*updated 8/26/17 to reflect new information regarding pre-sale/ICO specifics and token distribution information

PROJECT OVERVIEW

Project Name: Ambrosus

Token Name: Amber

Ticker: AMB

Project Synopsis: Ambrosus plans to drastically improve the trust, efficiency and automatability of global supply chains by integrating blockchain technology in to the manufacturing and distribution process of foods, pharmaceuticals and more. The native token of Ambrosus, Amber, is built on the Ethereum blockchain and allows ‘farm-to-fork’ tracking and quality control of supply chain products, with data stored securely on the ledger and easily accessible to the end consumer.

Website: https://ambrosus.com/

Technical Documents and Vision Paper: https://ambrosus.com/#tech-docs

White Paper: https://ambrosus.com/wp-content/uploads/2017/09/Ambrosus-White-Paper-V8-1.pdf

Presale Dates: Until August 31st (contact Bitcoin Suisse or info@ambrosus.com to participate)

ICO Dates: 09/13/17 – 10/13/17

Crowdsale Hardcap: Presale + ICO =100M CHF (~ 105M USD) = 40% of overall token supply

Token Allocation: See below

TEAM OVERVIEW

Core Management

1) CEO — Angel Versetti

(https://www.linkedin.com/in/angelversetti/?ppe=1)

2) CTO — Dr. Stefan Meyer

(https://www.linkedin.com/in/drstefanmeyer/)

3) Technical Advisor (Core Architecture) — Dr. Gavin Wood (https://www.linkedin.com/in/gavin-wood-88843316/)

4) Technical Advisor (Supply Chains) — Dr. Jutta Steiner

(https://www.linkedin.com/in/jutta-steiner-07bb0695/)

5) Lead Engineer — Prof. Jean-Paul Sandoz

(https://www.linkedin.com/in/jean-paul-sandoz-6544b048/)

6) Lead Blockchain Developer (1) — Marek Kirejcyzk

(https://www.linkedin.com/in/kirejczyk/)

7) Lead Blockchain Developer (2) — Matthew Roberts

(http://roberts.pm/)

8) Lead Frontend Developer — Konrad Szalwinski

(https://www.linkedin.com/in/konradszalwinski/)

9) Lead Scientist (Food Tracers) — Prof. Esther Amstad

(https://www.linkedin.com/in/esther-amstad-1748a134/)

10) Community Manager — Katerina Ianishevska

(https://www.linkedin.com/in/kateryna-ianishevska-ab685b36/)

Advisors

1) Technical Advisor– Dr Vlad Trifa

(https://www.linkedin.com/in/vladtrifa/)

2) Scientific Advisor (Food Reassurance) — Prof Malcolm J W Povey

(https://www.linkedin.com/in/malcolm-j-w-povey-52703915/)

3) Strategic Advisor — David Drake

(https://www.linkedin.com/in/ldjcapital/)

4) Strategic Advisor (1) — Jehan Chu

(https://www.linkedin.com/in/jehan-chu-637101?ppe=1)

5) Strategic Advisor (2) — Jaron Lukasiewicz

(https://www.linkedin.com/in/jaronlukasiewicz/)

6) Mentor — Dhanesh Kothari

(https://www.linkedin.com/in/dhanesh-kothari-b255532/)

7) Scientific Advisor (Quality Control) — Dr Fabiola Dionisi

(https://www.linkedin.com/in/fabiola-dionisi-6462b567/)

8) Scientific Advisor (Biosensors) — Prof. Sandro Carrara

(https://www.linkedin.com/in/carrara-sandro-167b1258/)

9) Public Relations Advisor — David Wachsman

(https://www.linkedin.com/in/david-wachsman-a3a84652/)

10) Communications Advisor — Tom Lyons

(https://www.linkedin.com/in/lyonscommunications/)

Project Specifics

What is the aim of the project and what needs does it address?

At its core, Ambrosus seeks to revolutionize the way global supply chains operate. The main goal of the team is to establish an ecosystem where the need for trust between the farmer, manufacturer, distributor, retailer, and end consumer in a supply chain is removed.

