CEO Mike Chen’s Zoom AMA from June 9th, 10:00pm EST
Q: What is Standard Tokenization Protocol, and why does it need its token?
The full name of STP is Standard Tokenization Protocol, which is a decentralized network for asset tokenizations. Right now for tokenization, there are a lot of problems in transparency, like non-comply tokenizations. We want to create a system and layer-2 solution to Ethereum, which adds a compliance layer to the current smart contract to ensure compliance when we issue tokens nowadays. I think that’s our protocol design. We will have on chain compliance via data adding to the current smart contract, and all the transactions will be validated to comply with all the jurisdictions and compliance requirements. And also on application levels, we will launch a retail book App in Asia and STP token will become the platform token to our retail book App, just like BNB and HT. Our app will have three main functionalities. The first one is STP token economics, including staking, revenue sharing…all the token economics futures about STP. The second thing is that the parent company of Block72 — GBIC has helped a lot of top assets on a global level in this space, including Hashgraph, Algorand, Aergo. We will bring these high assets at the best price to STP holders for token issuance. The third one is…after token issuance, and people need a place to trade so that we will provide trading institutions. We will connect different exchange APIs you can purchase tokens that we issue to you in STP one book app to all the exchanges, including Binance, Huobi, Bittrex, and so on. I think that’s how STP design in protocol and application use case.
Q: Why Bittrex choose Standard Tokenization Protocol as the next Bittrex International IEO? And Why you want Bittrex?
We are happy to join Bittrex as the next IEO. There are a few reasons for this cooperation.
The past Bittrex record is not so excellent. I think that’s also a big challenge and community people have doubts on if we can succeed in Bittrex IEO. I believe challenge means opportunity for us. The reason that Bittrex chooses us is that we are very different. Firstly, we don’t raise a significant amount of money. We only raised 750k USD as a hard cap for the Bittrex IEO because we don’t need that much money as our company Block72 is making cash flow every month. I think the average raise of other previous IEO projects such as Ocean Protocol is about 4.5 million dollars. Secondly, our team is very experienced in helping IEO projects to be successful at a global level, such as recent Kucoin IEO, also Reserve on Huobi IEO, Ampleforth on Bitfinex IEO. These are all clients of Block72. Bittrex knows we have incentive experienced team and strong global knowledge about exchange listing, marketing, community engagement. And we have proved our probabilities through still making cash flow to survive in a bear market.
We choose Bittrex because I think it’s one of the oldest exchange platforms, and it has a significant user base, and the compliance of Bittrex will also help us. It also has a robust local resource in Korea because they have a partnership with Upbit. I think all these reasons give us advantages to launch IEO on Bittrex.
Q: Why you don’t choose Asian exchanges to launch IEO?
I think for us, STP got a lot of offers from top 3 exchanges and also some small transactions. Asian exchanges like Huobi, Okex are pretty good, but I think the terms they gave to private investors are terrible. It’s tough for projects to balance the interests between private investors and IEO users. Private investors will have better liquidity if we do IEO on Bittrex than other Asian exchanges. Secondly, many Asian transactions have a robust exclusive period. For example, after launching IEO for two months, they can’t list on other exchanges. But Bittrex and Upbit will not prevent us from listing on other exchanges after IEO. We have soft commitments with most transactions and plan to list on other exchanges after IEO.
Q: Given the performance of Bittrex International’s past IEOs, what can we expect will be different for this one?
I think the IEO average return of Binance is 5x/4x. The next one is Huobi at about 3x…in the bottom is Bittrex at 0.3. I believe the experience doesn’t mean future states. The previous experience of Bittrex was not very successful. I think they already realized it. As I mentioned before, we only raise 750k dollar and have deficient insurance circulation. We only have 5% circulating at day 1, which means a relatively small number in terms of total token supply. I think with such a low cap. We can deliver the upset and benefit IEO users and private investors in terms of pricing. Most of the STP team is from Block72, and we have enough resources, experience, and wisdom to make our token successful not only for IEO but also post a listing. The last thing is the liquidity position. I think the liquidity will discount the price. We have a dedicated liquidity provision team to ensure all the buy-and-sell will be full of liquidity and to provide IEO buyers seamless trading experience. Besides, we will have continuous exchange listing plans and milestone delivery to maintain constant token demanding. Our retail book app will be launched in late July or early August. After that, people will have the demand to buy STP to experience all the functionalities. I think all these reasons will make us different and thriving in the Bittrex IEO.
Q: Do you already have any clients?
