Civic (CVC) Identity verification via the blockchain | ICO 21Jun
What is Civic?
Civic’s model allows for on-demand, secure and lower cost access to identity verification via the blockchain. Background and personal information verification checks may no longer need to be undertaken
from the ground up every time a new institution or application requires one. Civic already has a working identity verification product that is available worldwide Civic has won Best
New Startup award at the K(NO)W Identity Conference 2017. In order to embrace our vision of creating a truly decentralized identity ecosystem we now intend to launch a utility token known as the Civic Token (CVC)
Incentivizes only trustworthy Identity Verification (IDV) providers, for example, banks, utility companies, amongst many othe
These entities will be able to verify the attributes of the identity of an individual or business and attest to those attributes on a blockchain
Through the use of smart contracts, Validators will be able to price their identity verifications and offer them to other participants, resulting in a robust and decentralized identity verification ecosystem
Civic’s new ecosystem will reduce the overall cost of KYC, remove
inefficiencies, enhance security and privacy, greatly improve user
experience and disrupt the current identity verification supply chain.
Civic’s token (CVC)
Validators receive CVCs when other participants utilize their attestations to prove identities
Users receive CVCs for providing their data more securely and privately through the ecosystem
All categories of participants can utilize CVCs for identity-related products and services provided by Civic and third parties through the ecosystem
Civic (CVC) Token Sale Terms
1 Billion Tokens Issued
Maximum cap on crowdsale: $33 million
Total token supply: 1 billion (1,000,000,000) CVC, of which:
- 33% sold in the tokensale
- 33%retained by Civic
- 33%allocated for distribution to incentivize participation in the ecosystem
- 1% to cover tokensale costs
Ethereum ERC20 token
Purchase methods accepted: BTC and ETH
May 25 : Pre-announcement
June 21: Book building starts
July: Book building ends
August:Expected Start of Trading
Vinny is a serial entrepreneur who previously founded the digital gift card platform,
Gyft, which was acquired by First Data Corporation in 2014.
After over a decade of experience in e-commerce,
he realized that no-one had a universal solution to tackle identity fraud for consumers.
Jonathan has more than 15 years of experience in banking and
technology advisory. After a successful career in some of the most
complex and security sensitive environments, Jonathan brings his talent
for technology leadership, innovation and delivery to the world of
Co-founder and chairman of Bloq
Co-founder and CEO of Bloq
Juan Benet Founder, CEO at Protocol Labs, Inc.
Diego Gutiérrez Zaldívar
CEO & Co-founder at RSK Labs
Anthony Di Iorio
CEO & Founder at Jaxx and Decentral, Founder at Ethereum
Hacker, Researcher, Speaker, Entrepreneur, EEQJ, Inc.
Token Sale Advisors
Civic’s Core Value Proposition
Civic’s model is designed to allow for on-demand, secure, and lower cost access to IDV-related
services by exploiting the blockchain and related technologies. Civic intends to eliminate the
need for background and IDV checks relating to a specific individual to be undertaken from the
ground up each time a new institution or service requires the same checks.
Civic currently offers an IDV product that is available worldwide. Building on this record of
innovation, and in line with our vision of creating a truly decentralized identity ecosystem for IDV,
we now intend to launch a utility token known as the Civic Token or “ CVC .”
Civic’s innovative new ecosystem will be designed to incentivize participation by trustworthy IDV
providers known as “ Validators ,” who may include financial institutions, government entities, and
utility companies, among others. Validators will be able to verify the identity of an individual or
business, known as a “ User ,” and ‘stamp’ or record this approval on the blockchain in the form of
an attestation. Parties known as “ Service Providers ” who are seeking to verify the same
information about a given User, and who may include other Validators, would no longer need to
independently verify that information and could instead leverage the work already performed by
Civic intends for this kind of robust and decentralized IDV ecosystem to emerge through the use
of smart contracts, which will ideally be built on Rootstock1 (“ RSK ”). The smart contracts will
enable Validators to offer their attestations for sale to Service Providers (subject to obtaining the
User’s approval), and Service Providers to determine which Validators are offering attestations
and at what price. The smart contracts will also ensure that Users remain in complete control
over their PII, by requiring the User’s consent before the IDV transaction between the Validator
and the Service Provider can be completed.
