Bitcoin Forum

For Investors: The Economics of RootProject’s Token
Pre-ICO closes July 28


The author, Dr. Nicholas Adams Judge, is a political economist and cofounder of RootProject. The other cofounder is Chris Place, a Y Combinator Fellow. Their nonprofit’s pre-ICO, which carries a 50% bonus, just passed 203% of its goal. The cofounders are taking zero tokens and no compensation beyond a reasonable salary.

RootProject’s pre-ICO is ending in two days. Formally organized the Friday before it launched, it was a purely grassroots crowdsale, intended to raise funds for the exceptional legal complexities of wedding a Swiss-based token-administering foundation with an American on-the-ground nonprofit.

We have more than doubled our pre-ICO goal, in a difficult Ether market, and built a slack team of over a thousand people. Now it is time to reach out to more established investors for the actual ICO — though of course we hope the grassroots attention and investment will carry over to the ICO. The talk thus far has been about the social impact of RootProject. Now let’s focus on the asset itself.

While Chris, myself and our friend Dr. Melissa Mahoney came up with the ideas behind RootProject, as a political economist whose dissertation focused on models used in currency markets, the design of the crypto asset itself was left up to me.

Beyond my quantitative research, I also worked under Berkeley economist Professor Emeritus Jack Letiche, whose work on foreign exchange models and first-hand war stories about some of the currency crises of the twentieth century gave invaluable insight into how to interact with markets in order to preserve value.

A technical whitepaper on the design of the crypto asset, the ROOTS token, will be published for quantitatively sophisticated investors before the ICO. However, the below conceptual sketch conveys in simple language what every potential investor should know.

Time to Get Serious About Liquid Markets
It’s impossible to predict with a high level of certainty how markets will greet a new asset, let alone a crypto asset. However, asset design can be optimized, down to great detail, to endow it with the qualities sophisticated investors look for — something not being done by nearly all cryptocurrency-issuing companies thus far.

There are brilliant people making incredible products and services in the crypto space. It is important to be honest, though: This is the first time that a group of 20 year-olds can launch an asset that interacts with liquid markets before they have gone through the professionalizing process of building a company up to the IPO stage.

The learning curve has not been pretty, and much needless value destruction has taken place — both for investors and cryptocurrency-issuing companies.

Value generation in the crypto space will accelerate as asset design best practices become standard — and as companies learn to communicate to investors effectively. RootProject will work with other organizations during its ICO to standardize these best practices.


The Basics of RootProject
If you are not already familiar with RootProject, our whitepaper  (https://docs.wixstatic.com/ugd/0dc025_1046c5bd7791445bbc77e7a30dd85992.pdf)describes it thoroughly. The website (http://rootproject.co/), of course, contains useful information, and the one-pager (https://docs.wixstatic.com/ugd/0dc025_34b608837ad94063ba3a390f95caa8f8.pdf) provides a brief summary.


Two Key Design Objectives
ROOTS tokens are designed with two objectives in mind.

• To create a virtuous growth cycle that links asset value and institutional growth (while sheltering the institution from downward shocks to the asset’s price by holding several years’ operating budget in USD).
• To reduce volatility and correlations with the crypto assets that we expect to be held in the same investor portfolios as ROOTS tokens.

The Virtuous Growth Cycle
Growth is achieved by funneling demand from crowdfunded projects into a feedback loop that links organizational growth and asset value. You can read more about our feedback loop here (https://medium.com/@nickadamsjudge/youve-missed-the-most-important-part-of-cryptocurrencies-4f7ee5b9f1a1).

Demand for tokens comes from three main sources.

• The crowdfunding fee — that is, the 10% fee on donations to particular projects — is used to purchase tokens on the open market.
• The pension fund contribution — funded like the rest of the project budget, from the crowdfunded donations to a particular project— is also made in the form of ROOTS tokens that are purchased on the open market.
• Large deals with institutional donors — either seeking positive PR or to do social good — involve a small portion of dollars going to the purchase and burn of tokens.

