Highlights from Sweetbridge CEO Scott Nelson’s Telegram AMA — Feb 3, 2017

Aaron Stanley
Sweetbridge
Published in
10 min readFeb 5, 2018

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Many thanks to everyone who participated in our first-ever Sweetbridge AMA (Ask Me Anything) on Telegram last Saturday! We had a good turnout with some very thoughtful questions asked. It’s encouraging to see that there is an upswell of organic momentum driving this movement.

For those who weren’t able to participate, we’ve put together a summary of the highlights below with breakouts by topic. Please feel free to continue the conversation in our Telegram channel as user input and feedback is extremely important to us. And if you haven’t already, be sure to join our channel!

Scott fielded several questions pertaining to some of the administrative and procedural details of our crowdsale, particularly around AML/KYC screening process and jurisdictional availability.

A — “I’ve seen a lot of questions about why it takes so long for the KYC / AML membership process compared to other crypto projects. There are two reasons for this. The first is the level and countries of interest in Sweetbridge were different than our expectation. This caught us by surprise and we were inadequately prepared. Second, we are VERY serious about having a KYC/ AML process that can stand up to government and bank scrutiny in any jurisdiction in the world. We are not playing at this game. We are establishing the standard in the game. The standard in which we believe all future crowdsales should be measured against.”

Q — “Hey Scott, I just wanted to ask how long it might take for Sweetbridge to start accepting Indian investor’s applications?”

A — “We are are accepting membership applications now and we expect to have good news on India very shortly… Just hang tight. India is imminent. Make sure you put your application in. We have been in discussions with our lawyers around the world for months and getting a group of lawyers to agree on anything is time consuming.”

Q — “What do I do if I don’t have [a Social Security Number or [Tax ID] number?”

A — This is whatever your government-issued tax identification number happens to be. Your National Passport can also serve as this number. You will have to upload a picture of the ID so our KYC professionals will be able to conduct a risk assessment.

Q — “The crowdsale seems to be on a pause. Why the delay? Does it have to do with the crash of the crypto market?”

A — “It has nothing to do with crypto markets. It has everything to do with where we are in our application development process for the crowdsale platform utilizing Bridgecoin. We will not release Stage 3 until we have passed our security audit for the crowdsale platform. We will not release Stage 4 until our lending application is close to release and has passed at least one security audit. We will not release our app until it has passed at least two security audits.”

Q — “Is Latin America and Caribbean on the roadmap?”

A — “Yes, they are. We are just finalizing a new list of countries to open shortly which will include countries in Latin American and the Caribbean.”

Q — “Can you talk about your discounted coin release strategy and how it correlates to revenue growth and why did you choose this strategy?”

A — “New Sweetcoins are released as revenue growth occurs at a rate of 25% of revenue growth. This creates a logarithmic growth curve that will not even release all tokens even if the network growth grows to over a trillion dollars revenue.”

Several participants asked questions pertaining to Sweetbridge’s broader vision and long term outlook.

Q — “Where do you see Sweetbridge in 5 years? What’s the medium term plan?”

A — “I see Sweetbridge being a household name. Our application of loaning money to yourself is one of a very few applications that could be used by every person, organization and government on the earth.”

Q — “Considering many supply chains begin with natural resources from the earth, how will Sweetbridge prevent mother nature from being exploited? For example due to overfishing, pollution, and other tragedies of the commons.”

A — “Sweetbridge can’t prevent those things from happening, but the projects and people utilizing Sweetbridge can.”

Q — “Do you think the overall aim [of the project] is too ambitious?”

A — “I get asked this question a lot. The answer is a resounding no. The protocols necessary to make this work are quite lightweight. The power here is in the paradigm shift which sounds complicated but is actually simple.”

Q — “Does Sweetbridge plan to decentralize governance after it matures, other than allowing tokens holders to veto critical protocol changes proposed by the Foundation?”

A — “Our phase plan takes 7 years to complete in turning over the control of the Sweetbridge protocol to a decentralized set of entities licensed to use the Sweetbridge protocol around the world. Think of it as a global credit union made up of many national credit unions.”

Scott also took several questions about how the nuts and bolts of Sweetbridge’s operational strategy will actually work.

Q — “I have a question about how Sweetbridge is going to actually have time to clear all collateral capital that will “fall” into your ownership when people don’t follow through on their contracts to themselves. I mean Sweetbridge will have to travel the world and collect different assets, valuables, houses and stuff and then decide what to do with it. Will this not take an extreme amount of personal and time?”

A — “It is a logical question. First, Sweetbridge will be licensing entities around the world who agree to a common constitution and a set of ethical rules. We have 11 of these entities in formation in various states of formation already in 9 of the largest economies of the world. Anyone or any group of people who qualifies can be licensed to serve as a Sweetbridge entity. Look for our soon-to-be-published whitepaper on the Sweetbridge economy structure. These entities will be a decentralized set of organizations independent and controlled by the membership.”

Q — “Hi Scott are you able to give us a progress or hint as to whether we are close to real world adoption of Sweetbridge by any big players (household names)? It’s a big leap to this new world/way of thinking for established businesses so not sure how easily they will realistically adopt?”

A — “We have as yet unsigned but very active proof of concepts with Fortune 500 companies. Press releases will be coming as organizations approve publication.”

Q — “The idea is to allow other companies to do crowdsale on the Sweetbridge platform. Will those project offer SWC as discount tokens or will they offer their own tokens. If they offer their own tokens how does it help Sweetbridge as a whole?”

