Sweetbridge AMA with Dan Fries, Co-Founder, CoinCrunch — 14th June 2018
As part of our continuous efforts to feed news and developments to the Sweetbridge community, last week we ran another AMA (‘Ask Me Anything’) in our telegram channel.
We were very fortunate to have CoinCrunch Co-Founder Dan Fries spend his time with us for the event. Dan is no stranger to Sweetbridge. He hosted an Interview & AMA with Sweetbridge CEO, Founder Scott Nelson back in March of 2018 talking about Sweetbridge’s Novel Cryptoeconomics.
In the AMA, Dan discussed the good, bad, and the ugly of the current ICO environment and answered questions on the “decentralised” regulatory structure of Sweetbridge and how it fits into this ecosystem. He opened the AMA with an inspiring and passionate remark on what Sweetbridge and Coin Crunch share in common…
“I think we share a common ethos for value — a focus on what creates and accrues value long term. In Coin Crunch, we are what most people would consider value “investors” — almost to a fault. I think most groups / pools / influencers focus on the short-term (not everyone, though). We focus on the long term. A lot of people in our community have said that, if they were to invest in just a few long term value projects, they would be bitcoin, Sweetbridge, and a few others. I think we’re also a bit idealist in that sense — we really want to change the world. Anyone who’s been in the Sweetbridge telegram for a while probably feels the same way, that what the team is building here will be world-changing in scope, Not a fly by night type project.”
Here are some of the highlights from the AMA feed (now buried in a thread in our telegram channel). Reference: Coin Crunch is referred as CC, and Sweetbridge is referred as SB in below Q&A.
Q: Hi Dan, I was wondering if you could tell us whether you have any Sweetcoin?, What do you plan to do with it?
A: Of course I do, Hold on to it for quite some time. Eventually I would like to use it to collateralize loans against my assets. Not just crypto but other business assets as well.
Q: Are there many other groups like you around? We struggle to find more than a handful of independent researchers like yourselves in the sphere. Who else do you rate out there as a top list that have the same influencer ethics?
A: Yes there are absolutely, not everyone doing solid research has a public brand. But everyone should be paying attention to Blockchain Brad. When we started our channel, we started it because we actually could not find any information about certain projects. So we were doing all the research first hand — by talking to the teams, reading whitepapers and what not. Brad’s was the only channel putting out consistently quality stuff, I think he still sets the standard for founder interviews. As far as other research groups, there are many. The value of finding the “next big ICO”, whether it be something of real quality or not, is massive. It’s the opportunity to make generational wealth leaps with a reasonable investment. People are working very hard behind the scenes to court ICOs in any way possible.
Q: In your opinion, how do you think Sweetbridge will impact the blockchain supply chain space for the long term?
A: I don’t think there will be will be some big “inflection” point where we now say — “Sweetbridge has realized its vision” but I think we’ll see that case by case, in different industries using the example of the rural coffee farmer in Colombia who can take a loan against his crops, or his tools. If one or a few smart coffee farms plugs into the SB liquidity network, takes out loans and starts out-producing the guys on the farm next door, it will spread quickly in that region and industry. It’s hard to say now which industries those will be, but my guess is real estate will be the first, since that is one of the first major use cases SB will focus on.
Q: Hi Dan, what is your biggest challenge at Coin Crunch these days?
A: Our biggest challenge is and always will be balancing the goals and incentives between our community, the projects we connect with, and ourselves personally as CC admins. Right now, above all, CC members want two things primarily: 1) good returns on ICOs, and 2) an information advantage that puts pressure on us to find great projects, and sort of “let the community know”, but also to do so in a way that does not harm the projects themselves — meaning, saying something factually incorrect, or at the wrong time, or whatever but the nice part is, is that if we work really hard — and we are working very hard — to bring the best information to our group and really go out to bad for them, then they see this and it builds trust. We’re seeing that, after people have been with us and following us for a while, they focus less on *just* money, and more on the community vibe. A lot of people say that ‘the best crypto projects have strong communities.’ I think that’s mostly true (although, you can build a great project without having a great community *first*) the same is true with us.