While demand for ROOTS is increased, supply is strictly hard capped. The majority of supply is not released for over half a decade. During and after that time, a substantial portion of ROOTS will be burned.

In short, while one can never predict with certainty future price movements, ROOTS tokens are designed to enjoy increasing demand and reducing supply.

During the pre-ICO, some unprofessional investors have voiced worry that creating an explicit set of linkages between organization size and efficacy and crypto asset value amounts to a ‘Ponzi scheme.’ Two responses are appropriate.

First, their debate is with various Nobel-winning economists or political economists, not Rootproject, whose design is a simple extension of their work into the crypto space. Laureates Elinor Ostrom and Clive Granger are useful examples, among others.

Next, markets establish links between asset value and institutional size and efficacy, whether crypto asset-issuers like it or not. By centering these links around formal organizational rules-based relationships, uncertainty is reduced, creating risk-adjusted value for investors and program participants.

Volatility and Correlations
The second design objective of the ROOTS token is to reduce volatility and correlations with the crypto assets that we expect to be held in the same investor portfolios as ROOTS tokens. This is done by tying market price — as much as is possible — to underlying, predictable token supply and token demand variables.

If the market price strays too far from the published equilibrium price, our real-time data publication and modeling will aid quantitative investors in pushing the price back to the equilibrium.

Because of known difficulties in models of equilibrium price, RootProject’s published data will greatly ease the modeling process, encouraging investor adoption of appropriate models.

This ease of use should also increase ROOTS liquidity, as automated trading strategies will be easy to build, and thus sellers will be able to find buyers with greater ease.

Conclusion
ROOTS tokens are simple assets. Only several rules link their expected future price to the nonprofit institution’s activities: Crowdfunding fees, pension funds payments and negotiated large donor deals.

Even very modest scaling of the crowdfunding platform — say, $10 million raised in a year, as opposed to Kickstarter’s $600 million last year — will lead to substantial, sustained liquid supply reduction of ROOTS tokens on the market.

Because RootProject combines a crypto asset with the very basics of institutional economics and financial econometrics, a new phase in the maturation of the crypto asset space can begin.


Disclaimer: All investing is risky, and cryptocurrency markets are an exceptionally volatile asset space. Never invest with assets you are not willing to lose.

Not only it's tax subsidized, but because their operations in US is non-profit driven without issuing any recurring income to investors, SEC won't take action.

Also for once there's a potential charity that is also a high risk and high reward investment with steady gains on the currency value over time.

The team is very engaging and responsive on Slack.  Great positive impressions so far.

It looks like we have to wait for more information about this token project, in fact its roadmap is good, just we'll see if this token will be good, like the plan of this project. I will ask permission to bookmark first

Yep, bookmarking it for the September main ICO. I think that the whitepaper wrote about pilot projects in Albuquerque, New Mexico. Those projects do not use any crypto currency. Am I correct to assume that the Albuquerque program was used as an inspiration for RootProject?

Also, another thing. RootProjects claims to have found a name that alligns the interests of investors and the poor. Could your team provide other examples of concepts, that have done same thing?

I sincerely believe ROOTPROJECT will be killing more 'birds' than one. Not only the displaced and impoverished get to live a more dignified life that will help boost their self-confidence and feeling useful and a part of society again but donors and 'helpers' will get the tax breaks as well, which is clearly a win win for all parties involved.
Another area that this project will help in is to give crypto and blockchain tech a good name as more often than not, outsiders often think of Bitcoin or Altcoin technology being associated with criminality at large. When I say to them that criminals have been using FIAT for centuries they start thinking differently.

Pre-ICO will end soon, there are only 2 hours left before it ends. The project has already collected 1200 ETH, which is more than twice as much as they expected. Based on these figures, we can say with confidence that the project is becoming known, popular. Let's see how the ICO will end. But I think it will be successful as well.