Mike Chen：Yea! As more background, I’m also the founder of Block72, which is I think one of the best digital asset investment banks. In this case, I have been in this area for three years. Lots of projects which are ranking on the top 100 of Coinmarketcap are our clients. So you might be confused about what digital asset investment banking does. We help them with PR, help them engage the community, as well as local fundraising and dev/business partnerships. Our clients include exchange clients like Bitmax and Bitfinex. We have been servicing them for one year right now, acquire users and go to market in Asia and we also have clients like Hashgraph, Algorand, Ontolgy, Basic Attention Token, and so on. We have about 40–50 project clients for the past two years to raise money, to be very successful. In all categories, we have a lot of clients, including also projects and exchanges partnership. We are on board to STP. We have those clients that they want, and so I think that’s why Bittrex wish to work with us. The team will deliver what we promise to Bittrex. There will be a lot of demand from Asia.
Q: What is the relationship between STP and Block72?
Mike Chen: Most of the teams of STP are from Block72. It’s like the relationship between Block.one and EOS. With Block72’s revenue backing, STP is more like a profit-generating token, like BNB. The more business Block72 has, the more STP tokens will be used. It would be helpful for STP to have this relationship with Block72.
Q: What does the roadmap look like for STP over the next 12 months?
Mike Chen: For STP, right now we only focus on one thing, we will finish our IEO on Bittrex in two days.
We have 30 days exclusive period for the Bittrex listing. So after 30 days, I think, after the first week of July, we will start to plan for others, including Bitmax and other exchanges. But now I can’t disclose their names, but they should be the top exchanges in the community right now.
And after the listing finish, we will deliver our first application around at the end of July or beginning of August. And I think once our application is provided, STP will have strong momentum and that people will have strong demand to buy STP. .So I think that we will also work with US teams for the license of tokenization and broker-dealer.
We can finalize it by the end of this year. And for Q4, the protocol will be launched. So we see there’s enough demand to use a network and we have enough people to have a strong need for STP.
We will plan to list on a top major exchange, and I think it’s probably the goal by the end of this year. For now, we’ll keep delivering listing and liquidity and also the technology development goals and milestones.
Q: How much do you raise in the single round before IEO?
Mike Chen: For this question, let me go through all the token metrics and token economics. For IEO, we’re raising 750,000 USD. For the individual cap, it’s 2,500. And it’s a small fundraising cap on Bittrex. So just as I said it again and again, the previous IEO projects on Bittrex, they raised at least millions of dollars while we only raised 750,000. So I’m very confident with a flash sale which means it’s sale over in 5 seconds or 10 seconds. And for the private investors, we raised is about 5 million dollars, for the first individual round at 0.01 USD, which is the same price as IEO price. We also built an additional 2 million USD, which is double the price as IEO users will get. So totally we raised 7 million USD. And most of the private investors for the round one at 0.01 USD, they will get tokens after 30 days belong to Bittrex, which I think will be around July 10th.
After July 10th, the round one people will get their tokens monthly for 12 months, and each month will get 6.66%.
One thing I want to add is that some users don’t like our changes on unlocking schedules, we also offered the refund option last week. After refunding, our total capitalization will be even smaller. So people who stay with us will benefit from that. When we finalize the refund date this week, we will announce the bonus plan for people who stay with us.
Q: What’s the incentive structures for teams, advisory, and ecosystems?
Mike Chen: One thing I want to address, for the team tokens, ecosystem tokens and also foundation tokens will be unlocked from Jan 2020. You can read published articles about this. Our team will be in a very long term. So we won’t get any personal tokens or team tokens or foundation tokens until Jan 2020. So that means, on the other hand, for the seven months from right now to December 2019, only investors who involved in IEO and private sales have the tokens to trade. So in this sense, most investors will benefit from that. Some other projects unlocked team tokens faster than the investors’ tokens, which means their investors’ interests will be hurt. So, in this case, our investors will have lots of benefits.
Q: What is the consensus mechanism?
Mike Chen: First of all, we’re layer 2 for now so not that dependent on consensus. Right now we’re on Ethereum. In future we will likely do dPos, we’ll have on-chain validators. One challenge will be to keep up with on-chain databases.
We’ll use DPoS to have critical components like VCs, legal, and other major actors, who will stake. Our mainnet will use DPoS.
Q: Will there be an inflationary trend?
It will not be inflationary. We will have a fixed supply. Our token economics will set us up to be deflationary. We will have super nodes and will have deflationary mechanisms, which include 1) supernodes, to have holders stake, to earn tokens/rewards 2) burning tokens, like BNB, using our revenue. 3) finding other utilities. We’ll work with other exchanges such as Bitmax to gamify the vesting schedule, such as using STP to unlock faster.
Another utility is when projects choose to work with STP platform. We can help distribute other projects tokens to STP token holders, and tie the release to the amount of STP tokens held.
Therefore, longer term, STP will be deflationary.
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If you’re an issuer interested in tokenizing your asset, please reach out to us at: contact@stp.network
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