As the STORJ ICO approaches in the coming hours, I would like to give you a preview of the Initial Coin Offering and how it will work.
Storj, which is pronounced as “storage”, is a decentralized blockchain technology based cloud storage system that allows peer-to -peer exchange of information. It is similar to products such as torrent sharing systems like Uttorent and even like Napster, the first application that allowed peers to share information, drawing bytes of data from each other directly. The main difference is that wjhen someone uploads their data on the Storj platform, no one else holds the entire set of information. Rather, the information is broken into “shards” that are distributed throughout the system “farmers” who then hold encrypted shards on extra capacity that they don’t use on their computer. To see more details about the STORJ platform click here.
STORJ ICO Details:
The Storj ICO has a contribution target size of $30,000,000, while issuing tokens at $.50 each. This would mean the sale of 60,000,000 tokens throughout the ICO. This offering will sell between 15 and 25 percent of the outstanding tokens.
STORJ has been offering the coins on a pre-sale basis for purchases above $50,000. Any purchase between 50 and 100 thousand gets a 10% discount with a lock-up period of 3 months and purchases over 100,000 dollars get a discount of 20% with a six month lock up period. This pre-sale ends when the ICO begins. The lock-up period is to ensure other purchasers that the market doesn’t flood immediately by the pre-buyers dumping their coins for instant profits.
STORJ ICO Concerns:
Storj initially offered their Storjcoins (SJCX) back in 2014 to raiise initial capital from their crowdsale to fund their project. The initial coins were issued on the Counterparty platform. There are 51,173,144 of the SJCX coins outstanding at the time of the STORJ ICO. Storj Labs has decided to move their tokens to the Ethereum ERC20 platform and the new token will be called STORJ.
There a a few concerns with the STORJ ICO, the first being the move to Ethereum. The question is how to handle the fifty million plus existing Counterparty based SJCX coins. Strorj came out with a two part migration plan that basically will work as follows. There will be a 1:1 swap by owners of the original coin.. After the swap the original coins will be burned and all future coins will be on the ERC20 platform. You can see the Migration plans by following the links below.
Token Migration Plan Pt.1
Token Migration Plan Pt. 2
The second, maybe more serious concerns is that there are a total of 500,000,000 coins created and even sfter the STORJ ICO, the most coins that can be held by others besides Storj Labs is about 110,000,000. That means that Storj Labs would have around 80% of the outstanding coins under their control. So much for decentralized! Storj Labs has come up with a partial solution detailed in the migration plan part 2 where they have decided to burn one coin for every one sold through the STORJ ICO. If the ICO is fully funded, this would bring the total amount of STORJ coins down to 440,000,000 and Storj Lab would hold 75% of the coins. I am not sure if that really accomplished much. Even Storj understands this problem and states in the migration plan:
“The remaining supply held by Storj at the conclusion of the sale, burn, migration deadline, and not used as strategic reserve will be time-locked for no less than 6 months. During this time Storj will seek to develop a more transparent reserve management structure which may include programmatic distribution and/or a neutral foundation to help manage and support the ongoing growth of the Storj ecosystem.”
STORJ ICO Preview Conclusion:
The Storj blockchain based cloud storage polatform is definitely an interesting and maybe even attractive platform. But the issues raised above are valid. This leaves a lot of questions open regarding the STORJ ICO and the platform control in general. We will have to see if this project is run transparently by the owners who control the majority of the coins or not.
We have created a Commemorative T Shirt for this event that you can purchase by clicking on the image below.