Thank you and the crypto community!  Together, just three weeks after we put our work out to the community, we have,
 
- raised 1300.46 Ether, 260% of our Pre-ICO goal
 
- put together a 1000+ person Slack Team

- continued development and made our first hires

- begun work on the legal documents and preparing for our Sept 5th ICO!  
​
Check Back here on Monday for further details.

Regards,
Nick

Thanks again to everyone!  With ether's appreciation back to normal price levels, we're above 300k, our initial hard cap.  Very exciting things will start happening regularly, and we are excited to be working with this initial slack team and all our initial contributors as things really get going in the ICO.  The response in person has been even more impressive than online.  We're going to be able to help a lot of people with this. 

Thanks again,
Nick

What I have emphasized in bold for me is very important, is one of the reasons because I decided to take part in this project! Keep it up!!

Some Big Announcements for RootProject! Partnerships, MVP, Korea, Start Date. More information here: https://medium.com/@nickadamsjudge/some-big-announcements-for-rootproject-ad21d91eed75 . We’re keeping the ICO end date the same, the 6th of October, 2017. But we’re changing the ICO start date to the 26th of September.

The ICO had been started, so will you open some bounties during the ICO phase?

Do you have an official instagram?

Hey guys! Could I find out the date of ICO? You have a really cool project, and I would like to invest in it a little.

And really, when ICO starts?

btw the idea is great!

What I know of ICO starts on 5th September and will end on 26th September. I found it on the main page of Announcement root project.
is there a schedule change?
I also do not know how many tokens are sold. because in the website https://www.rootproject.co/ no information about token sales.

Is the medium about going to Korea?

Hello everyone, I just took a look at your new site. Very cool! It's nice to see how the project develops!

Yes, the designer has made a great job, especially I liked fonts, and in general everything looks beautiful and luxurious

I took a look at the interview and I can say that it's very interesting. It would be a good idea to make a separate live webcast in question-and-answer format on your youtube channel.

Have you seen the news about Japan??

What's there?

They will launch their own cryptocurrency, and actually it would be the national one. The pegging to japanese yen will be 1:1. The projects like this might be easier to achieve.

Root Project will be started on the territory of USA in testing mode, and cryptocurrency is unforeseeable there yet.

Why do you think so? Did you mean that transactions would be cheaper?

Idea is really nice, but I see a lot of burocratic problems for tax deduction....how you can guarantee this in all the nations?
There are huge difference in everty single nation...

Anyway I'll keep an eye on this project, idea is really good....

Yeah! This ICO-hating virus is transmitted through airborne droplets. Already waiting for prohibit in Vietnam and Mongolia ;D ;D ;D

The main thing is not happend in Japan yet ! I'm waiting for national cryptocurrency...

I think this is the state's attempt to control cryptocurrency. To nationalize idea and don’t let private currencies to grow.

Oh… Conspiracy :) Anarcho-capitalists came.

Well, I do not know, for me it's extremes. I hope that cryptocurrencies will destroy all the separations and globalism will win some day.

Tired with the borders? :))

Damn! South Korea prohibit ICO, I was hoping thah only China can go this way.  :( :(

Everybody laughed at Korea and today they trying to hack it. Karma for closing ICO :) lol

Same old story, it’s hard to resolve the issue of hacking.

You can’t resolve it. Cause it profitable for all parties. You should buy defence to protect your information. You will read news about it, and work on new ways to hack.

Yeap, you right 🙂 but the fact is that thanks to that we become better, intellectually.

It’s funny that in the beginning everybody thought that blockchain is unhackable :)

And it don’t hacked yet. They use stupid users and hacked their PCs.

Yeap, skynet will win! :)

Any bounty??

Skynet is good, but possibility of  hack also exists.There are two ways: accept this or go into the woods :) lol

Lol you should stop watching Mr. Robot :) I have a question about the project. How do you think does the small projects will be popular in this platform?

I think so, this platform made for this. The point is to give people in difficult situation possibility to develop. It’s not depend on size of project.

But there is a chance that it will not work...