Once the Validator, Service Provider and User all sign-off on the transaction, the Service
Provider will pay the Validator in CVC. The smart contract will allocate a set portion of the paid
CVC to the User to incentivize User participation in the ecosystem. Users will be able to use their
CVC to purchase identity-related services from Civic, including some or all of the services
currently available. Civic envisions that other service providers will also make their
identity-related products and services available through the ecosystem, and that Users will use
their CVC to utilize those third-party offerings as well.
In addition to the RSK smart contracts, the Civic ecosystem will also include Civic’s existing app
(through which Users will share their PII with chosen Validators and consent to transactions by
interacting with the smart contracts), and software to be developed by Civic through which
Validators and Service Providers will themselves be able to interact with the smart contracts.
While Civic will develop the initial smart contracts and software that will be available at launch,
the ecosystem will be open to third-party providers.
Allowing entities to sell their attestations but not the underlying data, would turn the IDV market
on its head. Entities who have invested heavily in IDV and Know Your Customer (or “ KYC ”)
processes and built large, verified User bases would be able to transform their once costly
activities (i.e., customer IDV and KYC) into revenue generators, all without selling or transferring
any customer PII.
Through this design, Civic aims to address the needs of:
● Service Providers, by lowering their costs of verifying the identity of an individual or entity
● Validators, by enabling them to recoup the costs of the identity verifications they perform
and the attestations they provide.
● Users, by granting them rights to view or amend, and control who has access to, their data
directly. The CVC that Users receive for participation will be reusable within the Civic
ecosystem to obtain other identity-related services from Civic or ecosystem participants.
● Governments, by allowing departments or agencies to rely upon each other’s attestations
of identity with the express consent of a User.
As designed, Civic’s new ecosystem is expected to reduce the overall costs and burden of
IDV-related diligence, including KYC checks, while simultaneously enhancing security and
privacy, thereby improving the user experience and disrupting the current market for such
The trend towards more extensive collection of personal information has become very prominent in the US recently, and has broadly been followed in almost every country. As a result of this global trend, the overall IDV sector is large and growing. This is in the context of a sharp rise in security breaches and data theft.
In 2016, 15.4 million adults in the United States were victims of identity fraud, 16% higher than in 2015. Victims suffered losses amounting to $16 billion, almost one billion dollars more than 2015.2
Globally, almost 1.1 billion identities were stolen in 2016, or nearly double the amount stolen in 2015.3
Key issues in the IDV market that make it the perfect target for disruption include:
The costs of data acquisition: the cost for financial institutions of on-boarding a single customer with full KYC diligence starts at approximately $15-20, despite the fact that the KYC process is very similar (if not identical) for most organizations, and is typically repeated every time a customer seeks to access a new product or service (e.g., opens another account or applies for a loan)
- Cultural factors: the trend to switch careers more often, as well as higher “churn” in consumer markets, makes individuals more likely to switch banks, credit card companies, or utility providers as new or more cost-efficient options become available.
- Privacy: privacy concerns arise whenever PII is stored. These concerns are heightened in light of the many high-profile hacks, leaks and thefts of PII in recent years, as well as regulatory and legal developments in many key jurisdictions around the world
The IDV industry has developed in response to this changing cultural and regulatory landscape
concerning personal data, and there are a number of service providers now offering easy API
access to multiple sources of consumer data for IDV. However, in many cases, companies are
paying high fees to verify the identity of an individual who may already have been verified
just hours ago by the same underlying third party provider (e.g., a credit reporting
agency), but for a different company.
A transformative solution would allow parties to easily prove that IDV information related to a
particular individual has been authenticated by a trusted institution without those parties having
to share any of that individual’s PII between them, hence maintaining the individual's privacy.