Q: How do you think the current bear market affects the ICO environment?
A: This is a great question. Thank you to whoever asked it. Sia and I started going down the crypto rabbit hole about late spring early summer last year. Like a lot of people, when the bull run kicked in, we went all in committing most of our time to building CC. By the time the channel became a real “thing”, we were in bear times. So I’m not sure what the ICO environment would look like having an established brand around ICOs *and* being in a bull market. I imagine things would be a lot different. That’s to say, from our point of view, the ICO environment is alive and well. It changes a lot week to week, but the pace of ICOs hasn’t slowed down at all.
Q: What do you think Sweetbridge’s biggest challenge for adoption will be?
A: Regulation…Although, from speaking with Scott, it’s apparent he and the rest of SB are tackling that head on. The killer feature of SB will be the network effect. The same way your local diner can issue groupons or points programs and steal customers from the guy across the street. Once one or two brands do that well in an industry to get more customers and cut costs, others will follow suit so I think adoption will start slow, but then spread. Regulation, on the other hand, when I spoke with Scott in March, SB was going back and forth with regulators to ensure that SWC was firmly considered a utility not a security.
Right now, many ICOs are changing tune *in real time* — clearly stating that their tokens are utilities, raising money, then saying “Actually jk, it’s now a security”. I’m not pointing the finger, but that just shows the state of the regulatory environment in the US. We are bullish on security tokens. I think it’s a bit of a misnomer — we can just call them “securities”.
One approach, which I think was in Montana, was to classify tokens in a different way altogether. I thought that was smart, since a lot of securities laws are old and outdated, written in the 1930s. It doesn’t make sense to apply those to computer code
Q: What other projects do you see in this environment as being similar to Sweetbridge?
A: There are many lending projects, none of which are close to the scope of what SB is doing. In terms of stabletoken projects, I’m a big fan of DAI, Havven, and a newer one called Fragments.
Q: What are your thoughts on POW, POS, etc. / the future of consensus mechanisms for DLTs?
A: Good question. Admittedly I haven’t been following the news much lately but most people are probably familiar with the wave of 51% attacks on many smaller chains and some bigger ones this was after the Sia.tech team published a very interesting “expose” of the mining industry. It’s a great read here when you have 20 minutes to spare (The State of Cryptocurrency Mining). Certain groups were/are developing coin-specific ASICs without telling anyone, then attacking the network and running away with a lot of $$ the knee jerk reaction is to think “PoW is no longer a good consensus” but there are business and groups forming now to protect newer chains that want to use PoW.
Q: But securities are only accessable to accredited investors. That will cut out a lot of people in the cryptocurrency space. Are there ways to go around that?
A: In terms of lending, Celsius Network is one I think still has a lot of potential long term. Like SB, they focused very heavily on crypto economics and engineering a token that incentivized people to HODL on for as long as you can imagine. Unfortunately as we know, many of those features start to make the token look a lot like a security but that’s not necessarily a bad thing — it just means there will be different challenges.
Q: Does the members of your community like SB as much as you and Sia? What do you think are the reservations of the people that are not “onboard” with SB?
A: I’m not sure that Sia likes SB as much as I do, but he likes it a lot. As for the remaining members of CC, we definitely brought a lot of them into the fold.
Q: What projects are you involved in that would suit the Sweetbridge economy, if any?
A: There are a lot of projects that could benefit from issuing a discount token. In fact, nearly every project we come across that is doing a “reverse ICO” of some kind is cobbling together all sorts of weird token models all with good intentions but ultimately if they want to do a capital raise and bring on customers, just issue a discount token for their brand.
Q: Just curious, have you heard about any projects doing hybrid ICOs or planning to issue both utility AND security tokens as a part of their crowdsale? Do you think this could become a trend?