Oh, did anyone see the news that Japan had decided to follow the path of Taiwan. And totally allows the crypto.

It would be even cooler if the US government got such a great thought into its mind! The project is aimed at the US initially, I must notice.

What a pity that in my country the platform won't work! At least, it'll help people below poverty in the US. Keep on, guys!

Yeah, I hope that they'll spread their platform around the globe.

 I hope so. Eg, every day I see a homeless man near my home gathering litter to earn some money. But I'm pretty sure that it's too small for the living! I talked to him somedays and he's quite a good person but had an unlucky situation.

Hello! I saw your project for the first time. Got a question:
What is the reason for such a long time interval between pre-ICO and ICO?
Thanks

It would be even cooler if the US government got such a great thought into its mind! The project is aimed at the US initially, I must notice.

This is exactly what RootProject solves! Poor people can find a temporary employment and then recover from poverty. Obviously, if a person is responsible and not a full drunkard.

I don't think so. What happened to him was bad luck.

Good question, I think foremost thing not be indifferent. ‘Cause  each of us  can help them !

So what about places, where are much more than one  needy?

There are more usual people maybe?

Very interesting concept Sir. good luck!

Thank you ! We do our best to achieve the eradication of poverty.

I do not understand why I need to reanimate the dead? I've been seeing this project since June and every time it tries to do something that is beyond its strength. If the project were really useful, then it would worthily sell it.

People very often underestimate how important things are that change the world.

Sharp's the word! History has shown  that you're right.

Above all for team to remain confident and go all the way.

I follow the bounty twitter of the project but until now I did not get the token of the project please explanation either from dev or project team developer

Which is the main reason to postponed the ICO? Pre-ICO is still running?

I'm a bit confused with all this canghes

I guess it's better that way.  :)

 It would be better to settle that question of term without further delay, but you never know how soon you can raise enough money.

Pre-ICO is finished.

Here is Nicholas's Adams Judge Medium

https://hackernoon.com/introducing-the-rootproject-crowdfunding-platform-the-roots-token-design-and-a-new-ico-date-14f9f4a7f75b

It gonna make all clear.

:) Looks good, but in my opinion, charity on blockchain is a complete nonsense! :o

more confusing, for me, is the fact that money are eligible through ICO, than the fact about charity at blockchain

But I think that it's brilliant. Just think how convinient it is. And anyone can even with a small number of resources to help the needy, while at the same time still get a profit! Anyone even with a small number of resources  could  help those in need, and at the same time  get a profit!

I think, that people are attracted to something new in this area.

But is it bad? The market is developing.

I agree with you. And the sphere is dumped due to this.

But it's not for a long time. Soon the wave of hype will fall and the market will  diminish significantly

oh I though this project ended already, it's still a month till your ICO round. I will wait for team update and follow their Roadmap step by step

But this wouldn't  affect  high-quality projects. For example, companies with a strong reputation and audience.

New Nicholas Adams Judge's medium article: https://medium.com/@nickadamsjudge/cryptofixesthings-10f25a8d6a14

It's nice to see,  I'm not the only one, who liked it!  ;)

Guys! What are latest news?

Tune in Facebook to find out.  ;)
https://www.facebook.com/rootprojectco/

or twitter https://twitter.com/RootProjectCo

:) MVP is cool, i've just tested it out!  :)

yeah, me too. I hope to see more projects

Now, everyone can propose a project  ;D

I’m thinking on one… I want to propose it soon

Well. I’ll check on updates

I’ll try to post a project soon. It will be connected with poor children. The project should help them get the education.

Yeah, helping kids is important

Children are our future. Me personally, I can’t step away when I see a hungry kid.

Neither do I. I contribute to the community in my country, which provides poor or homeless children with food, clothes. But the community is lack of funds…

it’s cool that you help kids so much. I wish I could contribute as well to your community

here comes RootProject. It’ll be launched in some countries but then worldwidely.

