Golem Token Sale (ICO): The World Supercomputer - Smith + Crown

Golem Token Sale (ICO): The World Supercomputer

Golem aims to build a decentralized market for computation using individuals computers: the foundation of a decentralized web in which everyone's machines supplies all the necessary computation power for network activities.

Update: Golem’s ICO is over. It raised 820,000 ETH (roughly $8.6 million) in a couple hours.

Note: Golem’s ICO starts at ETH block 2607800. Instructions on participation here.

Check out Smith+Crown’s analysis of Golem.

Golem is a platform built on a peer-to-peer network which sources computing infrastructure in a decentralized manner to create a global market for computation. It is called the “worldwide supercomputer,” to which anyone can contribute and from which anyone can buy computation. The network is secured by the Ethereum blockchain, facilitating a system of direct and transparent payments between the ecosystem’s three user groups:

  1. Requesters demanding computing resources
  2. Providers supplying hardware infrastructure
  3. Software developers creating applications which enable utilization of network resources.
Source: Golem Whitepaper

Today, the cloud computing space is dominated by giants including Amazon, Microsoft and IBM, resulting in pricing inefficiencies characteristic of oligopolistic markets. Golem’s computing market aims to disrupt this and drive the cost of cloud computation closer to the cost of producing it, making complex applications such as computer-generated imagery (CGI) rendering, big data analytics, and machine learning more accessible.

The platform will also provide value in the form of an Application Registry which enables anyone to deploy software to the network, along with a Transaction Framework which provides flexibility in the way such software is monetized. These applications could serve to route computation tasks, enable redundancies, or assist with data security–similar to the services the cloud providers offer in addition to the raw computation power. Together, these two components aim to create an environment conducive to rapid, community-driven innovation. Golem hopes that in the long run, centralized providers will utilize the network to adopt and pass on the aforementioned efficiencies to their customers.

What is the token being sold?

The Golem Network Token (GNT) is an Ethereum-based token which acts as an exclusive medium of exchange between Golem ecosystem participants i.e. it is used by requesters to compensate providers and software developers for resource and application usage respectively. GNT will also be necessary for other processes involving the Application Registry and Transaction Framework once they are implemented. One such example would be the submission of deposits by software developers during the process of software validation and certification.

What would cause GNT to increase in value?

GNT does not entitle holders to a percentage of network transaction fees, as there are none, and token supply will be fixed at the conclusion of the crowdfunding period. Accordingly, the long-term value of GNT will depend on network turnover and transaction frequency. Increases in network utility will be the primary driver of these two key metrics, which in turn depends on the completion of development milestones by the Golem team, the success of their go-to-market strategies for each milestone, as well as the quality and diversity of future Golem-based applications. We will discuss this in greater detail in a follow-up post.

What are the terms?

The pricing of GNT is denominated in Ether (ETH), with 1000 GNT created for every 1 ETH contributed. There are also minimum and maximum funding caps of 150,000 ETH and 820,000 ETH respectively, with a further 18% fixed-rate pre-allocation of tokens for developer endowment.Accordingly, there is a theoretical maximum of 1,000,000,000 tokens representing a market cap just shy of $10 million at today’s ETH price (~$12).

To participate, investors must send ETH to the designated crowdfunding contract address. Your address will be immediately credited with GNT, however tokens will only become transferable at the end of the crowdfunding period.

At time of writing, neither the contract address or exact date for the sale have been made public, however the team is targeting late October or early November, promising at least “a couple of days” notice. The crowdsale will last 3 weeks or until the maximum cap is reached. Unlike many recent crowdsales, there are no bonuses based on how early you participate.

Ethereum-token crowdsales with maximum caps of under $10 million, including DigixDAO (DGD), First Blood (1SŦ) and SingularDTV (SGNLS), have finished within minutes – well before any of their initial bonus periods expired. However, at time of writing, only DGD trades above its ICO price.

What is the project status and roadmap?

The project is currently at the alpha-testing phase of “Brass Golem”, a proof-of-concept version focusing on the CGI rendering use case. It is expected to be finalized within 6 months of the end of the crowdfunding period. Depending on the final level of funding achieved, this will be the first in either 3 or 4 versions of the platform. These are listed along with their expected delivery timelines:

  • Clay Golem: Experimental version for developers to begin interacting with the Application registry. (15 months)
  • Stone Golem: Stable version introducing an application trust system and expanded developer tools. (24 months)
  • Iron Golem: Monster version with many additional features including a web client, external data links and language-agnostic functionality through the Golem Standard Library. (48 months)

How will funds be used?

minimum-budgetSource: Golem Whitepaper

Golem have provided two budget structures based on minimum and maximum funding scenarios. In both cases, the bulk of funding will go towards employment costs. The second largest budget component in both scenarios is contractor fees, largely due to high costs associated with security audits for each major version release. It’s also worth noting that the maximum-funding scenario has a 10% allocation to marketing and expansion, as greater efforts will be required to educate users on broader feature sets.

Who is the team behind the project?

Julian Zawisowski (CEO) and Andrzej Regulski (COO), have been working together since 2008 – first at Polish economic think-tank IBS, and then at Imapp, a consulting and software development company they founded together in 2013. As Imapp, they went on to contract for the Ethereum Foundation as well as Omise’s Blockchain Lab, affording them the opportunity to work with other blockchain technologies including Factom, Hydrachain and Raiden. Imapp has also been working on Black Vision, a real-time rendering engine for Polish production company Blackburst, making CGI rendering a logical use-case focus for Brass Golem. Piotr Janiuk (CTO) is credited in the whitepaper as the “father of Black Vision”, along with a long list of pioneering technical achievements.

Also worth highlighting is the involvement of Alex Leverington, the architect of devp2p, Ethereum’s underlying P2P protocol, as well as Paweł Bylica, creator of EVMJIT, a library for just-in-time compilation of Ethereum Virtual Machine (EVM) code and active member of Ethereum’s C++ team.

Extended bios for the team can be found at the end of the whitepaper.

Things to consider

  • Golem’s team consists of entrepreneurs and engineers with a wealth of experience in the blockchain space, as well as a track record of key contributions to the Ethereum ecosystem. In addition, the team’s experience working with real-time rendering engine Black Vision makes CGI rendering a promising first use-case to showcase the potential of the platform.
  • There is a clear roadmap of feature sets and go-to-market strategies to be delivered, as well as the allocation of resources needed to achieve specific goals. Julien is generally an excellent communicator, evidenced by his contributions to the Golem blog, slack and the Ethereum subreddit.
  • An Application Registry and flexible Transaction Framework are well-conceived long-term enablers of developing new use cases from developers outside the Golem team.
  • Aspiring to be a key building block of Web 3.0 for long-term success makes Golem dependent on the progress and scalability of other decentralized technologies including Ethereum. This provides potential network benefits, but also represents a degree of risk.
  • Although Golem claims it will eventually offer current cloud providers and data centers an alternative way of interacting with their customers, rather than compete with them directly, the reality is they are a decentralized alternative to the current establishment of resource-rich IaaS and PaaS heavyweights, making their undertaking an ambitious one.

Additional Resources

Smith + Crown does not collect money or bounties for posting these announcements. All of Smith + Crown’s announcements for ICOs should not be construed as investment advice or an endorsement. In addition, some of the information contained above may be changed after we posted this; we urge the reader to read all source material before investing or passing judgment. If you see anything that has become obsolete, let us know.