Token Sale Essentials — The VALID Token
With the VALID ITO, Procivis AG seeks to contribute to the development of ITOs as a powerful tool to drive future innovation by building a supporter base of early adopters as well as enabling the allocation of capital for the development of an independent and publicly available platform.
ITOs have ushered in an era of unprecedented access to capital for innovation. With a well-articulated vision, entrepreneurs can now transcend geographical barriers to reach a global base of supporters. On the other hand, easy access to capital has also made the system prone to abuse with a host of questionable projects raising astronomical sums of money by defrauding unsuspecting individuals. In this post, we seek to inform the VALID community about our efforts to comply with the highest standards of regulation, the rationale behind launching the VALID token, as well as the utility and economics of the token.
One of the most important regulatory steps we undertook early on was to pre-emptively register Procivis AG as a member of the Self-Regulatory Organization (SRO) VQF, which is supervised by FINMA, Switzerland’s financial market regulator. As FINMA pointed out in its newest guidelines, issued on 16 February 2018, such a requirement will become necessary for ITOs in Switzerland. Consequently, every ITO participant will be required to complete an AML/KYC process, ensuring compliance with FINMA regulation in this respect, and helping to protect the interests of the VALID community.
Utility and Economics
The VALID token will serve as a medium of exchange on the VALID marketplace, allowing data consumers and digital identity owners (users) to transact seamlessly. In addition to using the token to access services on the marketplace, token holders will be able to exchange the tokens for fiat currency on the secondary market.
One of the revolutionary aspects of blockchain is the disintermediation of transactions. This is also one of the most important features of the VALID marketplace: no intermediaries, so individuals get remunerated directly for what their data is worth, net of blockchain transaction costs. Thus, a utility token serves the interest of its users since it allows the establishment of a public infrastructure for the common good without building any dependency on the actions of a single entity.
The VALID crowdsale provides the opportunity for supporters to contribute towards the VALID vision of empowering users with a fully self-sovereign digital identity and extensive control over personal data. The price of the token following the listing will largely be determined by the market forces of demand and supply. The long-term demand for the VALID token will depend on the growth and adoption of the VALID platform as well as on the number and types of services that will emerge on the platform over time. While the utility of the token drives the demand, the supply will be capped at 1,000,000,000.
Why our own token?
We envision VALID to be a public good, creating an ecosystem for the secure storage, exchange and monetization of personal data by the identity owners, as well as compliant and cost-efficient use of this data by data consumers. To this end, VALID will be a non-profit entity which will be established as a foundation under Swiss law upon successful delivery of the project by Procivis AG. We believe that the issuance of a token is the most appropriate means to realise our vision as it facilitates the following functions:
Establishment of a Growth Fund: The VALID project depends on mass adoption for its success. The growth fund, composed of 30% of the total VALID token supply, will incentivise stakeholders — digital identity owners and data consumers — to participate in the VALID marketplace.
Price Stability Mechanisms: While the VALID token price will be determined primarily by the market, during the first few years, VALID will be able to intervene on the market with token buy backs to counteract price falls which may jeopardise the smooth functioning of the VALID marketplace. Thus, the VALID token facilitates price stability mechanisms which will protect the interests of the VALID community.
Micro-transactions: We expect that the value of transactions on the VALID marketplace would span a broad range, with low-price micro-transactions at the lower end. We seek to minimise transaction costs to make it economically viable for participants in the marketplace to engage in micro-transactions, establishing a frictionless ecosystem for data sharing. While other cryptocurrencies have begun to address the issue of micro-transactions, they still remain unproven for deployment at scale.