The project’s initial focus will be on food and pharmaceutical supply chains, and addressing existing problems within these industries. Current issues include:

1) Lack of trusted information available to the consumer

There have been several instances in recent years of food and pharmaceutical products that have been fake, contaminated, or of inadequate quality. In many cases, such products have caused significant harm and even death to consumers. Prominent examples include the 2008 Chinese Milk Scandal, 2013 European Horse Meat Scandal and the most recent 2017 Papaya Salmonella Outbreak. Such cases have led to consumer distrust and have warranted concerns about the verifiability of regulatory processes involved in the production of foods and pharmaceuticals. Ambrosus seeks to remove these concerns by allowing quality assurance at each step of the production line — it gives the consumer easily certifiable information about the source, storage, transportation and processing of their food and pharmaceuticals using specific quality measures. The consumer no longer needs to trust the competency or honesty of centralised parties which regulate and approve products, instead being able to rely on independent open-source verification tools provided by Ambrosus which feed incorruptible data directly in to the blockchain.

2) Negative impacts of distrust on industries involved

Beyond the consumer, distrust has also impacted several industries negatively. For example, following the 2008 Chinese Milk Scandal, there was a mass exodus of Chinese consumers who no longer had faith in the quality of locally produced goods. This led to the entire industry being outsourced to foreign producers, effectively crippling the local dairy producers in China. Several manufacturers and suppliers who had met regulatory standards suffered unfairly as a result. Ambrosus gives those who ensure their product is safe and of outstanding quality a trusted way of proving themselves, essentially acting as a stamp of authenticity or approval.

3) Increasingly strict regulatory compliance

Following from consumer concerns, there have also been increasingly strict regulatory rulesets imposed by governments. Examples of these include the FDA’s Food Safety Modernization Act (FSMA), a sweeping reform of food safety laws established in 2011 which led to a crackdown on standards within the US. Ambrosus offers an easy way to integrate blockchain technology to appease regulators, cutting down on billions of dollars spent each year on audits. The paperwork necessary at several points in the supply chain often costs more than the production and distribution of the product itself. In countries like Switzerland where the General Food Law (Reg. EC/178/2002) states that “the traceability of food, feed and food-producing animals and all substances incorporated into foodstuffs must be established at all stages of production, processing and distribution”, Ambrosus has the potential to benefit existing businesses by streamlining the process of regulatory compliance.

4) Lack of trust and consensus between suppliers, manufacturers, distributors and retailors

The distrust may be most noticeable on the consumer end, however, different parties early on in the supply chain must also trust others involved to deliver the products as promised. For example, a food manufacturer must have assurance that the quality of the raw products they are using are satisfactory and that the transportation company delivering the goods doesn’t spoil the product by storing it at an unacceptable pH, temperature or humidity. Ambrosus once again removes the need for trust between interested parties by using smart contracts which only execute and distribute funds to suppliers or distributors if certain prearranged conditions are met. Moreover, the need for intermediaries to enforce the terms now addressed by smart contracts is unnecessary, significantly reducing the cost of all parties involved.

5) Unsustainable and inefficient use of resources and distribution of goods

Adding to the ongoing list of concerns is the worry that large companies are irresponsibly impacting the state of the environment. Central to this concern is the lack of transparent data on factors such as CO2 emission, waste production and consumption of resources required for manufacturing. As consumers are becoming more environmentally conscious and governments more involved in such matters, Ambrosus allows tracking of sustainability indicators which would inform consumers, regulators and concerned parties of relevant violations of environmental measures. Furthermore, Ambrosus would also help manufacturers themselves regulate and analyse their own metrics in an effort to minimise their environmental footprint.

How will they address these needs?