A: I haven’t heard of anyone doing a “hybrid ICO (Initial Coin Offering)/STO (Security Tokens Offering)” — no. Have you? I’d be very curious. However, I’ve heard of a few projects that are doing security tokens (STOs) but still trying to engineer utility into their tokens, That interests me a lot, because ultimately what an STO is saying is “we’re doing a capital raise”. The only reason they create a token is to help raise capital which can be done without giving any sort of utility to the token itself, so when you take the “capital raise” part out of the equation of an ICO (which, let’s be honest, a lot of ICOs were done as non-dilutive capital raises), you feel you’re with someone who can approach the question of “how do we give this thing utility?” — but without worrying about how it makes money and gives a return to investors. We’ve recommended it to a few projects but I can’t name names just yet.
Q: Approximately what percentage of ICOs in this space make the grade in terms of viability and quality? Are you tempted to do one? An ICO?
A: Tough question to answer. Ballpark I would say less than 5% for sure but probably less though. It’s hard to say, we are so focused on looking for the best projects that we don’t see much else. I would say we get about 6–7 ICO review requests per day, maybe 1 per week is worth responding, and the rest are the equivalent of getting an email for someone asking for help with their Nigerian inheritance. So that is a general sense of the market… maybe 1 potentially okay projects out of 50, and still to date I think maybe only a couple have been great. Let me also take a moment to say that even what is considered “great” is often far from it. There are many well known ICO ‘lists of lists’ where you can see what each influencer ranks as “best”. The lists included in those ‘lists of lists’ are very suspect )in my opinion.
People have been asking us for months to put out some kind of ranking or spreadsheet or what not. I think that sends a bad message for a lot of reasons. First and foremost, most of what is considered a “top ICO” by any particular influencer is based on how much they’re invested and how high their bonus is.
That aside, just take look. The top projects are often okay calls, but even so not always. Sia and I wonder how people could claim that ABC project is the “best” but understandably, influencers have to stand how somehow else they are wasting their time.
We believe in the long game, and so we’re growing slowly but attracting the right kind of people
I recommend everyone give the latest Unchained podcast a listen it’s with Joel Monegro from Placeholder, he talks about how they invest on a very long time horizon and how the fund business model is structured in a way that allows them to do that. That is what Sia and I are about: the long term vision. We are not the best traders, and not always the best at getting huge ICO bonuses (though pretty good), but what we do look for in projects are signals of real fundamental value, either in the team, the tech or the economics that helps us sleep well at night. Yes, this means we probably miss out on a lot of moons, but we really don’t care.
Q: What do you call long-term?
A: It’s easier to keep a long term vision when you have consistent cash flow. In crypto terms, I would say at a minimum 6–12 months which is a long time in crypto. Ideally 3–5 years and if you’re in the position of Joel and Chris (see previous question), 10+ years or more.
That’s easier said than done, and a lot of people get into crypto looking for financial freedom. Meaning they start off with a short term mindset that may hurt them. There’s a saying, “if you want to start a business, get a job.”
Meaning, all the uncertainties of entrepreneurship, or in the case of crypto volatility, are much easier to handle if you have steady cash flow. If you don’t have any money coming in the door, your brain thinks in weird ways. Even if you have a lot of money in the bank. There is an influencer on twitter called “CryptoDad” — which is an awesome name.
Q: How do you find the ICO Environment in Asia? And, what do you think are the opportunities for SB in the region?
A: We just did a video with a Chinese media company called SV Insight. They are partnered with a lot of Asian projects and funds, big and small.
The best way to connect for the average person who doesn’t live on the road is just reach out. Email, telegram, linkedin and twitter are all great; above all, meeting them in person — not necessarily at conferences, though conferences are a great way to accelerate your networking. You’ll notice that CC and other channels, like Brad and a few others, tend to attract a lot of the “Chinese ICOs”. Like Brad, we’ve been meeting with different people in that space and making in roads.
For SB specifically, end in Scott and let him tell the story. Chinese investors have a lot of money and are looking to put it in respected safe havens, of which SB would be considered one.
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