Disclosure: Smith + Crown was a compensated advisor to this project.
What is the project?
Simple Token bills itself as “the bridge between crypto-currency and mainstream consumer apps.” While there seems to be no shortage of good ideas around what to do with emerging blockchain technologies, there is still a scarcity of people with the knowledge and knowhow to design, build, and launch crypto-currency based solutions. Simple Token aims to solve this problem with a protocol that enables consumer applications to bootstrap into the crypto economy by leveraging Simple Token’s pre-built, customizable token infrastructure.
Interestingly, the team behind Simple Token initially set out to build a one-off app, but in the process identified an opportunity to solve a problem facing the blockchain industry at large. Led by former Fab CEO Jason Goldberg, the team wanted to build a platform that would democratize travel research information and regional expertise in a consumer application, called Pepo. While building Pepo, the team’s introduction to the challenges of funding procurement and product development in the blockchain space inspired a series of broader reflections. Eventually, they came to the realization that there was potentially a larger opportunity in building an infrastructure that would enable other consumer apps to issue tokens for their users much more easily.
With this in mind, Simple Token’s leadership began to consider how their planned Pepo app, with over 200,000 users, would make for a perfect test case for deploying a branded coin using the Simple Token protocol. Treating Pepo as a ‘customer’ from day one would allow Simple Token to develop its protocol in response to real customer needs rather than developing in a vacuum.
Here’s how it works:
Simple Tokens (ST) will be the token offered during the upcoming token sale, and will be used to root the Simple Token ecosystem in the Ethereum public blockchain.
A Member Company (MC)—anyone wishing to tokenize some aspect of their product or service offering—will utilize the Simple Token Platform to design and construct their own ‘Branded Token’ (BT) to be used for in-app transactions and commerce on a side-chain. To that end, Simple Token is building a number of open source ‘modules’ for Member Companies to add and build from, including:
- A Token Design Module to set the branding, staking parameters, exchange rate, and restrictions.
- An Identity Module for user profile creation and KYC (Know Your Customer) verification.
- A Wallet Module for implementing accounting, payments, token purchasing and exchanging, and smart contract functionality for incentives and rewards (like tipping content authors, and voting.
- A Ledger Module for public transaction history and transaction auditing.
- Rights modules for Digital Rights Management, royalties, and commissions.
- An Administration Module for analytics, alerts, monitoring, fraud prevention, and security.
- An Interoperability Module which looks to increase network effects by encouraging cross-functionality between member companies on the Simple Token network, and, eventually, across the wider Ethereum network of services as well.
Member Companies use ST throughout the life cycle of the token issuance and distribution process. First, member companies will use the Simple Token platform to design and launch their custom branded token. Once a branded token is ready for launch, the member company purchases and stakes Simple Tokens to an Ethereum Smart contract. This triggers the execution of code that controls the minting and distribution of branded tokens on a side-chain. All branded token transactions will happen on the side-chain, and are validated by the Simple Token Foundation, Simple Token Company, and member companies. Member Companies won’t need to maintain a consensus mechanism or rely entirely on Ethereum mainnet, which won’t yet support transaction capacity for consumer applications like Pepo. The side-chain state root will be regularly and automatically anchored to the Ethereum Network to ensure immutability. The thinking is that member companies will initially purchase ST for their BT issuance and distribution campaigns, and eventually (if their company gains users and market traction) their BT peer-to-peer economy will take on a life of its own.
What is the Token Being Sold?
Simple Tokens (ST) will be freely tradable ERC-20 tokens, purchasable from 3rd party public exchanges (listing exchanges are still TBD).
The primary function of STs will be as a stake of value to back branded utility tokens (BTs). Member companies stake ST to a smart contract on the Ethereum Network and define the conversion rate between ST and the BT they would like to create. A set of BTs are then minted and distributed by the member company to their users. Since the newly minted BTs are essentially a denomination of the ST value held in the smart contract, BT holders can always ‘cash out’ their BTs in exchange for STs which can be sold for fiat on external exchanges.
