Swarmcity (SWT) - Business Hive Update 05.07.2017
by Bernd Lapp
TL;DR: This is what we do to create value for SWT
#AddTalent — We added more Developers to the Dev Hive
#SquashThemBugs — Iron out the issues of Boardwalk
#NeverStopImproving — Create a new user flow for Boardwalk
#PhysicalOutreach — Onboard more users
#SWT4Life — Use only SWT for compensation and bounty programs
Swarm City the platform is Live!
On June 15th the Dev Hive deployed the smart contract system called Boardwalk, which allows anyone to create requests on the Ethereum blockchain through a slick user interface.
A few days before the release I published my last blogpost and was hyped about the coming launch but also about the value of the token as I believed that people are really understanding what we are doing and that more people are ramping up their SWT accounts to interact with the platform.
The day after the launch truth hit me hard. Swarm City saw a classic “Buy the rumor, sell the News” phenomenon that investors know pretty well. It means that people use the rising interest created by a soon to come launch of a product and support the interest by “pumping” the value of the token. The SWT token had grown in value from 1.95 USD at the 1st of June, to an ATH of 6.25 USD on June 12th.Source: http://coinmarketcap.com/asset...
Once the product was launched, or even slightly before, people that had no interest in the platform itself but only in short term revenue, sold the tokens again. This made the value plunge almost overnight down to 4 USD.
In addition I have to admit that the product did not work as well as it did when we had tested it and therefore we saw a continued decline of the value over the rest of the time, even if it was slower.Source: http://coinmarketcap.com/asset...
Please ignore the crazy ups and downs around june 21st on the chart, which are mainly because Bittrex had some issues with an ICO, which resulted in a halt of all ERC20 Token trades on Bittrex.
On July 1st the valuation was at 2.21 USD, which is still an increase to June 1st, so from a net perspective we did gain some value with the release of Boardwalk, but I am still disappointed the value has not increased more.
Let me define why the value of the token is important.
To me there are two different motivations defining the value in a token.
One motivation is, that some people value a token (or a product) from a speculative point of view. They look at the possibility this product will be successful, but also look at the sentiment that other people have in regards to this product. Especially the sentiment makes it much more volatile and can change value just because an influencer voices his opinion on a product and others follow that sentiment (see Marc Cuban calling Bitcoin a Bubble and what happened to the BTC price).
I on the other side believe that value should come from usage and demand. If you have plenty of goods and nobody wants them, the price will drop so low that people will eventually buy it. On the opposite if you have a scarce good and a lot of people want it, you can set the price as high as the market accepts it. Swarm City has all mechanisms in place to become very valuable. The amount of the token is limited, making it at some point not as liquid as the market might need it, which leads to the token being broken down into smaller pieces. Basically every SWT consists of 1 quintillion pieces. I made a list of denominations, with Nematocera or short Nema (scientific name for Mosquito) being the smallest unit.
1 Quintillion Nema = 1 SWT
Besides being a scarce currency, the platform allows an ecosystem of products to be created that one day might benefit millions of users. The beauty about the platform concept is that every product only needs to have a small user base, as they all interact on the same platform. Exposing every new product immediately to the existing community and only adding their own user community.
Instead of having one Uber, we will have hundreds of tiny Ubers and hundreds of tiny BnBs and hundreds of tiny Amazons.
Basically what I am looking at are the amount of users we have and the amount of transactions they have on our platform. If we increase both, we will increase the value of the token in a sustainable way. Which will also reduce the volatility of the token, once a critical mass is reached.
With the release of Boardwalk we have not been able to significantly increase the amount of users or transactions.
Here are the Key Performance Indicators (KPI) that Boardwalk delivered so far:Time Frame June 15th to June 30th
Most important from a platform point of view is the growth of the SWT accounts and the number of active users in the hashtags.
This needs to be fostered much more.
What can be done to grow these numbers?
The basis for growth is a flawlessly working product. After the Dev Hive launched the product and realized that there are more bugs than expected and the platform will not see user adoption as hoped because of that, the core team quickly decided to change the production process to make sure the product is built in a more controlled way. The best way to do this and still continue to iron out bugs, was to add more talent to the Dev Hive.
Thanks to the vivid community and the great interest by developers already, we were able to identify great talent by simply looking at the commits made to our Github account. Luckily we did not just see talent, but they also showed interest to support us with their full capacity.
As of now we doubled our Dev Hive and have four new developers that complement our existing team and help keep the pace high.
In addition we will post some of the issues that have been identified as bounties on Swarm City, which will improve the platform when the issues are solved and in addition creates more activity on Swarm City, making it a place to #Jobhunt.
