It has been a few months since our last update, and we wanted to let you know a Dispatch is coming within the next few weeks. We decided to wait until we had the “ok” to make a few big announcements, and we promise it will be worth the wait. Until then, we received some questions from a ShipChain community member, so Lee and I were glad to be able to put together some detailed responses and present them here on the blog to clear up any misconceptions. Some of the questions were around the token itself, and others around business operations. We answered everything to the best of our abilities, and we hope that this Q&A will help provide some insight into what our plans are for the token, future partnerships, and the overall platform.
What will a transaction on the sidechain actually cost? And would this be a fixed amount or would this be variable? What are the economics like?
The short answer is that Sidechain transactions will be variably priced. The mechanics are quite complicated and nothing has been fully finalized yet, but currently the best example of how it all works can be seen in the live Loom PlasmaChain network — dApp developers pay monthly fees in the native token (SHIP on our chain, Loom token on PlasmaChain) to a variably-priced Smart Contract and they receive Karma to distribute to their users, which is used like gas as a rate limiter. In the future, a fee market for governing the price of Karma is a possible evolution, but at first, the ShipChain Foundation will set the rates.
In the near future, we’d like to keep the Karma/”Gas” system as first-order payment for computational complexity, but also introduce a system of flat fees (on top of “gas costs”) for things that have real-world value (e.g. perhaps “25 SHIP per Shipment Tracked” or “5 SHIP per pallet”) because we don’t want the cost of supporting the network to simply become a race-to-the-bottom in a fee market for computing power; if a large amount of “real world value” is transacting on the sidechain, we believe that the fees the network charges should fairly reflect it.
How many tokens are yet to be distributed under lock-up period? How many does ShipChain still hold and which exact proportion will be allocated to the sidechain (or what is the planned decision)?
First off, a blog post is already written and waiting for approval explaining the future of the remaining tokens, and how they will be used to support the ecosystem.
Second, effectively all committed tokens are about 85% distributed and will be sent out over the coming months. The company is currently holding 50mm tokens, plus the 65mm Driver Rewards pool, and there is still an unallocated remainder of 125mm tokens that were designated for Sale 2/Airdrop/Etc; we’re announcing how we’ll put them to good use very soon.
Finally, as a matter of transparency, some of the original designated wallets were used for different distribution portions as we began transfers, however, the total sums do remain fully accurate despite this.
In regards to current and past partnerships, when will the heavy NDAs be lifted?
I’d love for it to be sooner rather than later of course, but I can’t make any guarantees quite yet. A lot of these large enterprises have slow processes to protect them, so bear with us as we work with them. We are excited about being a part of the World Economic Forum Blockchain in Supply Chain group as well as our inclusion in Plug and Play, and will continue to work with both and expect new partnerships and more from them.
How many customers are already signed up?
Currently, it’s the same as above regarding NDAs – but we will say there are live customers, and they are tracking various commodities including food and high-value goods, some of which have come from existing announced partners expanding and bringing it to their customers as well. Additionally, we expect to have some new partnerships that add value to the network and data quality itself that we can announce very soon. We are also is in the process of responding to several government Requests for Proposal regarding blockchain and supply chains, and will be focusing strongly on providing solutions to governments to improve their supply chains.
Are there any blockchain platforms that your team is keeping an eye on and if so, why?
We are well-informed in the space, and we seriously consider all our options when it comes to choosing platforms to develop on. We’re very satisfied with our original choice to build contracts for the EVM, and to be launching our sidechain on Loom.
Can you share some feedback outside companies had on the recent webinar?
Absolutely. The content was strong, and it has generated interest from big players in the food space. We really enjoyed getting to know our guests and felt they contributed significantly to making it the success that it was. People are finally starting to get more comfortable with the idea of blockchain, but there’s still a technology hurdle to overcome for many – a recent study by SupplyChain247 found that 25% of shippers still have no TMS or software, and are doing manual processes. Future webinars will also discuss how to make the digital transformation for shippers much less daunting.
What challenges are you and your team facing while implementing growth and industry adoption?