1) Using customised sensor systems with integrated blockchain technology

Ambrosus’ main strength lies in their ability to develop tailored hardware tools that are seamlessly integrated with the blockchain, allowing quality assurance of foods and pharmaceuticals. This hardware comes mainly in the form of Internet of Things (IOT) sensors which are able to record quality parameters (e.g. contamination, aroma, texture, fat content) at every single time point throughout the production line. These sensors can be either stationary or mobile, allowing for the quality to be checked even during transportation, and can be large or small, depending on the parameter assessed. Existing sensor data can be stored in the blockchain already. However, as the CEO, Angel Versetti, mentions

There is no point in storing information on the blockchain and using such a technology if the data from sensors and analytical tools can be tampered with, manipulated, or modified.

IoT integration means that non-invasive, non-destructive and immediate measurements may be made on very small devices — an example would be allowing embedded biosensors within food packaging material to track its quality. Further integration with ethereum means once data is recorded, no one can retrospectively modify it. The marriage of IoT devices and the blockchain forms an unstoppable duo of complex data recording and immutability.

2) Smart Contracts that reduce the need for trust

Ambrosus provides a toolset to create tailored smart contracts allowing automation and execution of pre-arranged distributions after independently verifiable factors are met. For instance, parties wishing to purchase a product may deposit a certain amount of funds which will be put in to escrow by the smart contract and these funds will only be delivered to the provider if certain checkpoints are met (e.g. the supplier delivers by a certain timestamp, there is verifiable quality compliance and the supplying company is not violating environmental regulations). See this working demo for more details: https://www.youtube.com/watch?v=bc8SDl3NfBw.

3) Creation of Peer-to-Peer marketplaces which decrease costs of marketing and distribution

By allowing P2P transactions backed by smart contracts, Ambrosus eliminates a lot of the friction associated with communications and marketing costs from suppliers to manufacturers. Built in smart contracts in the Ambrosus facilitated marketplace means breaches of contract are met with automatic reimbursement to affected parties, and a reputation or honour system can be established. If contracts fail to execute, Ambrosus may also dynamically reroute order contracts to other parties that can fulfil them. Furthermore, insurance services (e.g. product recalls, lost shipments, natural disasters) may also be built in to any contracts executed. P2P marketplaces are but one example of possible tools and dApps that are able to be built and integrated in to varying facets of the supply chain. See this working demo for more details: https://www.youtube.com/watch?v=BliWYTIV2-k.

What does the token do and is it necessary?

Amber is one of the few tokens that does not derive its worth from the inconvenience it poses to users of the technology. Aside from the obvious need to create a network effect, allow crowdfunding, and incentivize community product development, AMB has intrinsic functionality within the Ambrosus ecosystem.

The purpose of each Amber is to digitally reflect the product it is tracking from start to finish. It is a ‘bonded’ token that collects data as it passes through the supply chain. Hence, those that use the system the most will inherently need the largest amounts of AMB to track large volumes of information. Whilst the end user will not have to pay anything to access the information those that create heavy traffic on the Ambrosus system will, and this gives the AMB token an underlying value. It is not a share in the company, it’s a small part of the ecosystem itself and can be put to use. The value of the token will increase as the demand for its use as a tracker is increased. Whilst a token is bonded to its product, it cannot be traded on exchange or markets meaning there will be severely limited circulation given higher adoption, thereby driving price increases.

The specific functions of the token are elaborated in the whitepaper. One of the lead developers, Matthew, gave the following insights in to the token’s purpose:

The Amber token has three main uses 1. To serve as a spam prevention mechanism for an optimized data store. 2. To serve as a way to maintain that datastore. 3. To create value within the ecosystem that uses the token. This is all heavily tied to the types of data generated in the supply chain which is prone to small, frequently produced amounts of data that only need to be kept around for a certain amount of time. There is actually a fourth use-case that may emerge from this, but its tied to anti-counterfeiting which depends on the supply chain (it doesn’t make sense to use this for low-value items.) The technical details is that storing this kind of data directly on a blockchain doesn’t work well (poorly scalable) yet there still needs to be a way to securely maintain references. So the token helps create this data store and ties it to the supply-chain. I’m not good at explaining things but the white paper will have more details.

