Satoshi • Fund: Sikoba Token Presale Report

Sikoba wants to offer an alternative to bank credits allowing peer-to-peer IOUs (an informal document acknowledging a debt owned) on a blockchain. The concept looks interesting, but it is still in development. There is no whitepaper and no full-time team. At the same time, the goal of presale is exactly to cover those gaps and raise money for further development.

About

Sikoba (former New Money Hub) will be a blockchain-based decentralised money platform based on peer-to-peer IOUs. If you and your counterparty trust each other in real life, you will be able to grant each other credits on specific conditions not using money. Also strangers will be able to pay by IOUs as the credit will be rippled through a chain of trusted participants. The project is at concept stage. If the presale is successful, Sikoba plans to have a whitepper and MVP ready in October and hold the crowdsale in November this year. A full-scale launch is to be in the 3rd quarter of 2018.

Potential market

Sikoba mainly targets those for whom using bank money is impossible or too costly:

Companies — to do business within an inter-company credit network: companies send each other invoices, but instead of paying them, just book them; a clearing event occurs from time to time, and outstanding debts are settled with bank money
The unbanked with no chance for micro-credit — to keep track of mutual credits
Microenterprises in emerging economies — to pay with IOUs instead of micro-credits to avoid high interest rates
Local communities — to create local currencies
Local governments — to set up an alternative money/credit system in case of a crisis
Banks — to get profit from providing fiat money to Sikoba users where needed

Competitors

Ripple
The credit conversion model used by Sikoba is very close to Ripple’s idea of transferring assets by rippling: both allow parties who do not know each other transact through a chain of relationships. The difference, as explained by the Sikoba team, is that in Ripple the assets transferred through a chain of relationships are fungible (the same token all the way across the chain), while in Sikoba — not necessarily. Each link in the chain is ruled by a specific credit relationship, so the tokens in different links of the chain are not the same tokens.
Trustlines Network
In contrast to Ethereum-based Trustlines, Sikoba wants to enable payments that are more complex in terms of rules and fees, to meet the companies’s needs.
BTCjam (or any other lending platform)
Sikoba is not about lending money, but about paying by IOUs so that no money is used.

Platform features

Credit conversion theory based on the idea of rippling: whenever a person wants to pay by IOU, the platform finds a chain of intermediaries connecting the payer to the payee, and records the payment in each intermediary’s account all the way down the chain, resulting in bilateral IOUs
Users define terms and conditions for their credit relationships
Optimal payment path computed automatically for all payments
Ability to create new currencies, linked to financial assets or other external data
Library of sample contracts and ability to create custom contracts
Potentially — an access to fiat currencies and other financial instruments via banks

Technology

Core blockchain — not known yet; Hyperledger Fabric or Sawtooth Lake are considered; Ethereum is likely to be used as a notary system
Permissioned mining model: only authorized nodes called “Federation members” may add blocks to the blockchain
At foundation stage, Federation members to be elected by the Sikoba company; since production stage — by users themselves
Miners are selected based on their high computational power, large storage, and advanced network connectivity capabilities; they are compensated by users’ transaction fees
Economic rules are specified on the blockchain; changing the rules is done by voting of Federation members, no fork needed
Optimization consensus protocol is in development to solve complex optimization problems: optimization is run independently on each node, and consensus is reached based on the best solution

Team

Sikoba currently counts 3 core members: Founder and Research Director Alexander Kampa, Chief Scientist Eyal Ron and Operations Director Craig Sailor. Alexander Kampa has worked in IT and finance consultancy for about 9 years, after which he founded New Money Hub, an informal think tank focusing on monetary theory and stable economic systems. Software developer by background Eyal Ron and programmer Craig Sailor are involved for 67%. They have recently won an award from German Institute for Standardization for blockchain terminology standardization and a blockchain notary use case. Although not disclosed on Sikoba website, Ron and Sailor turn out to run CRYPTOM TECHNOLOGIES, a company that provides blockchain solutions and consulting for business. CRYPTOM is now busy with two projects: Ethereum VM Database and Fitblitz, available (but not very popular) on Github.

The rest currently works half-time or on as-needed basis. The plan is to strengthen the team in case of a successful presale.

Public token presale

Aim — to raise enough money to produce a MVP
Private pre-allocation phase already completed
During presale Sikoba presale token is offered
Backers receive 1,5 token per each ETH sent (which is 50 % bonus against 60 % bonus at pre-allocation); tokens will be issued and tradable in late June / early July
Holders of Sikoba presale tokens will eventually be able to exchange them into Sikoba tokens (SKO) at ratio 1 SKO per 1 Sikoba presale token; SKO will be used to pay for transaction fees on Sikoba
Presale starts on April 25 at 12:00 noon UT and runs till May 15 or till the max cap is reached
Preliminary min cap — ETH 4,000; preliminary max cap — ETH 8,000
Final min and max amounts will be defined on April 25 based on ETH market price
Only payments between 5 and 250 ETH are accepted
Held via Ethereum smart contract
Presale URL and terms: http://www.sikoba.com/www/presale/index.html
Сrowdsale will be held by the end of 2017

Funds allocation

If the max cap is reached, the funds will be released to Sikoba and will be used to retain and possibly expand the current team, deliver a MVP and prepare for the crowdsale.

Details of the future crowdsale, as well as post-crowdsale SKO token distribution are not defined at this stage.

Summary

While the peer-to-peer lending market has been showing striking growth, and Ripple using a similar model is №3 in market capitalization after BTC and ETH, peer-to-peer IOUs are not the same story and their market potential is difficult to predict
The concept looks promising, but needs further exploration
The main blockchain is yet to be defined
The team has become visible in the blockchain community since recently only. Two of the three core members are combining their work with other projects

“It is very risky to invest in a project that has no whitepaper or code, only idea, — underlines Konstantin Lomashuk, CEO of Satoshi • Fund. — Sikoba has a really good concept, and we are looking forward for MVP. The pre-ICO goal of 4000 ether is fair, but we will see how market evaluates them.“

Useful links

For more details on the project, check their website, resources section, or Slack channel.

For all useful links, check the project’s profile on Cyber • Fund.

Satoshi • Fund — blockchain investment company. Invest only in blockchain assets since 2014.

The report is prepared by Satoshi • Fund.

You can read it on Medium.