Matthew Carano already showed in the Dev Hive update that we are not only working on the issues that have been identified but are also updating the user flow. We are able to do this because having a live product out and getting feedback is very valuable for us. It gives us market research info on the live product which we immediately incorporate to the benefit of the user.
Another great way to grow the amount of users and transactions, is to reach out to much more people and show them the live product. I have done this recently in Switzerland already and I know that others like Cate, Ponggod and many more people in our Slack community are doing the same.
We will support anyone who wants to present Swarm City at events (like Meetups etc.) with a slide deck that can be used and if possible a core team member either visiting the event or calling in through Skype.
As you can imagine all of this takes time and effort. Especially the Dev Hive has accomplished something not many other projects have done. It only took them 7.5 months from Token offering to having a useable product out. The core team is a dedicated group of people that tries to lead this project until it can be sustainable and truly decentralized.
If you want to know who the core team is, please visit thisis.swarm.city to learn more about them.
How is the budget from the token offering spent?
Time and effort is not free. With the Ether raised from the token offering we have been able to come very far already and as of today still have more than 46’000 Ether left from the 77’000 Ether raised.
In the last few days a few people have raised interest in how we spend the Ether and also how the 16% tokens that have been allocated to the team have actually been distributed.
Let me start with the 16% first.
This is what the whitepaper stated:
The 8% called AC Legacy are broken down into:
2% (2M) of these tokens will compensate a large group of swarm participants and found- ers who contributed significantly to the progress of Arcade City over the past year. These tokens are immediately available and will be allocated proportionally to each person’s contributions, determined through community consensus after a series of group discussions led by the Vice Mayor.
1% (1M) of these tokens will compensate the Janitor, Vice Mayor, and City Manager. These tokens are subject to a period of illiquidity lasting 2 months. Following the holding period, they will vest for 10 months at 100,000 (10%) a month. These rules are programmed into a Smart Contract (TokenVesting.sol) and cannot be changed.
5% (5M) of these tokens will be released immediately after the token sale to current investor stakeholders who decide to ‘tokenize’ their current equity investment in Arcade City, Inc. Any excess tokens not allocated to investors will be redirected to the swarm/founders pool as described above.
We already paid out the 5% to the investor stakeholders, which is described in an earlier blogpost.
We also acknowledged the efforts of the original founder and he receives 31’750 ARC tokens (vested over a period of 10 months) which he recently exchanged immediately into SWT.
We still have 2% for future rewards and will spend them wisely to onboard new users.
The part we changed was that we combined the 6% for the Development team, the 2% for the swarm contributors and also the remaining 0.66% for the Vice Mayor and City Manager.
Now we had almost 9% Tokens available that we spread over 14 people that contributed to the success of Swarm City, based on the time they joined the project and the time they invested.
This lead to giving most of these tokens to the Sweat Investors (as we called the swarm contributors in that regards) who had not seen any compensation for up to one year’s work on the project.
The dev team which only joined 2 months before the token offering and myself (having joined in November) received the smallest amount of the tokens.
To be specific: I receive a total of 6’045 Tokens (0.06%) from the token sale, because I was the latest to join the project and had not invested as much sweat as anyone else. These tokens are vested over a period of ten months which started in February (2017) and ends in November (2017). In addition I did buy in the power hour of the token sale and converted them all into SWT. I still have them all!
The Ether held in a Multisig Wallet has been spent as follows:
Breaking it down: 1. Terminal
If we break the Budget down into the two releases, we have spent 20’059.68 Ether on creating the first release, called Terminal. The production took us around 4 Months.
We spent 3.5 months on the second release called Boardwalk and are still improving on it every day. Overall the budget we spent in that time frame is 9’502.50 Ether. Even though we managed to cut down on our Ether spending, through the rise of the value of ether, the amount converted in USD went through the roof. That happens when you stay in crypto, you have to live with volatility.
Here is the breakdown:
You can see running Budget in this spreadsheet
We believe in SWT!
In June we have changed the payout process. Instead of paying compensations in Ether, we are now paying in SWT. We have made that decision to attach the work and time we spend much more to the value we create.
The process is as follows: On the first of each month we take the exchange rate from Coinmarketcap. This is the basis for the amount of SWT a core member will receive. Payout will be on the 25th of each month. The time in between can be used to create as much value for the token as possible. Meaning that the USD value determining the amount of tokens on the 1st of the month, has increased, because the exchange rate has increased. Everyone receiving a compensation also accepts the risk that the value might drop and compensation (from a USD point of view) will be lower than expected.
As you can see we already have made a few changes again to create prosperity for the platform.
Disclaimer: I like to simplify things. Nothing written in my blog posts is scientifically researched and only reflects my personal point of view. I use naive logic and have come quite far doing so.