Many thanks to everyone who participated in our Sweetbridge AMA (Ask Me Anything) on Telegram on Saturday 12 May, with founder and CEO Scott Nelson. In the run up to our crowdsale it was invaluable to have Scott check in and answer some questions from our Community. They were great questions too!

Therefore, we have put together some highlights for those that missed it. Here’s a picture of Scott Nelson and our manager of Community and Events who you might recognise from Telegram Alastair Band, also known as Beard on the Block, taken at the AMA.

Saturday 12 May, an AMA with Scott Nelson on t.me/sweetbridge in London with Alastair Band moderating

ON SWEETCOIN (the discount token)

Question: How do you determine the intrinsic value of Sweetcoin (SWC) — (our discount token)?

Answer: “The intrinsic value of SWC can be easily calculated by taking the revenue generated by the Sweetbridge (SWB) network, multiplying it by 50% and dividing it by the number of SWC that are activated in SWB wallets versus being held and not utilized (HODL’d). At project start we are setting the minimum discount value of activated SWC at $0.07 per month. This is equal to $4.20 over a 5 year period. Every time our network doubles in size, our protocol allows us to release more Sweetcoin, much like mining Bitcoin. This has a cap in a similar way, too. Because the growth of the SWC supply is 25% of the growth of the revenue in the SWB network, the discount value grows by 75% every time the network doubles in size. If the network double in size every year for the next 5 years, even including the dilution from new SWC releases, the intrinsic value of SWC would go up by 19 times.”

ON SWEETBRIDGE ENTITIES

Scott talked about the model for Sweetbridge to create thousands of self-managed entities around the world. The below thread is around the subject of entities and the laws they operate under:

Question: The Sweetbridge​ ​Membership​ ​Agreement states that the governing law is the law of the State of California.

Answer: “There are currently 11 Sweetbridge financial services entities around the world, we hope there will ultimately be thousands. The membership agreement is with the entity that performs the KYC / AML to which the member belongs.”

Question: However, the token is issued by a Swiss foundation. Thus it should be subject to Swiss law?

Answer: “Tokens are not issued by just a Swiss foundation, there are 11 entities that hold the original tokens generated in the genesis block of the Sweetbridge protocol. These entities exist in different legal jurisdictions, only one of which is the Swiss foundation.

“These entities distribute SWC through Sweetbridge financial services entities. So the entity releasing the coin, and the entity selling the coin may not be the same legal entity.”

Question: How is this not a conflict of law?

Answer: “See answer above.”

Question: Which legal system applies?

Answer: “The legal system of the jurisdiction of the entity selling the token.”

Question: What is the legal venue for disputes? A Swiss court or a Californian court?

Answer: “It depends on what the dispute is, and also which legal jurisdiction the member was sold tokens from.

“Any entity can be licensed to distribute SWC. These entities could be existing banks or financial institutions, non profits or entities set up by a group of individuals who want to act as a SWB financial services entity.”

Question: Everyone can start a Sweetbridge entity. But how? Where does one start? There is no legal entity in my jurisdiction!

Answer: “We haven’t publicly announced this yet, we are working on a white paper related to this. We hope to recruit entities on every country on Earth, basically to start a SWB entity you need to be able to do 3 things:

“You have to sign a charter that sets out terms of governance and requirements related to things like KYC / AML, data security, protocols and tech that has to be used.

“The second is you have to use some or all of the SWB protocols

“Finally, you have to put up a financial stake to act as proof of stake relating to following the terms of the charter. This stake starts small, and then increases as financial activity increases.

SWB Financial Services entities are allowed to add new members, sell SWC which they can buy wholesale when revenue increases for Sweetbridge. This is like mining of Bitcoins. If they grow SWB revenue, they get tokens they can sell.”

Question: Why do we need separate Sweetbridge financial entities?

Answer: “To do work in the real world, we have to have contracts with legal entities to hold assets. We also have to have legal entities that have proper licensing within each legal jurisdiction to enable commercial activity. This could be money transmission licenses, licenses to hold accounts, to pay interest, to provide consumer loans etc. In many legal jurisdictions you have to have a local company that holds these licenses, it would be cost prohibitive for SWB to create these entities everywhere in the world. As such it is much better for us to recruit and license entities that exist already.”

ON BUILDING THE MOVEMENT:

Question: I expect that many community members wish to become more involved. Is there a job market for Sweetbridge or Sweetbridge Alliance members?