Who is on the team?

The group working on Ambrosus is likely one of the best of any current blockchain project and will be a major factor in the project’s success. It would be impractical to list down the accomplishments and expertise of every individual working on the project given the tremendous depth of all involved. The range of experience encompasses aspects of blockchain, supply chains, business management, hardware engineering, scientific quality control, and communications.

The CEO of Ambrosus, Angel Versetti, has an impressive track record of managing, investing and developing start-ups, and is recognised as an industry leader in technological and economic development. His expertise in social projects and close involvement with the UN holds Ambrosus on good footing when it comes to regulatory compliance. Experience in asset management and trading of cryptocurrencies, obtained through his work as founder of ‘Versetti & Co’, also lends itself to the project’s development.

The CTO, Dr. Stefan Meyer, has worked closely with data encryption, food analysis, and sensors in previous roles at Nestle, MHM, Microtechnique and Vitargent Biotech. His involvement as a member of the Swiss Federal Office of Agriculture also opens up potential avenues of regulatory integration for the project. The core architect and technical advisor of Ambrosus, Dr. Gavin Wood, should need little introduction for those following the developments of cryptocurrency. Dr. Wood is the co-founder of ethereum, the inventor of the Solidity programming language that is used to program smart contracts on the EVM, and is the founder of Parity Technologies. Other members of the team include the ex-security manager of ethereum and co-founder of Provenance, an ex-developer of Storj and co-founder of Coinbend, the ex-lead developer of Gamesys, a managing partner of Kenetic Capital, the ex-VP of J.P. Morgan, and the president of a fund network who has managed 1.5 trillion USD in assets.

Needless to say, you would struggle to find a more comprehensive and experienced group of people to fulfil Ambrosus’ vision.

Product Development Roadmap

Competitors:

There are few blockchain solutions currently working on the issue of global supply chains. Of those that do exist, many have specific focuses compared to the broader and much more ambitious goals of Ambrosus. In the end, the most likely competitor and source of resistance will be pre-established entities and middlemen which charge premiums on services otherwise automatable and seek to maintain their stranglehold of supply chain distribution.

1. Provenance

The project most comparable to Ambrosus at first glance is Provenance. Similar to Ambrosus, Provenance allows start to finish tracking of goods on the supply chain with the retrieved data stored on a blockchain and accessible to end consumers.

However, their focus appears to be mainly on proving authenticity of products produced, with particular attention to the materials used and their source. Moreover, tracking is primarily achieved through barcodes, radio chips and labels, which only tell a limited story about the product. Many facets of their tracking process are open to manipulation as the tools developed by Provenance are unable to measure specific attributes that Ambrosus sensors otherwise could (e.g. pH, sodium content, etc.).

Provenance has been running for nearly 2 years now and it certainly has a leg up on Ambrosus in terms of first-mover advantage. However, the scope of Provenance is significantly limited by comparison. Additionally, given Provenance’s focus on radio chips and labelling, it may actually be complementary to Ambrosus’ wider plans in the future. In fact, the co-founder of Provenance, Dr. Jutta Steiner, is the technical advisor for supply chains of Ambrosus so collaboration is likely.

2. IBM (Hyperledger)

The most direct competitor of Ambrosus is undoubtedly IBM’s Hyperledger umbrella project. IBM’s open source cross-industry blockchain solutions and services platform is a well-established force within the crypto space and they have depth of experience in IoT, supply chain, manufacturing and technology. IBM has the brand and backing of established industry leaders with partnerships like Walmart, Maersk, Nestle and Kroger, amongst others within the “Big Blue” consortium, allowing pilot studies to be immediately established on a large scale.

The difference, between IBM’s project and Ambrosus’ once again lies in the fact that Ambrosus has a heavy interest in developing sensors and hardware tools, whereas IBM is mainly concerned with labelling and tracking with integrated blockchain security. The ecosystem established by Ambrosus will be focussed on being able to verify quality measures down to a microscopic level, IBM being more similar to Provenance in this sense.