I would personally start a project in children's care. There are not too much communities and I’m afraid to contribute to global organizations, because I don’t believe that all funds are going to the initial recipients.

that’s the problem for me too. I don’t trust authorities in my country and can’t wait more to full release of the platform

Where are news? I haven’t heard about the project so far

probably, they are preparing smth really cool

why do you know?

I do like your concept and hope this project will be a success!

they’ve already released the MVP. and crowdfunding is going well

I think, there is no point to be afraid. These guys were doing well for a long run. I believe everything will be okay.

hope so. I’ve already donated to some of the projects

New update by the team:

https://medium.com/@nickadamsjudge/some-rootproject-announcements-6c4c7c04af0d

New update by the team:

https://medium.com/@nickadamsjudge/some-rootproject-announcements-6c4c7c04af0d

"we have to push our ICO back to January"

You did it again!!! Another delay.. ICO postponed to January! That's a 2 months delay! These continuous delays could spatially (and not a little) investors. I hope you have considered it

After months of silence, 4 positive BOT posts in 24 hrs. This is powered entirely by bounties. What a scam.

You forgot something  ;)

Be careful, make the right considerations before investing in this project. I think it might end badly.

After months of silence, 4 positive posts in 24 hrs. This is powered entirely by bounties. What a scam.

The ICO had been started, so will you open some bounties during the ICO phase?

the project was highly anticipated and extremely interesting, definitely a lot of investors who want to invest for this project.

When in january is the ICO going to take place?

What is ICO hardcap\softcap details?

hi sir whether the project is stiil running or already done? thanks

is this crowsale finished? i follow this ico very long there is good or bad news .

Hey! There are only good news - check the announcement about our new advisors. TenX and QuantStamp people :)

https://medium.com/@nickadamsjudge/the-advisers-structuring-rootprojects-ico-27a1929f07a9

okay, that's great news with a great team composition I ask when crowsale is about to start i see from last few months always delayed?

when the date will be announced the official start of token sales ? a lot of good news,but still we need a start date

Dates will be announced during the World Economic Summit in Davos, which Nick (CEO) will be attending

I would like to know your opinion on the legalization of crypto payments at the state level and how do you think about the possibility of any serious blockade or something like that by powerful countries? (The newest example, South Korea and the ban of ICO in China)

Nice to see new advisors on board. Both from vs

Yeah means solid validation for the project

Top stuff, congrats!

Awesome news! RootProject co-founder joins The Bureau Blockchain Incubator as partner! http://markets.siliconinvestor.com/siliconinvestor/news/read/35642573

anyone heard RootProject a CEO joined a 30m crypto hedge fund? Looks good for the ico

Weren't we supposed to get ICO dates?

 
ICO date should be annouced in the next 24 hours if not already announced as stated on the telegram group some hours back. It has been a tireless work for the team and resilient attitude to keep the project going. I wish them all the best

ICO was cancelled. Sorry everyone.

Anton could you please tell what is current state of the RootProject's ICO and the bounty?

I use blockfolio and I see ROOTS already available in hitbtc and idex, is that correct?
Can I trade it there?

Idex yes, and probably etherdelta as well. Not sure about hitbtc, I would generally recommend against using these centralized exchanges. They are also expensive to move funds to and from.

According to the Bounty thread, the campaign is over, they are calculating the stakes and the distribution will be in 3 weeks. Let's wait. ;)

On Etherdelta
https://etherdelta.com/#0xb39573edc34b3da6c836a59fe6375155d804e492-ETH (https://etherdelta.com/#0xb39573edc34b3da6c836a59fe6375155d804e492-ETH)

The transaction fee is said to had increased a moment before the bounty distribution that's why the bounty token had not been distributed. Now waiting until the fee reduces

indeed when will the distribution be done do you know? I think the root project has long disappeared and there is no continuation so I forget this for a long time.

this is project long trend and I just realized it   :o :o good this is project star 2017 distribution ROOTS tokens will be distributed to purchasers April 20, 2018. Reserve your place on the whitelist here.  :o and I expect the price token up 1000% after entering the exchange  ;D 8)

indeed when will the distribution be done do you know? I think the root project has long disappeared and there is no continuation so I forget this for a long time.

