This is a live document and will be updated based on most recent information.
Due Diligence Report on SWARM
The following report is NOT intended as advice to purchase software. This report is presented for purely informational purposes. ALWAYS conduct your own due diligence before buying digital tokens associated with a software project during a crowdsale.
TLDR:
SWARM
http://www.swarmcorp.com/ is an open source project to build a “distributed incubator to help people fund their ideas” by issuing digitial tokens on top of protocols such as Counter Party and the Master Protocol (potentially more in the future, SWARM is platform agnostic). The current project client is built on top of Counter Party, however SWARM have announced plans to also integrate Master Protocol in the coming months. Their crowdsale starts June 17th at 12:00 a.m. midnight U.S. central time. The team is has the full technical stack covered. This will be one of the first front end interfaces to create digital tokens (though it does have competition in Coin Powers and other efforts) and relies on the Bitcoin Protocol and Counter Party to function. The price of the tokens will rise during the period of the crowdsale based on the volume of SWARM coins that are purchased with bitcoins. See
http://www.swarmcorp.com/ for details. BTC is the only currency accepted during the crowdsale.
View the SWARM Presentation and Q&A at the following link:
https://drive.google.com/file/d/0B0Ibqr7Y2XcNNlowMzNJZjkwT0U/edit?usp=sharingSummary
The SWARM project was founded by Joel Dietz to make issuing digital tokens as easy as the press of a button on a mobile app. The project decided to issue it own digital token in order to fuel development and acquisition of market share. The sale of these digital tokens known as SWARM begins June 17th at 12:00 a.m. midnight U.S. central as part of a crowdsale.
Crowdsale On June 17th at 12:00 midnight U.S. Central Time
A total of 100,000,000 SWARM Coins are available for sale during the crowdsale event which runs for a period of 33 days until July 20th or until the total number of SWARM Coins is sold.
The pricing of the SWARM tokens is determined based on the volume that is sold. Specifically SWARM is selling SWARM Coins at a rate of 5,250 SWARM coins per bitcoin the participant sends in. This rate of SWARM declines the more bitcoin are collected until four thousand BTC are collected and the price increases to 4,250 SWARM per bitcoin. This generation process could continue all the way until twenty one thousand bitcoin are collected and the generation rate falls to 3,750 SWARM per bitcoin.
Details found at:
http://www.swarmcorp.com/It is worth noting that the SWARM team does not expect to collect the maximum number of bitcoins by selling out all of their tokens (though it is possible if demand has been underestimated). Instead, the project has set a range of price points and is leaving it up to the market to decide the proper price of SWARM Coins. If the market decides this projects is highly valued, than the price of the coins will reach a higher level during the crowdsale. Conversely, if the market decides that this projects is not as highly valued, than the price of the coins will not rise as high during the crowdsale. Either way the pricing of these tokens is for the market to determine.
Team
The co-founders of SWARM (Joel Dietz and Jef Cavens) are both located in Berlin, Germany at the moment though both are originally from the U.S. and often reside in Palo Alto. Joel’s focus on is the back end of the application and Jef is focused on the design aspects of the application. Here I will highlights from their back grounds.
Joel Dietz (
www.linkedin.com/in/joeldietz)
Educated at Brown, Joel has spent the last seven years in a variety of positions from software developer to startup entrepreneur. He has made many contributions to the Bitcoin community the past several years as part of projects ranging from Master Protocol to Ethereum. Now with a focus on Bitcoin 2.0 technologies.
Jef Cavens (
www.linkedin.com/in/thomasverhoye)
Jef has spent the past 14 years in different design and creative roles in the software space. His strong design influence is felt in the presentations, application wire frames and websites that SWARM has already produced.
Economics
The utility of SWARM is based on the charging of a fee to users in order to issue their digital tokens. This fee is taken in the form of a small percentage of the digital tokens issued by the user (around 2%, subject to change) at the time they are generated. This fee is then sent to different parties. 1% of the fee to all the holders of SWARM coins. 1% to the SWARM Foundation.
While this fee provides a great deal of utility to the holders of SWARM, it also makes the protocol more vulnerable to the risk of folking and alternative versions of the project emerging that don’t charge a fee. If the market will accept this fee remains to be seen, though for perspective it is less than half of the fee that current incubators such as 500 startups and Y Combinator charge (typically 6% or more).
Technical Description
The creation of the SWARM clients is not technically difficult in the sense that they do not have to research or provide any new cryptographic proofs for the functioning of the system. Instead, the system relies on the existing Bitcoin and Counter Party for its basic functions and transfer of value.
Challenges
There are a number of existing incubators such as 500 Startups and Y Combinator, and platforms such as Angel List that offer projects an ability to raise development funding for their ideas. While today, these services are centralized and use legacy financial models, if these competitors were to begin embracing crypto currency and change their models to that of open source, they would be tough competition for SWARM. Depending on how much network size effect the SWARM project is able to gain before its competitors adopt the same or similar model will largely determine its success.
There are also new entrants into the this space including Coin Powers, which are using the Counter Party and Master Protocols in order to provide functionality very similar to that of SWARM and will be competing for similar users. Again, the speed at which the SWARM team can move developmentally and to grab market share is likely to have a dramatic impact on how successful their project is.
