ICO Aftermath: Blockchain’s Simple Token Takes Next Steps

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Simple Token enables any business to launch their own digital currency powered by its OST token and the OpenST protocol. The company concluded a successful ICO earlier this month, raising about $20 million in ETH within a month (the estimated value of the raise has since skyrocketed from ethereum’s appreciation).

Now comes the hard work to actually build a product. Simple Token today unlocked and distributed the OST tokens sold, enabling the OpenST protocol to move from ethereum testnet to mainnet. Simultaneously, OST has been listed on the Binance exchange.

The unlocking of OST and release of OpenST 0.9.1 enables blockchain developers to replicate the protocol on the ethereum mainnet, make use of the scalability and performance capabilities of OpenST defined-side blockchains, and begin preparing branded token implementations. CEO Jason Goldberg of Simple Token talked with Block Tribune about what comes next following the successful ICO.

BLOCK TRIBUNE: First of all, congratulations on the ICO. Looks like it was fairly successful.

JASON GOLDBERG: Yeah. This is quite a remarkable turn of events. We had fairly low expectations. When we started the token sale process, the ETH market was very soft. At the end of October, ETH was in the $280s, $290s, and a lot of the altcoins, the tokens, were really struggling versus their offering price.

A lot of folks told us, you sure you want to do this right now? You want to maybe postpone your token sale until 2018? And we saw that people who learned about the Simple Token project and were able to educate about the value proposition about Simple Token and the OpenST protocol seemed to have a high majority of educated people about the project and were supporting it – our calculation was, if we can get out there with the community and educate them about Simple Token, that we should be able to have a have a good first token generation event.

It exceeded all our expectations and then some. We hit 189% of our target. We raised over $20 million of ETH. Since then, ETH has gone way up, so it’s worth a lot more. The key thing for us is 6,871 purchasers who we really got to educate about the value proposition of Simple Token and the utility of the OpenST protocol. And we needed the token sale event in order to have the market assign a value for Simple Token so that it could be used in the Simple Token protocol for companies who needed to stake Simple Token. That was a key element against creating their own, according to our protocol.

What we’re focused on now is transition from token sale to OpenST protocol and bringing that to life.

BLOCK TRIBUNE: What will you do next? What are working on since the sale ended?

JASON GOLBERG: As with the entire token sale, we’re really trying to get it right, professional. We took the approach of less focused on hype and more focused on quality and checking the right boxes. Like with our token sales, where we weren’t trying to get it done in the first day, we also took the same approach with the overall project.

So rather than unlocking the tokens so they could be transferred and tradeable immediately after the token sale, we gave ourselves 21 days to prepare to unlock the tokens. The token sale ended on Dec. 1st and the unlock is on the 19th.

That’s given us time to really move to the next step of the protocol development, and to make sure that for people who were unable to buy their tokens for whatever reason or couldn’t buy the tokens, that they have good places to buy the tokens in the future. As well as announcing more companies who will partner with us.

On the development standpoint, we established the utility of the OpenST protocol prior to the token sale, and on the core utility of the Open ST protocol, where any company, any developer, any person or developer can stake Simple Tokens against creating their own brand of digital currency on open scalable sidechains in a cryptographically auditable manner. We proved that out before the token sale, but we did all that on ethereum testnet, because until you have the token generation event and until the public market assigns an ongoing value to the tokens, the whole thing is kind of in a test environment. So a key thing is, when the toekns are unlocked and tradeable and there is a market price for them, we move to OpenST Protocol 0.91. It’s really about taking what we did already on testnet and moving it to the mainnet ethereum area so that blockchain developers can get their hands dirty and start to stake Simple Token in real life against creating their own brand tokens

It’s in the developer sandbox stage right now, so it’s enabling developers to get their hands dirty and to start to understand the staking mechanisms – unstaking – so if, let’s say, if a company enables their customers to earn their brand token or buy their brand token or to maybe they get one with a transaction with another user, that once they get that brand token, that the only thing that brand token are exchangeable for are Simple Tokens. There’s no actual market value to those brand tokens. That’s kind of the whole purpose of the protocol – you don’t have to worry about the whole legal/regulatory mess of having your own tradeable token. It’s all just a based on digital currency powered by Simple Tokens.

So the unstaking process is very important as well. Then you have a process by which, if your customer wants to take the brand token that they’ve earned and convert it back to Simple Tokens and then they can do what they want with it, sell it or whatever, then they have a process for that. So those are things that are all the developers can get their hands dirty with that.