The economics and incentives for product development are also different. Hyperledger is not a community project and relies on Practical Byzantine Fault Tolerance (PBFT) that has an inherent need for trust and centralization to increase scalability. They do not have a token and there is little financial incentive for independent developers to create community projects built on Hyperledger. This makes it difficult to create the same ecosystem Ambrosus envisions. Several stakeholders of the Hyperledger project also are planning to invest in Ambrosus. Given that the product timeline for Ambrosus states that there will be cross-chain interoperability with Hyperledger in the future, it is reasonable to assume the two may co-exist within the supply chain space, perhaps with Hyperledger taking a more specific role in macro tracking.

3. Modum

On the opposite end to Hyperledger, Modum is a blockchain solution with an upcoming sale for a token that is able to track the temperature and environment of a product throughout its production and distribution. This is achieved through IoT temperature sensors. Its scope is similarly limited compared to Ambrosus. Also, the token does not actually have a blockchain protocol, and the token is just a share in the company.

4. Stratis

Like Ambrosus, Stratis can build business solutions for industry verticals like supply chains by leveraging IoT. This can include product tracking and exchange platforms that use smart contracts, similar to what Ambrosus is planning.

That said, whilst supply chains are only one possible use case of what Stratis is developing, it is the primary focus of Ambrosus’ vision. This is reflected in the Stratis team which has extensive blockchain development experience, but little industry expertise in supply chains and business solutions relative to the Ambrosus core management group.

5. WaBi

WaBi is a coin targeted at Chinese users who may be concerned about counterfeit products that they consume. Like Provenance, its focus seems to be more towards prevention of fake goods, as traceable through barcodes and labels. It has been quick to move in this market, already having digitally linked physical products available for purchase on their JD.com store (mostly milk powder). As with Provenance, WaBi does not pose a likely challenge to the overall ecosystem Ambrosus plans to build.

Challenges and Weaknesses

- The project is relatively unknown within the crypto space at the moment (although this could also be a strength from an investment standpoint). The publicity of the project is just starting to gain traction.

- As with all ambitious blockchain projects, they face significant challenges in establish adoption within involved industries. The most recent addition to the Ambrosus team, David Drake, has a strong financial interest in global commerce and seeks to help address potential issues with adoption.

- Due to the scale at which they operate, they will need to ensure that international cooperation can be achieved. Regulations between countries will be different, and it will be difficult to coordinate transactions between such parties.

- Scalability of the project is tied to that of Gavin Wood’s Kovan network (a fork of ethereum) to which Ambrosus will be bound. Although this increases interoperability of the network, it comes with the inherent issues of a private blockchain.

Opportunities and Strengths

- The possibility for disruption is extremely high and it addresses several immediate needs.

- The team is one of the best in blockchain and has significant expertise in the supply chain domain. Partnerships with EIT and EPFL also give the team a large head start.

- The competition in the space is relatively undeveloped and focussed on macro-level tracking. Potential collaboration between existing projects is also possible.

- Ambrosus has set achievable project deadlines for themselves and have given a clear vision of how they plan to execute. The team has wasted no time in achieving their targets to date with a demo of the marketplace and smart contract already available.

- The ability to use IoT devices will have several businesses within the supply chain industry immediately interested in potential integration of products and services.

Token Specifics

Currently, presale is available through private communications with the team or through Bitcoin Suisse, a 3rd party asset manager. There is a $100k CHF (Swiss Francs) minimum contribution amount in the presale through private communications but only a $5k CHF minimum through Bitcoin Suisse. Presales through private communications will have the following discounts applied:

Ambrosus Presale Bonus Model. Retrieved from https://blog.ambrosus.com/amber-token-allocation-intended-use-of-proceeds-d6a34b7a62f1

It is important to note that a discount is not the same as a bonus. A contribution of 100k CHF at a 10% discount would actually result in 111.11k (11.1% bonus) CHF (100,000 / 0.9 = 111.11). Therefore a 500k CHF contribution with a 20% discount would be 625k CHF worth (25 % bonus) and so on.