There’s a mentality shift required for many organizations. Data privacy is an enormous concern for Enterprise, for both internal reasons and regulatory compliance reasons (i.e., GDPR, HIPAA, etc.). As such, they tend to be extremely cautious, and when dealing with public blockchains, they recoil when they hear the word “public.” We’re working to educate them that public chain does not mean all data is public; in fact, it typically means the opposite and that their data is more protected. This is a battle we will continue to fight until Enterprise at large starts to understand the reality behind what public blockchains are for themselves. We’re grateful to see that mindset shift is already taking place in some organizations, both in our personal experiences and in seeing companies like EY commit to public Ethereum usage.
Who do you view as direct competition, and who do you think will be first with a live product?
TradeLens/IBM, quite honestly. That said, TradeLens is focusing primarily on Maritime, which we see as an opportunity as it means that intermodal cargo needs a home, and we’re happy to provide it.
In terms of the public blockchain ecosystem, it’s far too early to call people competitors. We’re all still developing new, cutting edge stuff, and it’s hard to see where each of us sit – and with open source being a part of it, we all collaboratively benefit each other even though some supporters and companies may see us as competitors. Really, we invite everyone to build on our sidechain – regardless of if there’s competitive overlap or not. It further decentralizes everything, and only strengthens the sidechain itself for logistics activities.
Would ShipChain consider relocating offices to a U.S. state that has already adopted local laws ruling out ICO utility tokens from being securities?
We’re pretty comfortable with our current offices and the majority of our team in South Carolina for now. That being said, the Foundation we are working on will be located in Switzerland for various reasons. We feel the neutral jurisdiction and openness to public blockchain technology will genuinely foster a collaborative and open source environment.
Are all the Shipchain employees listed on the website? How many contractors are there on top of those employees?
No, they are not all listed as some have requested to maintain their privacy and we would like to respect that. Contractors will fluctuate based on what is going on at the time.
How frequently do you meet or contact your advisors what can you share about those interactions?
Pretty often overall, and some more than others. They’ve all been very helpful in guiding product development for both the commercial and open source side of things, even just as a sounding board, and having their experience in the industry from multiple angles available to us. Roger and Kevin, for instance, have been invaluable in providing both the view from the forwarder’s perspective and the view from the product purchaser’s perspective.
What are the next milestones ahead on the development board between now and mainnet in the Engine project?
First, we need to make it Loom compatible (v1.2, coming soon), and we’ve already started work on v1.5 which will expand the capabilities of Vaults to begin storing more kinds of supply chain and logistics data (adding things like Procurement Workflows and Product Catalogues). Following these advancements, Engine will begin work on 2.0, which introduces intra-organization data sharing mechanisms (Vault Federation) for helping 2 companies that both store private data on-premise to securely and trustlessly coordinate.
These developments in Engine will precede the corresponding feature improvements across the rest of our projects; the Transmission layer, the ShipChain Web frontend and the Android mobile app will begin to catch up on the Engine 1.5 and 2.0 improvements over the remainder of 2019, as well as a few other unannounced projects we are working on that will build on the 2.0 ecosystem.
What will be the impact of ETH2.0 in 2020+, no need for a sidechain anymore?
It’s impossible to predict the impact of future developments in blockchain technology. Regardless, we strongly feel that having a dedicated sidechain for the supply chain and logistics industry is important because Enterprise adopters will never want to share computing power, gas prices, or governance concerns with game developers or fin-tech. The promise of Eth2.0 is great, but even Ethereum Foundation still recommends that L2 scaling mechanisms be adopted now and in the future. For more on why we think Industry-specific blockchains are a great idea, see our guest blog post on Loom.
How (from a tech and implementation perspective) does Shipchain intend to integrate the Shipchain Network with their clients’ various ERPs and TMS?
Various ways – but from a technical standpoint, most of these ERP/TMS have APIs that we can fairly easily tie together in combination with our Transmission API. It depends on the stage of the digitization process the client is in – some are very tech-friendly and have been ahead on the adoption curve, whereas others are pen and paper still. We can work with both, and the more data we can gather from the client, the better.
Wrapping It Up
Lastly, we wanted to take a moment to thank you all for your continued interest and support. We wish we could share every single milestone and victory with you, but sometimes in the business world, things move slower than we’d like and there are a couple of extra hoops to jump through. Please rest assured that we are on track to meet our Q2 goals and that we will be sharing some exciting news soon.
Until then, all the best!
John Monarch, CEO