It’s all a digital currency powered by Simple Token. Your customer wants to take the brand token back to Simple Token – those are things that allow developers to get their hands dirty.

In January, we will be doing a couple things – we’re launching some simulators and tools to help developers go through a more endemic experience in staking and come up with a user experience around what it’s like to set up a token economy, to set up an exchange rate, to set up various transactions types, to go in the next step.

We will have in January the first end-to-end branded token experience that any developer can participate in. They will be able to earn a branded token to educate and teach the community about the power of sidechains and the solutions we’re working on.

Then into the next phase to make the protocol more robust, adding software layers on top of it. So that that will allow anyone to interact with the brand token economy. There’s a lot of things we need to solve along the way and make really easy for companies, so we’re working on some interesting innovations like managing keys on behalf of end users and what’s the role of Simple Token versus the company and some innovations on scaleability, increasing the transactions speeds and through-put compared to public ethereum. And also with working on user experience and transaction types and monitoring analytics of the token economy.

BLOCK TRIBUNE: Are most developers working on their own project? Or are they working for someone? And when will your vision be viable to the masses?

JASON GOLDBERG: Most companies have their own developers. So we have over 100 companies that have internal developers, not necessarily blockchain developers. And in terms of mass market consumer launches, it really depends on the pace and capability of those developers. We’re working with some companies that want beta trials sooner than later. Others who want to wait. A lot of these things are very complicated.There’s a dashboard you need to manage your ecosystem and your economy.

A lot of these are very complicated, and I say, do you want a token economy, have you thought through how you’re going to manage it? And then, as well as thinking about how sophisticated you want your users to be? Are your end-users all going to manage their own private keys, or are you waiting on a managed key solution? A lot of answers to the question appears on the sophistication of the company and the sophistication of their user base.

If you do it right versus just doing it fast, all of that has to be well thought through the token economic model. What is the ratio for various transactions. Is seven of this transaction equal to one of the other type? All of that has to be thought through

BLOCK TRIBUNE: What is your take on the SEC voided ICO on Munchee?

JASON GOLDBERG: We have taken great precautions to create a professional token sale for Simple Token and we sought legal opinions in 11 countries around the world. We really went out of our way to make sure that we established what the utility of Simple Token is. The first thing I would say is why do you need to be on a blockchain and what is it that you are doing with your token that couldn’t be done with fiat or points?

I have been a big proponent of increased regulation. And I also see an increasing number of token sales and the only purpose of those token sales is just to raise money. That is just an end-around around the equity and debt markets, and that’s not what tokens are for.

I think it’s good that the SEC is stepping in. It’s a positive development and I hope it weeds out a lot of projects that have no business of doing a token sale.

BLOCK TRIBUNE: Are you fully confident of the scaleability and security of ethereum?

JASON GOLDBERG: We very much believe in the confidence of our ethereum sidechain solution. We are big proponents and backers of ethereum, but a big part of the Simple Token solution. It basically replicates the value of ethereum, but not on a public ethereum.

BLOCK TRIBUNE: Somebody comes to you with an idea. How does your process work?

JASON GOLDBERG: Right now, we are still getting our act together. We’ve been flooded with companies and people. Some are established businesses that have a half-million users and want to get on a blockchain and say, “Can you help me?” Then we have a lot that are ideas and concepts. Some are really good, some are not. We’ve been inundated. We don’t require a white paper because our intent is that companies don’t need to think it through, but are starting to standardize what are key elements that any company launching needs to have in place.

We like to see that the project is not just looking to launch a token as a fundraising platform. We are not a fundraising platform. If you want to raise capital, that’s not us. It’s a jump start for your crypto-backed digital economy and we can help you go from zero to hero on that very quickly with tools that will scale. That’s one thing we always like to be clear – one of the biggest things is saying no – I say no every day to companies.

What we look for – we look at token economics. The team that has a solid concept and understanding about how the tokens can be earned, how customers can value the token, and when will the tokens be bought and who will buy the tokens.

A lot of projects think about giving away the tokens, but someone has to pay for it, and a really good token model thinks about where it makes sense to give away and they understand how the two things come together. We look at the decision point where the customer knows they need 100 of your token to accomplish what I need to get done.

I can either contribute my content or my experience to earn those 100 tokens over time, or I can take out my wallet and jump the line. When do people actually buy the tokens? If you don;t have people buying the tokens, that’s just free stuff. It can also be businesses buying the tokens, then will subsidize users. And so you either need a really good two-sided marketplace or B2C market. But the token economy is really the key thing.