The higher minimum on the private presale is necessitated by the fact that individuals wishing to participate must go through legal verification processes including KYC, and tailored contracts must be provided to each specific individual. The CEO is also offering personal live video chats with each individual private presale investor to ensure contribution addresses are correct and scams are not possible. As such, it would be impractical and costly for the management team to repeat this process for individuals only willing to contribute small amounts.

There will be a fixed supply of Amber with no new tokens being minted. The amount of AMB distributed to the management team and reserved for growth of the network is listed below. The management team’s AMB will be held in escrow for 2 years with ¼ released every 6 months.

Amber allocation model. Retrieved from https://blog.ambrosus.com/amber-token-allocation-intended-use-of-proceeds-d6a34b7a62f1

The full justification for the allocation and intended use of proceeds can be found here on the Ambrosus blog: https://blog.ambrosus.com/amber-token-allocation-intended-use-of-proceeds-d6a34b7a62f1

Overall, the immediate market valuation of the project will be around ~$250M CHF assuming presale and ICO supplies are completely sold out (Token sale hardcap = $100M CHF = 40% of total supply; Valuation of total supply based on token sale price = $100M / 4 * 10 = $250M CHF).

This will be a large market cap for a blockchain project, however it is of my opinion that such costs are highly justified. The project will not only require enough money to allow a few developers to sit in a room and code, but will incur massive expenses in initial R&D of sensors, and further costs to build them. Whilst 40% of the total supply may seem like a small amount to be distributing to investors, the remaining 60% will be put to full utility. The main network effect required will be that of supply chain business adoption which is why a large amount at a subsidized rate will be distributed to facilitate partner development. The portion allocated to the team is quite modest in comparison.

Conclusions and Investment Considerations

Risk Potential: Low

Short-Term Investment Potential: Average

Medium-Term Investment Potential: High

Long-Term Investment Potential: High

The Ambrosus ICO will likely be one of the most successful offerings in 2017. They have the purpose, they have the vision and they have the team to execute. The initial cap on the project is large given the overwhelming expenses needed for hardware development and business integration, so it will be difficult for immediate and dramatic rises in the price of AMB. Investors looking to flip the token for a quick profit will likely be disappointed. However, despite the project being for the long-term, there are several milestones which Ambrosus may achieve to allow immediately applicable products to be used on supply chains, thereby increasing the value of AMB. The value and utility of the token will shine over time, even if its immediate reception may not.

*Disclosure: Opinions expressed in this article are not to be taken as instructions for investment and any advice given should only be acted upon after significant consideration of the inherent risks involved. At the time of writing, I have no stake in the Ambrosus ecosystem however I am looking to purchase AMB during the presale.

Further Resources

Website: https://ambrosus.com/

Vision Paper: https://ambrosus.com/wp-content/uploads/2017/07/Ambrosus-Vision-Paper-V.2.3.2-EN.pdf

Operations and Use Cases: https://ambrosus.com/wp-content/uploads/2017/07/5-1_Operations_and_ApplicationsNEW.pdf

Data integrity and transmission: https://ambrosus.com/wp-content/uploads/2017/07/4-3.-Technical-Data-Integrity-and-TransmissionNEWupd.pdf

Food Sensors and Tracers: https://ambrosus.com/wp-content/uploads/2017/07/4-2_Food_Sensors_and_TracersNEW.pdf

Non-Invasive Analytics: https://ambrosus.com/wp-content/uploads/2017/07/4-1_Analytics_and_Non-invasive_TechniquesNEW.pdf

Business Opportunities: https://ambrosus.com/wp-content/uploads/2017/07/2-1_Statement_and_Business_opportunitiesNew.pdf

Marketplace Demo Video: https://www.youtube.com/watch?v=BliWYTIV2-k

Smart Contract Demo Video: https://www.youtube.com/watch?v=bc8SDl3NfBw

Baby Food Use-Case Demo Video: https://www.youtube.com/watch?v=OkdCV6zw3lI