You're right. "Project" will soon be a year (the theme was created in July 2017), and any progress is not visible. Did the ICO ever take place? Collected the minimum amount? Or is it another stillborn project?

ICO results available here: https://etherscan.io/address/0xf75E3e8D275146157b8e0E540542aDceEcCbb349

You can now buy/sell Roots at tokenjar.io

Come on, why should it be listed in the tokenjar? Are there no other exchanges? I see no trading volume there and buy order is also low. I hope ROOTS can be immediately registered in other exchanges.

is it audible at the stock exchanges?)
it is good of course that the bounties were paid after so much waiting - but what to do with tokens now)

what to do now is just wait until Root is listed on the main exchange and run their roadmap, as it is very sad to see the current token price in Tokenjar exchange very far from expectations.

Roots can be bought/sold at tokenjar.io. That's the only exchange because they are a ERC223 token.

This is the problem with many projects nowadays. They do their own thing, collect a ton of money form ICOS investors but when it comes to exchanges they deliver poorly and then the tokens are just rendered useless. I really do hope that they make an effort to provide some exchanges for liquidity for the investors who wish to trade it. Am not knocking the project but we do need to see more effort from Teams who collect a lot of money from ICOS.

Hi everyone, is there any chance to get passive income just by holding ROOT tokens? This function could help to facilitate demand for ROOTS, I suppose. Anyway, this bear market will eat a lot of projects. Hope Root will survive.

Hi! No. The commission generated is likely to be too low to distribute anything significant to token holders, plus it would be an issue in terms of not making ROOTS a security. What really creates demand is the need for ROOTS purchases by newly-funded projects (fundraising commission, pension fund contributions). Also, the plan is locking the commission for a number of years and giving it back to the nonprofit that is fundraising (often RP's own operating nonprofit), which wouldn't be possible if the commission was paid out to ROOTS holders.

The team did not raise enough fund at the ICO and they did not also reveal how much they raise. It was just obvious through the account displayed for ICO that very few coin were dispatched at ICO. Most of the money was raised in Asia not on internet. There is a lot of problems with projects from USA with so much restriction by laws that hinder investors early benefits. The team had recruited some professionals and all members on telegram forum are regularly updated on project's developments

The Lagos Campaign: Blockchain Education in Nigeria https://medium.com/rootproject/the-lagos-campaign-blockchain-education-in-nigeria-260832961557
RootProject is partnering with ParallelScore to raise funds to develop a blockchain school in Lagos, Nigeria. 20 local students will receive full-tuition scholarships to attend the first course, slated to begin in spring of 2019.

Wondering where all your money went? It went to fund a separate venture that doesn't even acknowledge any affiliation with Rootproject, judgeresearch.co.  They claimed they were working on ROOTS, but they were just misappropriating funds for this separate venture.

Wondering where all your money went? It went to fund a separate venture that doesn't even acknowledge any affiliation with Rootproject, judgeresearch.co.  They claimed they were working on ROOTS, but they were just misappropriating funds for this separate venture.

Also, Nicholas Judge is claiming that they're out of funds, but all of the funds collected in the ICO is still located here: https://etherscan.io/address/0xd4f39ed7499097a35dccdc59eabad25ce6a6c150#internaltx . He's just hoping to treat it as his personal piggy bank once the value of eth rises again.

This eth should have been returned to investors long ago.

Also, Nicholas Judge is claiming that they're out of funds, but all of the funds collected in the ICO is still located here: https://etherscan.io/address/0xd4f39ed7499097a35dccdc59eabad25ce6a6c150#internaltx . He's just hoping to treat it as his personal piggy bank once the value of eth rises again.

This eth should have been returned to investors long ago.

is it possible that he is short of money to repay and the funds are lacking and if it is like that for personal gain can it just be frozen forever because it is most likely never to be returned to investors