A — “They will offer their own which will be a white-labeled version of Sweetcoin. They will also pay a royalty on their revenue and their crowdsale funds to the Sweetbridge network. This royalty will increase the fees that Sweetcoin will discount, increasing the discount value of Sweetcoin. Many people in error have read our whitepaper and assumed that only interest fees will be included in the calculation for discount value of Sweetcoin. This is not true. All Sweetbridge fees are included in the calculation of discount value of Sweetcoin.”

Q — “Will it be possible to use the Sweetbridge platform for a real estate purchase in the UK and when to you envision that becoming a reality?”

A — “We are working on testing real estate as a use case in Arizona (U.S.) first. We plan to have a survey of users to determine where the greatest concentration of use and for what classes of assets our users will be most interested in. We will prioritize adding asset classes and jurisdictions based on customer demand.”

Q — “Do you have a time line for opening up the vault to other assets such as NEO and OMG? Would that be dependent on said assets reaching certain criteria.”

A — “That is a great question. We want to prove our ability to prove a stable coin in the first 90 days of the project of Bitcoin, Ether and Sweetcoin before expanding the number of assets we accept. All of our models suggest that this is possible, but we need to see what happens when irrational actors are allowed to participate in the system. We are not solely interested in crypto assets so we very quickly want to move into real world assets such as receivables, real estate and vehicles. Other crypto assets need to have sufficient history and liquidity depth for us to consider them, but little stands in the way of us adding other assets.”

Q — ‘Where do you think you might run into bottlenecks with maritime law and arbitration?”

“A — “So far I don’t see a lot of bottlenecks in maritime law and arbitration other than the time it will take Mattereum and Sweetbridge to build it out on a national level. We have found significant interest from the legal community in participating in this process”

Q — “If the value of an asset locked in the vault falls below the value borrowed against it what incentive do you have to buy it back?”

A — “None, which is why the smart contract would sell the asset when it drops below the sell line but before it drops below its collateral value.”

Q — “Would the number of Sweetcoin needed for free interest change based on platform utilization?”

A — “Yes, as the platform utilization goes up, the quantity goes down.”

As with any serious crypto project, questions of regulation and licensing were front and center

Q — “Can you give some info on your banking license roadmap?”

A — “We are working on money transmission licenses first and licenses necessary to loan on real-world assets in 9 of the 10 largest economies of the world. We have been advised by lawyers not to give any dates, but we already have exemptions in two states in the U.S. and expect more shortly.”

Q — “Do you ever plan to get Bridgecoin or Sweetcoin on an exchange?”

A — ““Because neither Sweetcoin or Bridgecoin are securities, and to prevent them from being treated as securities, we cannot hold discussions with exchanges until they are publicly released. We will have our own exchanges for Bridgecoin. And the ability to exchange sweetcoin for Bridgecoin and vice-a-versa.”

Others asked about the platform’s functionality and how some of the finer points might work and what wrinkles need to be ironed out moving ahead

Q — “It’s hard to figure out how the discount works. The aim is to offer borrowing at 6%. Is there a target as how many SWC is needed per $1000 borrowed to borrow interest free?”

A — “First, we are pre-contracting with customers to insure sufficient use of the platform to target a discount value of Sweetcoin in the $.07 per month range. The app will automatically calculate and acquire Sweetcoin to achieve any interest level a user wants. You need a little over 7 Sweetcoin.”

Q — “Lets imagine I work for a big pharma company. What questions/concerns would you anticipate that I get from legal and compliance staff in my company, if I’d pitch Sweetbridge to them? What criticisms have you experienced while pitching this to companies?”

A — “Concerns over the Bridgecoin being stable. Fear of being associated with cryptocurrencies and wanting to make sure that all legal KYC/AML and banking licenses are in place. Corporations do not want anonymity in their supply chains and you have to help them understand that anonymity isn’t required. You have to help them understand that doesn’t need to happen. In practice, we have found that the majority of large organizations have a blockchain innovation center looking for projects related to supply chain and are very interested in Sweetbridge. In fact, in my career, I have never seen anything like this level of interest.”

Finally, there were several good questions about the difference between Bridgecoin and the stablecoin being offered by MakerDAO

Q — “What will be the major technical differences between Bridgecoin and MakerDAO’s Dai token?”

A — “They are very different. The Maker system and other systems such as Basecoin solely use market making forces to create stability. Market making forces cannot make a truly stable coin because market makers need instability to make money. Maker and Basecoin are trying to solve a different problem and they do not need a coin which is hyper stable. Sweetbridge is trying to create liquidity in local trade where even a 10 basis point plus or minus could significantly affect adoption. Maker and Basecoin are designed for traders to park funds in relatively stable assets where 2–5% swings from valuations aren’t a disaster. Sweetbridge uses a combination of stability drivers. A portion of its tokens are backed by fiat currency much like Tether. This is used for flash liquidity at substantial levels (2–3 times greater than fractional-based lending from banks). Market making is used as well, but more for secondary markets, not our exchanges. The major driver is companies contracting with suppliers for remittance in BRC. This is similar to the WIR Bank use of a tokenized currency which has been pegged to the Swiss Franc and has been rock-solid stable for 70 years.”

Q — “On the subject of MakerDao, can you talk about how Sweetbridge’s KYC/AML membership model compares to MakerDao’s more decentralized Dai stablecoin model?”

A — “MakerDao isn’t trying to enable the largest corporations on the earth to move money from one party to another. Crypto assets gained in trading are notoriously difficult to bank. Sweebridge is trying to make the real world liquid. It is a totally different use case. Sweetbridge is extremely interested in transparency. You get the same thing you do with MakerDao. Sweetbridge KYC/AML process is distributed globally. Each country will have its own KYC/AML data store on a private ,permissioned blockchain, hyperledger. Identity information will only be available to governments within the country the person is resident. There is a white paper on the governance model and identity system which will explain more that is under development.”

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