io with BTC or ETH. A detailed how to contribute guide can be found on our token sale page.
WC
How much was raised in seed and what is seed bonus/discount?
AB
From our seed investors we raised $2M USD (soft cap reached) for a price of $0.07 USD. Our seed investors are LD Capital, Longhash, Alphalabs and Advisum. The seed bonus was 40%.
WC
What is the lock period on seed?
AB
The full overview, including lockup of other categories is in the following medium post —
WC
I have seen that you recently announced that you have raised 0.9 million on private which is very good. Congrats on this, as I know there were no bonuses provided and there were even lockups, so the terms were less favorable than for crowdsale participants. May you share the light on the motivation of private investors to support your project, it must be really interesting for those who are planning to participate in crowdsale?
AB
We did not conduct a private sale. We did an enterprise sale in which tokens are being vested linearly over 4 months with first release 3 months after TGE. Just like seed lock up. This tier is chosen by companies using the Lition blockchain infrastructure for their use cases, as they get exclusive developer and testnet access, instead of bonus tokens. In it, we raised 0.9m, further detailed in the following medium post
Enterprises that decided to invest into us were offered a collaboration opportunity to develop an industry speciifc use-case together with us. Think of VR-Bank were we developed the syndicated-loan use-case. Some more news will come soon.
WC
Is there a bonus/discount for the private sale?
AB
0% bonus.
WC
What is the percentage of tokens available to the public?
AB
20,000,000/145,000,000 = 13,79%.
WC
Can you explain the Lition HODL Highway in more detail?
AB
The HODL Highway is a bonus program for public participants that rewards token holding. You can receive a bonus of up to 25% for holding our token for the duration of six months. All you have to do is just not to move the tokens away from the initial wallet that has participated in the sale. Bonus is then added on daily granularity and once you move the tokens away is going to be transferred accordingly onto your wallet.
Here is an example:
In case you hold your tokens after TGE for 50 days but now decide to move all of them off the wallet, you will receive bonus tokens of approx. 7% (50/180*25%) after you have transferred your initial tokens away. As a consequence, you will no longer be eligible to receive further bSureonus tokens in the future.
In case you decide to transfer only a partial amount of your initial tokens, the bonus payout will apply to these tokens if you held on for a certain amount of time. The other part that has not been moved from the wallet will stay eligible for further bonus payouts.
In case you are interested in reading more, take a look here.
WC
Why are you minting new tokens for this instead of taking tokens from the existing supply?
AB
The overall expected inflation due to this is less than 2%. As this amount is marginal, we went for the solution that is technically easier to develop from a smart contract point of view.
WC
Does this mean the Lition team can mint more tokens in the future and further dilute the token supply?
AB
No. Minting is capped at the theoretical maximum HODL premium, assuming every public sale participant holds on for 6 months.
WC
How does the Guaranteed Refund program work?
AB
You can voluntarily opt into the refund program but you’ll need to keep your tokens for 6 months without transferring them from the wallet that has been used in the public sale. By doing so, you show commitment to us which we reward with the opportunity to get 50% of your contributed funds back in DAI.
When you choose in favor of the refund program, you however drop out of the HODL Highway. So choose wisely.
If you’re curious about this you can find more information here.
WC
Why did you choose DAI over other stable coins?
AB
The Maker ecosystem and its native DAI coin came online and proved that they still work even though the market has been declining since more than 400 days.
We could have chosen USD pegged stablecoins as well but FIAT backed stablecoins are not really what we want to facilitate.
WC
When will the smart contract/eth address for the refund program be published?
RL
See —
There might be some last-minute fixes though (an external security audit company is doing their last fixes).
The ETH addresses will be available once deployed, so shortly before round one of the public sale.
WC
A fair amount of tokens have been allocated to ecosystem development funds. What assurance can Lition give that these tokens won’t be dumped on an exchange?
AB
Those tokens are mainly for pilot projects, business development and to incentivize developers and usage of our blockchain. A blockchain is only as good as it’s organic use, which we will actively encourage.
WC
Will unsold private/public sale tokens be burnt?
AB
YES!
WC
Do you have any projection as to what will be the initial circulating supply before seed/private and team/advisor tokens unlock?
AB
The circulating supply will stay at 26,762,500 tokens (in case public sells out) for exactly 89 days. Therefore in percentages the circulating supply will amount up to 18.45%.
ROADMAP & FUTURE GROWTH
WC
Has testnet been released? Is this publicly accessible?
RL
Yes, through our block explorer it is possible to already now explore transactions. You can go to demo.lition.de (user: demo, password: demo1234), and start trading energy.
If you click on the transaction hashes, you can see the underlying transaction on the Lition testnet.
The underlying 11 nodes on the private testnet sidechain are bc1.lition.io — bc11.lition.io.
WC
Lition has scheduled mainnet for Q2/Q3 2019. How achievable is this and how does funding or lack thereof from the ICO affect this?
RL
As we’ve reached our softcap and we just had our enterprise (private) sale round, the mainnet funding is secured. that our testnet is launched also gives us more security that the timelines are realistic.
Actually the testnet is already stable enough that we’ve migrated our energy use case to it last week. so our energy customers already now do their p2p trades over our testnet.
WC
Users are already trading energy on the testnet?
RL
Yes. Real energy.
You can become a customer yourself if you live in Germany, and do the transactions yourself now. I know it’s a bit unusual to put real customers with business revenues on a testnet, but we’re comfortable enough with it now (and Ethereum gas fees were killing us…).
WC
How many customers are currently using the platform?
RL
Back in November we had 700 in 30 cities. we now have > 100 cities (101 to be exact).
