Simple Token is building a platform to help other applications and communities issue their own unique tokens on an Ethereum sidechain with capacity to support consumer activity. A Member Company (MC)—anyone wishing to tokenize some aspect of their product or service offering—will utilize the OST platform to design and construct their own ‘Branded Token’ (BT) to be used for in-app transactions and commerce on a side-chain. To that end, OST is building a number of open source ‘modules’ for Member Companies to add and build from, including:
- A Token Design Module to set the branding, staking parameters, exchange rate, and restrictions.
- An Identity Module for user profile creation and KYC (Know Your Customer) verification.
- A Wallet Module for implementing accounting, payments, token purchasing and exchanging, and smart contract functionality for incentives and rewards (like tipping content authors, and voting.
- A Ledger Module for public transaction history and transaction auditing.
- Rights modules for Digital Rights Management, royalties, and commissions.
- An Administration Module for analytics, alerts, monitoring, fraud prevention, and security.
- An Interoperability Module which looks to increase network effects by encouraging cross-functionality between member companies on the OST network, and, eventually, across the wider Ethereum network of services as well.
Member Companies use ST throughout the life cycle of the token issuance and distribution process. First, member companies will use the OST platform to design and launch their custom branded token. Once a branded token is ready for launch, the member company purchases and stakes OST to an Ethereum Smart contract. This triggers the execution of code that controls the minting and distribution of branded tokens on a side-chain. All branded token transactions will happen on the side-chain, and are validated by the OST Foundation, OST Company, and member companies. Member Companies won’t need to maintain a consensus mechanism or rely entirely on Ethereum mainnet, which won’t yet support transaction capacity for consumer applications like Pepo. The side-chain state root will be regularly and automatically anchored to the Ethereum Network to ensure immutability. The thinking is that member companies will initially purchase ST for their BT issuance and distribution campaigns, and eventually (if their company gains users and market traction) their BT peer-to-peer economy will take on a life of its own.
The primary function of STs will be as a stake of value to back branded utility tokens (BTs). Member companies stake ST to a smart contract on the Ethereum Network and define the conversion rate between ST and the BT they would like to create. A set of BTs are then minted and distributed by the member company to their users. Since the newly minted BTs are essentially a denomination of the ST value held in the smart contract, BT holders can always ‘cash out’ their BTs in exchange for STs which can be sold for fiat on external exchanges.
ST will play several roles within this framework, as well as a few additional roles on the platform, including:
- Increase BT Liquidity: BTs can be exchanged for their equivalent value of STs at any time. When users cash out, they receive a disbursement of ST from the member company’s BT issuance smart contract.
- Future Token Issuance: Users of member company applications can purchase BT by sending ST to the token issuance smart contract. Member Companies can also increase the total supply of BTs available by stacking additional ST to the issuance smart contract.
- Governance: OST holders can provide non-binding input on certain protocol governance issues
- Membership Fees: OST are paid by member companies to request and maintain membership in the platform. Companies will need to both stake simple tokens and pay an ongoing annual fee in simple tokens.
The team is led by Director and CEO, Jason Goldberg, who previously held the position of founding CEO at Hem and Fab. Jason is also currently acting CEO of Pepo. Nishith Shah is OST’s Director and CTO, and previously worked with Jason at Hem, Fab, and Social Median. Nishith was also previously the Founder and CEO at True Sparrow Systems. Benjamin Bollen is Simple Token’s Chief Technology Strategist, and likely has the most hands-on blockchain experience, having worked as a Lead Developer at Hyperledger Burrow, a Senior Developer / Platform Lead at Monax Industries, and as a Research Engineer/ Core Developer at Maidsafe.net Limited.
Disclosure: Smith + Crown was a compensated advisor to this project.