Ideally, the institution that paid a substantial cost to perform the initial verification would be
compensated with a small fee for providing this proof, thereby incentivizing both institutions to
participate. This lowers the overall cost of IDV, thereby disrupting the entire IDV supply
CVC is intended to act as a form of settlement between Validators and Service Providers within
the ecosystem, facilitating the reuse of previously attested data. CVC will also provide a means
to incentivize all participants, including Users, to contribute to the ecosystem. Moreover, Civic
anticipates that the ecosystem will develop such that Civic and third-party providers of identity
related products and services will utilize the platform to offer those products and services to
ecosystem participants (depending on their nature and use) in exchange for CVC.
Rapid growth of the Civic ecosystem in the early period after launch is desirable to build network
effect and to attract additional ecosystem participants. Civic will set aside approximately 33% of
all CVC tokens created in order to incentivize adoption. Certain early adopters who implement
Civic as an IDV solution and Users who sign up may receive free tokens, enabling them both to
pay some fees in CVC and to benefit from network effects brought about by greater adoption.
The vanity headline is not the goal: Introducing the Civic Token Sale
Today, at Civic, we’re releasing our much anticipated whitepaper, on our Token Sale page. We’ve done things a bit differently, but for very good reasons which I outline later in this post. We’ve decided to create a model for doing a token sale that is fair & innovative, and we hope others will follow in our footsteps. Before I delve straight in, I felt the need to identify an area of concern in the crypto ecosystem around how the current media attention to token sales are leading us down a path where we are no longer focusing on the goal, but instead following a narrative that is harmful to the ecosystem.
In the startup world, we’ve become very familiar with the term “Vanity Metrics”. In the crypto world, this is just beginning to rear it’s ugly head in a new format — “Vanity Headlines”. This is typical for a new industry that emerges — vanity headlines attract more clicks (aka clickbait) and this gets more pageviews and more people excited about where the industry is going. It stirs the imaginations of the readers, makes the impossible seem possible, and attempts to convert skeptics into believers.
The reality is that these headlines are very damaging and misleading to even some of the most educated in an industry. It sets the tone that the goal is to one up the previous headline. We’ve had token sales end in days, then hours, then minutes to now seconds in the past couple of months — with millions of dollars in crypto being exchanged. These headlines have gone from being misleading to becoming just outright lies.
The Gnosis token sale did not raise $312.8m. That was the value of the outstanding tokens, and the website indicated as much — the reality is that the website that published the story decided that writing a false headline because that would be better at attracting clicks than the truth.
The reality is that even if you look at the $12.5m in tokens that were sold, most of those were spoken for already in the pre-sale. The smaller buyers didn’t have a fair chance to buy tokens once the crowdsale went live.
What makes Civic different is that we believe in delivering the truth, transparency and always doing what’s right —we believe our values shouldn’t be relative. We have a strong sense of purpose, with our ultimate goal and mission being to change the world by creating a platform for democracy — with creating digital identities being just the very beginning of a long journey for us. When we decided to embark on doing a token sale, we decided to take the road less traveled and do what we believed would be a fair and inclusive token sale that would leave everyone feeling included.
Solving the Chicken & Egg Problem
Primarily, the problem we are trying to solve in doing a token sale for Civic is the proverbial chicken and egg problem. When trying to build a network effect business, you have the cold start problem: How do you get users if you don’t have companies on board, and if you don’t have companies on board, why would users use your service. By creating a token where the utility increases the larger the network becomes, the early participants in the network begin to benefit from enhanced network effects.
The opportunity to use a crypto token to build a network service is quickly being recognized. Civic is building an identity network which will connect companies and users and we’re creating 1bn tokens in order to achieve this goal. We’re selling 1/3 of the tokens via a token sale for $33m, 1/3 will be given away to companies and users to accelerate network growth, and 1/3 will remain in the company’s inventory. We believe this model will bridge the gap between having to buy users which are expensive in the beginning of creating a network and onboarding companies, eventually getting to the point where the incremental cost per user drops below the value that the network receives from each user.