ST will play several roles within this framework, as well as a few additional roles on the platform, including:
- Increase BT Liquidity: BTs can be exchanged for their equivalent value of STs at any time. When users cash out, they receive a disbursement of ST from the member company’s BT issuance smart contract.
- Future Token Issuance: Users of member company applications can purchase BT by sending ST to the token issuance smart contract. Member Companies can also increase the total supply of BTs available by stacking additional ST to the issuance smart contract.
- Governance: Simple Token holders can provide non-binding input on certain protocol governance issues
- Membership Fees:Simple Tokens are paid by member companies to request and maintain membership in the platform. Companies will need to both stake simple tokens and pay an ongoing annual fee in simple tokens.
The Token Sale and Distribution
Simple Token will generate 800,000,000 ST Tokens, a maximum of 30% of which will be sold in a public token sale.
The remaining 70% of Simple Tokens generated will go to Founders (10%), Advisors (10%), Early Backers (5.6%), the Accelerator Program (27.2%), and held for future token sales (17.2%).
Network Accelerator Program
In addition to using Pepo as an initial test case and proof-of-concept, Simple Token plans to reserve 27.2% of Simple Tokens generated during the token sale for grants to early adopter companies. These grants will help them kickstart their Simple Token implementations and grow their networks.
Grant recipients and other early adopter companies will help define requirements, software, and related services for the Simple Token Protocol.
Up to 50% of the tokens offered in the token sale will be available via private pre-sales (which began back in September 2017). Minimum buy-in for the pre-sales is set at $200,000 USD, and participants in the pre-sale will receive 20% bonus tokens, dilutive against the Foundation’s reserves for future token sales.
NOTE: Purchasers in the token sale will be able to reserve their unique Branded Token name during purchase on the Simple Token website.
Pre-registration for the November token sale will begin November 1st.
What is the Project Status?
The Simple Token project has roughly 31 team members, design prototypes in place, cryptoeconomic token design nearly completed, and the protocol architecture is publicly available.
The OpenST Foundation’s project code is up on Github, and the Simple Token protocol architecture is in place today (i.e. after the token sale, ST token holders should have the ability to deploy branded tokens on side-chains). The Pepo app is also scheduled to launch using Simple Tokens in Q4 of 2017, with other member companies signed up to follow shortly thereafter.
Who is the team Behind the Project?
The team is led by Director and CEO, Jason Goldberg, who previously held the position of founding CEO at Hem, Fab, and Social Median. Jason is also currently acting CEO of Pepo.
Nishith Shah is Simple Token’s Director and CTO, and previously worked with Jason at Hem, Fab, and Social Median. Nishith was also previously the Founder and CEO at True Sparrow Systems.
Benjamin Bollen is Simple Token’s Chief Technology Strategist, and likely has the most hands-on blockchain experience having worked as a Lead Developer at Hyperledger Burrow, a Senior Developer / Platform Lead at Monax Industries, and as Research Engineer, Core Developer at Maidsafe.net Limited.
Other notable members of the founding team include:
- Paul J du Plessis as Director of Market Development
- Jason Banks as Lead Engineer
- Sunil Khedar, a Founder and CTO at Pepo
- Lionello Lunesu as Engineering Lead
- Antoine Cote as Engineering lead
|Incorporation status||OpenST Ltd. (Foundation), Hong Kong; Simple Token Company Inc., Hong Kong|
|Team openness||Fully Transparent|
|Technical Lead||Nishith Shah|
|Technical White Paper||Yes|
|Available Project Code||Yes|
|Role of Token||Payment (utility)|
|Token Supply||800 million|
|Amount Distributed in ICO||240 million|
|Emission Rate||Not Available|
|Consensus Method||Proof of Work|
|Sale period||November 14th to Dec 1st, 2017|
|First price||0.083 USD|
|Investment Round||Seed Funding, 2016-2017|
|Token distribution date||Immediately following Token Sale|
|Min investment goal||None|
|Max investment cap||20 million USD|
|How are funds held||Not clear|
|Minimal Viable Product||Yes|
|Bonus schedule||20% during Pre-sales|