WC
Lition has included STO’s on the roadmap. Is Lition compliant to host STO’s?
WC
What do your expect will be the biggest challenges for Lition post ICO?
BW
Staying focused, meaning that we need to make sure that we don’t get lost in the vast amount of opportunities that are now presented to us. We are developing a blockchain- infrastructure which can be potentially used for infinite business solutions. We want to exploit them, but have to learn that we don’t necessarily have to do or should do them all our own.
Together with our technology partner SAP we intend to disrupt cross industry, but we can also do that by ‘just’ providing the infrastructure or by licensing out the IP of a dAPP. What we have done in the energy sector is very exciting and presents incredible opportunities that we will continue to exploit in Germany and beyond. However, even in the energy sector, we don’t have to do it all. Just consider international expansion and / or diversification we might be better off in some cases to find strategic partners.
WC
What do you view as the potential barriers to the success of the project?
BW
Well, we strongly believe that if there are any barriers, they are mostly external factors such as the overall crypto market evolution — at the time of writing the market confidence is still low, although in the last couple of months we’ve seen some positive signs. The ongoing loss of interest in the technology could lead to a significant delay in mass adoption.
However, being Lition B2B and B2C oriented, this threat is not seen as very significant, as the main token purpose and thus demand lies in organic, business-driven transactions and not speculation. Other external threats are direct technology competitors that are challenging the dominance of blockchain as new “revolutionary” medium. Two good examples are distributed hash table (DHT) and directed acylic graph (DAG). We are still in an early stage of those technologies and this can lead to data protection issues, hacks and thus negative public perception. This, in turn, will hinder mass market adoption.
WC
How aggressive will Lition’s go to market strategy be?
BW
Let’s put it this way, we won’t be shy ;-) As we focus on enterprises and mass market adoption we not trying to tackle niche markets. Lition’s go-to-market strategy is focused on business benefits, technical advantages to be regarded as a trustworthy, mature commercial partner, that provides technology that is fully legally compliant, such as GDPR. This is a competitive advantage and we can already see strong demand from B2B and B2C.
We would not feel comfortable to make very ambitious projections. So far, we have “underpromised and overdelivered” and we work hard to continue to communicate and deliver that way. This is very different to the “loud”, pure-technology driven marketing strategy often seen from 2017/2018 blockchain startups.
DUE DILIGENCE CHECKS
WC
Treasury management is something ICO’s seem to be really bad at. How will Lition ensure investor funds are protected and Lition will have enough money to successful deliver the project?
AB
We will liquidate funds besides those that are required for refund program. Our CEO is not a big gambler!
WC
Where is Lition officially based?
SV
Lition Energy is based in Berlin Germany, Energy blockchain capital of the world 😉
AB
We are incorporated in Vaduz, Liechtenstein but we are operating out of Berlin, Germany. If you’re nearby, feel free to visit our office. :)
WC
Do you have a publicly available Github?
BW
While the current testnet works, it requires a lot of custom configuration to set up a sidechain. if we’d release it now we’d spent a lot of time troubleshooting and explaining. Once our documentation and deployment scripts are ready, and the testnet is a bit more mature it’s the right time to publish the code. This will for sure happen. the best ideas usually don’t come by yourself…
RL
The energy use case code with the smart contracts is published though.
WC
Had the code behind Lition been peer reviewed?
AB
Our smart contracts are externally audited as we speak, with the results being published prior to the ICO.
The code for our commercial use cases is public and thus open for public and peer review. Our testnet is still under development, and once we’re at a maturity stage in which we believe it makes sense to obtain feedback, we will publish it and also obtain peer review.
WC
Revenue for ICO’s has been a constant topic of conversation in 2018/19 as ICO’s run out of money and runway…How does Lition intend to generate ongoing revenue past the crowdsale and value of team tokens?
AB
We have a dedicated chapter on this in our whitepaper, but mainly by licensing out the proprietary IP of the use cases.
WC
What is the vesting periods on team and advisor tokens?
AB
Team: After 180–720 days, each 180 days 25% unlock
Advisor: After 90–180 days, each 30 days 25% unlock
It’s all in here…
WC
Can you provide further details on recognition by the Liechtenstein government that LITION is a utility token?
AB
We are in possession of a legal opinion of our lawyer as well as an approval from the financial authorities in Liechtenstein. We can share these documents on request.
CLOSING THOUGHTS
WC
Thank you the Lition guys for answering our questions today. It’s been an epic AMA! If there are no other questions we’ll leave it here for today.
SV
Thanks guys — very well organized!
AB
Guys thanks a lot for being here!
BW
Thanks, looking forward to reading the summary.
RL
Let us maybe end by saying a bit about our belief. We believe that blockchains really need to be brought to the mass market. To bring real business benefits. Only then we’ll escape the immaturity often experienced today — a bit like the internet in 1993.
Technology is important, and we saw many purely technology (and marketing) focused blockchain startups in 2017/2018. But now the market has grown up. To venture into mainstream use. With real customers, real companies, and real revenue. This is 2019, and we believe this is the time of enterprise projects.
Lition Resources
Website: http://www.lition.io
Telegram: https://t.me/LitionEnergy
Github: https://github.com/lition-blockchain
Medium: https://medium.com/lition-blog
Whitepaper: http://www.lition.io/docs/Lition_Whitepaper.pdf
Technical Whitepaper: http://www.lition.io/docs/Lition_TechnicalWhitePaper.pdf
Wolf Crypto Resources
Public Group: https://t.me/WolfCryptoPub
News Channel: https://t.me/WolfCryptoAnnounce
Twitter: https://twitter.com/WolfCryptoGroup
