Activate is making its inaugural token launch with Skale Network, according to a Feb. 11 press release. Activate is a token launch platform developed by ConsenSys Codefi, which seeks to jumpstart the actual usage of new networks.

The platform was announced in October 2019, and it was created specifically to bootstrap adoption for new projects. Its first launch partner and inaugural project is Skale Network, a smart contract platform based on Ethereum.

What is Activate?

While Activate shares several features with initial coin offering (ICO) platforms such as CoinList and Binance Launchpad, its team is adamant in its wish to not be categorized as one. Cointelegraph spoke with the team behind both Activate and Skale to learn more about the upcoming launch.

ConsenSys’ Global Lead of Token Architecture Ejaaz Ahamadeen summarized the functions of Activate:

“Activate is a platform that allows anyone to engage and participate in decentralized networks. That's kind of like a statement as a whole. And the best way to think about it is it equips you with the means to purchase, manage or use your utility tokens through its entire existence.”

Even though it does allow projects to collect money from users interested in participating in the network, that is not its primary function. Activate focuses on making the newly created tokens usable within the network immediately. As Mara Schmiedt, Strategy Lead for ConsenSys Codefi, explained:

“What we're planning to do with Activate is to take our launch partners through the journey of the token distribution, and then equipping the token holders that receive them with being able to immediately and actively use them in the network.”

Proving usage

The ability to use the tokens does not guarantee their usage. Incentivizing crowdsale participants to be active members of the new project’s community has traditionally been a difficult task — most just focus on the money.

For this reason, Activate features a system named Proof of Use. It was developed as part of ConsenSys’ Brooklyn Project in 2017, which aimed to create a framework for the proper distribution of tokens.

Schmiedt further elaborated on the system:

“Proof of Use is a programmable mechanism that ensures that any token holder that receives tokens as part of a launch also demonstrates an intent to use them. What that translates into is that you are required for a set period of time to use your tokens, until you're able to use them for other purposes.”

The definition of “usage” is different for each project. In the case of Skale, token buyers are required to devote 50 percent of their holdings into validating the network for at least 90 days.

Revealing the motivation for this feature, Schmiedt added:

“For us, it's important to make sure that those that receive the tokens are the ones that are best positioned to make impactful contributions — by demonstrating their intent to use and understanding of the protocol’s functions.”

Collecting money is not critical

For the Activate team, token sales are just one of the available mechanisms to distribute tokens. The platform remains flexible to the wishes of each individual project, potentially allowing alternative methods such as airdrops.

Skale will be offered under a Dutch Auction arrangement, a system where the price of an item is progressively lowered from a high asking price until a buyer is found.

According to Ahamadeen, this makes the price formation process more transparent and less prone to speculation. “When a Dutch auction is occurring, users effectively contribute value at the price that they believe that particular token is worth,” he summarized.

The team emphasized that the platform is not made for speculative investments. Each participant will be required to complete a quiz on the project’s features and Activate’s functionality, which is yet another barrier to only let truly dedicated users purchase the tokens.

When asked whether Skale Network needs the money, CEO of Skale Labs Jack O’Holleran revealed that it is not an immediate concern. The team is mainly looking to add participating nodes to the network, while the money will be stored for later.

What is Skale?

Skale Network, as the name implies, is a new blockchain network focusing on providing a scalable environment for decentralized app (DApp) developers. Skale’s architecture follows some of the principles of Ethereum’s sharding proposal, as the computational load is distributed between separate chains.

The team boasts sub-second block times and over 2,000 transactions per second on each of its chains, which can run complete smart contracts in Ethereum’s Virtual Machine environment.

In order to achieve these figures, Skale Network will make use of a few dozen validator operators, who can manage multiple network nodes each.

As O’Holleran elaborated:

“A node is run by a validator, and then that node in Skale could be pooled together as a resource. It's almost like Amazon EC2 [a cloud computing solution]. You can have a small chain, a medium chain, a large chain.”

The resources of each node can be split between other network participants to maximize the performance of individual DApps. “At the end of the day, each DApp gets their own blockchain,” he concluded.

Skale will use a leaderless Byzantine Fault Tolerant consensus mechanism, which ensures cooperation between the various validators. The network is also fully interoperable with Ethereum, as each individual blockchain shard uses a slightly modified version of its software.

The token auction will be live some time in Q2 2020, with Activate currently allowing pre-registrations.