Answer: “I would to say that this has been an area of disappointment to me in our execution so far, as I would like to see us doing a better job of getting community members involved. It’s not been realistic, the regulatory issues that we have been navigating have taken so much time and energy, and created so much uncertainty about what we could and couldn’t say, that it was very difficult to keep a large group of people connected and moving in a common direction. That is over now and deciding not release initially in the U.S. has been amazingly freeing. There is a job market at SWB and the alliance members that will be publishing as we get further into our Stage 4. Right now we are trying to minimise the number of new people we are adding to the team until we get the marketing engine fully functional.”

Question: How far out do you envision a few supply chains fully utilising Sweetbridge tech?

Answer: “I would think 3–4 years. Pilots that fully utilize SWB in 1–2 years.”

ON REGULATORY AND COMPLIANCE:

Question: Why is there a waiver for class action suit?

Answer: “Because they’re the Devil’s playground, particularly in this space. With regulatory environments changing constantly and lack of clarity around how to interpret regulations, it is too easy for people to create artificial claims using a class action suit.”

ON PRODUCT:

Question: Have any patents been applied for in regards to Sweetbridge’s protocols/tech?

Answer: “Yes, patents have been applied for related to liquidity protocol and other areas. These patents are being used mostly as a defensive mechanism to prevent large, well financed institutions, from being able to get patents on this technology prior to public distribution of our technology.”

ON THE MARKET:

Question: Who or what would you consider as Sweetbridge’s main competition?

Answers: “Our real competition is the status quo, as Jeffrey Moore says in Crossing the Chasm “if you want new technology to be adopted, it has to everything that people value in the existing technology and something new or something better. Otherwise it never replaces the existing status quo” (sic)

“There are pieces of Sweetbridge does that other projects are doing, most of which have a different application. Peer to peer lending platforms like SALT would actually be potential customers for Sweetbridge. Sweetbridge protocol doesn’t require a counter party, all other P2P platforms use counterparties. This is why Sweetbridge can allow users to set their own loan terms, and negotiate their loan with themselves any time.

“There’s also other stable coins, such as Maker and Basis, none of these are targeting the use case of commerce. Therefore, they do not sit on top of an accounting protocol which Bridgecoin does. As we just announced in London this week the Sweetbridge Accounting Protocol.

“These other stable coins use market making functions to create stability, or like Tether they use a 1–2–1 backing with fiat currency

“BRC uses both of these, but also uses an additional and more powerful mechanism which is acting as the unit of account. The WIR Bank (formerly Swiss Economic Circle) has a private currency pegged to the Swiss Franc (CHF) which has been rock solid pegged for 70 years, this is because it is the unit of account between the buyer and the seller. BRC is designed to be used in the same way. There are asset wallets, like Balance.io, that are starting to emerge. Unlike the SWB wallet, these aren’t integrated with an accounting protocol, and don’t track financial gain, loss, expenses and income related to assets. The SWB wallet does.”

Question: How does Sweetbridge plan to increase its exposure, now that a date has been set for the public sale of SWC?

Answer: “Until recently we have been trying not to hype our project, this was done primarily as the result of concerns about the SEC. Now that we have decided to launch Stage 4 outside of the US, under the advice of the SEC, we have much greater freedom. You will have seen increased activity recently, which will only keep increasing over the next several months. Our KYC / AML process for membership has some of the highest standards in the space. We have a limit to how many members we can onboard per month as a result, and we became severely backlogged earlier in the year. We are a few weeks away from being caught up. And so we are managing our marketing and “hype” to our capacity to onboard new members, which we are also working to expand.”

ON U.S PARTICIPATION:

Question: FINALLY… we were not running the AMA in U.S hours so I jumped in and asked this question: Many in the US are asleep right now, but as Community Manager I am conscious that Sweetbridge aims to be a globally inclusive company. It must be frustrating as a founder from the US you are having to pass restrictions you have faced down to your fellow people. What do you see as an outcome for US in the next 12 months within the Sweetbridge context. I know you are doing all you can to resolve but is there any message you can give here to the US community?

Answer: “What I would say to the US members is that we will be able to release products in the US, even if we can’t sell SWC people be able to use the products anyway. So the lending protocols, the payment systems, the settlement protocols, the wallet etc. will all be usable by those in the US even if we can’t sell SWC yet.

Having said that, I also believe there is a good chance we will be able to sell SWC in the US without being classed as a security once we are up and operational overseas. There are good reasons to believe that this will be possible and it could occur within the next 12 months.”

FINALLY HE LEFT US WITH:

“We have so much we have not yet announced that I have been excited to start revealing — We are signing off, thanks everyone!”

Follow us for more AMAs on t.me/sweetbridge.