This model only works if there is participation by thousands of users and hundreds of companies. In fact, this is counter to the way that many token sales are run today — where a few buyers dominate the landscape and buy the majority of the tokens from a crowd sale, preventing it from being truly community driven & supported network.
A better model for Token Sales
I don’t want to compare us to other token sales as everyone has different reason and logic, but I’m going to outline our terms of sale, to give some insight into our thinking:
We’re creating a fixed supply of 1 billion tokens. We are pricing them at $0.10 each. We felt that we needed enough tokens to power the smart contracting system for years to come and we could go to 2 decimal places for fractional smart contract execution. 1bn felt like the right number — no crazy scientific reason here.
We decided not to offer any discounts on tokens sold to anyone, pre-sale or during the crowdsale. Like any premium product, we felt that discounts cheapen the product and also gives certain buyers an advantage over others which we didn’t feel was fair. No discounts to anyone, not even friends and family.
The 1/3 of the tokens that Civic as a company will retain, will be available for sale only after 3 years, with 1/3 being released per year.
After we announced that we were doing a token sale and published the summary whitepaper, we received a ton of interest. It was very clear that we had hit a nerve and there was strong demand for our tokens. The goal for us to do a pre-sale was to ensure that we could place all 330m tokens — and we’re on track for that. Theoretically, all tokens could be sold in the pre-sale and we wouldn’t need to do a crowd sale — so what’s the point of doing one? We asked the same question but we had a different goal.
From a company perspective, if you can sell all your inventory to one or two buyers, it makes life a lot simpler — why hassle with hundreds or thousands of buyers if you don’t need to. Many companies have adopted this approach to “crowd sales” and sell their tokens out before it even goes to the “crowd”, resulting in highly concentrated holdings of tokens by a few hundred people/entities. To be fair, it’s never been easy to control who can buy your tokens. In the crypto world, it’s very easy to setup a bot or script and auto purchase multiple times, so how do you set a limit on purchases? This is also how we get wind up with these spectacular headlines showing how token sales are over in minutes or seconds.
Enter Civic. Our product is a digital identity service. We uniquely have the ability to ensure that each buyer is somewhat unique — so we decided to flip the model around and prevent big buyers from squeezing out smaller buyers. The pre-sale will allow us to ensure that all 330m tokens are spoken for, but we’re still going to allow smaller buyers to buy up to 110m of the 330m allocation because the bigger buyers are only guaranteed up to 66% of the purchase order they have requested. When the smaller buyers show up on the day the crowd sale goes live (21 June), using a Civic account will be required to allow them to purchase up to $25,000. This will ensure that we do not sell out in 30 seconds because of a few big buyers, and even smaller buyers can get access to the tokens during the crowd sale — and without discounts to either small or bigger buyers, which is an even playing field. Bigger buyers have been very supportive of this model, because they understand the value of distributed ownership of tokens in order to create and build network effects.
So, by design, we’re not going to sell out in 30 seconds and the smaller buyers, who have been emailing us, will all get a fair chance to own some of the tokens we are selling even if they just want to buy a few hundred dollars. If we sell all 110m tokens, then it’s a win-win, in that we will have a much broader base of supporters to help kickstart the network and we would have still sold all 330m tokens. If for some reason we don’t sell the full 110m allocation sold during the crowd sale, then the bigger buyers would have effectively agreed to buy the difference, so our goal of ensuring that all 330m tokens are sold will have been achieved.
We believe that this was the fairest way of creating a token sale — giving the little guy an even playing field with the big guys. The more people using Civic Tokens and Civic the better. We want broad adoption and support — and that’s really why we are doing the sale. We felt there was a better way. We’re not chasing vanity headlines, we’re chasing results and adoption. We believe there is a better way to conduct a token sale and we think we’re leading by example. In the future, we hope more companies will rely on Civic for identification of buyers, to ensure a broader ecosystem of token holders.
Thanks to Elizabeth Maria and Jonathan Smith.
Medium member since Mar 2017
Co-founder & CEO of Civic.com. Shark on Shark Tank South Africa. Born in South Africa, Lives in California. https://21.co/vinnylingham/