When I first took a look at the COMSA ICO, I was intrigued. The company is building an ICO launch platform for enterprise ICO’s on the blockchain. The idea itself is actually really cool and I was very impressed at first. However, when I started to dig into the NEM Foundation, Fintech group the Tech Bureau and COMSA, I was left with more questions than I started. Now, a lot of this may be because I do not have exposure to the Asian ICO market and am not keyed into trends there. However, NEM’s North American expansion still raises some questions.
First up, let me go through COMSA, a “one stop shop” for ICO’s to launch on the COMSA platform. Ryan Gill, leading initiatives for the NEM Foundation in NA, told me that COMSA will provide a “white glove service” for enterprises who want to transition to the blockchain. By going this route, companies will have access to the “Zaif Exchange, multi-cryptocurrencies subscription, cross-platform integration and a ready ICO asset creation through the use of the NEM and Ethereum public blockchains and mijin private blockchain respectively.”
COMSA will bring together NEM, Ethereum and Bitcoin networks and pair them to their mijin private blockchain used by enterprises, providing enterprises the ability to keep sensitive information such as accounting, supply and personnel data off the public blockchain and kept on a private permissioned blockchain. This mixture will be key for business to adapt to the blockchain, while keeping tight access to their information and ability to use existing data systems.
With the help of COMSA, enterprises will be able to seamlessly transfer to the blockchain, retain all of their information and also have a partner in COMSA who will assist them in the future if they need to make any additions or changes.
A major part of the COMSA ecosystem is mijin, a private blockchain solution provided by the Tech Bureau. Mijin will allow enterprises to record and process accounting, finance, logistics and other sensitive data on their own controlled private blockchain. This will be a key factor in my opinion which will drive enterprises to adapt blockchain technology. For a lot of enterprises, they will already have MySQL databases in use, mijin will allow them to integrate their existing systems into the COMSA architecture. Mijin has already been tested by Japan’s largest online bank, micro financing company Infoteria and 300 other business are testing or using mijin in the CloudChain beta program hosted by Sakura Internet.
Zaif is Japan’s third largest exchange, with 30 million USD/day volume, is owned and operated by Tech Bureau. It will serve as the connection to the Ethereum and Bitcoin networks, allowing for these assets to be “transacted in the NEM blockchain as an asset, and with this asset being backed by Zaif as the trust-exchange.it can also be traded in the Zaif exchange as if it is a NEM or Ethereum asset.”
Zaif is fully licensed by the FSA of Japan and its connection will give COMSA the ability to provide its enterprise clients services such as fiat to token and vice versa exchange. Paired with services such as Changlley and Shapeshift, COMSA clients will be able to receive payment in USD, EUR, or JPY and then process it immediately to any major currency or their token.
The exchange needs some work to be adapted to English speaking users, as most all pages are in Japanese.
“While businesses are already creating NEM-based tokens and listing them on exchanges, the President of the NEM Foundation, Lon Wong, wanted to go further. He said, “We believe that NEM provides the best technology platform for creating custom tokens and ICOs, and the creation of a NEM-focused exchange will make NEM an even more attractive and easy to deploy solution.”
“The NEM exchange will function like a typical cryptocurrency exchange, but with a NEM twist. Popular cryptocurrencies and trading pairs will of course be available – including XEM, the native currency of the NEM blockchain. But the NEM exchange will also provide priority support for those who wish to easily offer NEM-based tokens to the public, whether through an ICO launch or simply listing as a tradable asset. This will help avoid the challenges of negotiating an ICO or waiting for a general purpose exchange to approve its listing, as well as provide traders with a trusted hub for NEM-based investments. And by building it as a traditional exchange, NEM can prevent the proliferation of scam tokens that often plague totally open and decentralized exchanges or ‘dexes.’”
The most important part of the COMSA structure is the COMSA core, which “monitors incoming transfers of cryptocurrencies or tokens into a COMSA master account with the final destination details embedded in them. It then locks or burns that amount in the COMSA master account. At the same time, it also unlocks or issues equivalent cryptocurrencies or tokens on the corresponding blockchain and sends them to their final destination account.” Thus, COMSA CORE is a conversion network, allowing for cross-coin or -token transfers across the network.
With COMSA CORE, I could send Tom Heavey BTC and he would receive an equivalent amount in ETH. Or he could send me an NEM based alt-coin token and COMSA CORE would convert it to one of the major currencies. It will make transactions between ICO’s and other parties easy, simple and without having to use a major exchange.
In order to support all of this, COMSA CORE “consists of a controlling application, an oracle application and 2 mijin private blockchain networks built on 9 cloud server machines, which are distributed globally to achieve zero-downtime token conversion service.” It is not a public network and only has one auditable API node. With this architecture, COMSA CORE will be able to handle 50 transactions a second (4.32 mln tx/day) and zero-downtime ledgers, which have provided continuous service for the last 18 months. The system will also have a two-layer ledger, one dedicated for conversion between native cryptocurrencies and pegged tokens and the between pegged tokens.
The other piece of COMSA’s ecosystem is the COMSA HUB, “a software for licensed holders of mijin private blockchains to control token balances between master public blockchain accounts and internal private ledgers.” It is an independent service installed on the mijin private blockchain and controlled by the enterprise using its services. Similar to COMSA CORE, which handles cross currency pegging and transactions, COMSA HUB facilitates pegging and transactions between a company’s private and public blockchains and on their private blockchain network itself. It does this by doing the following:
COMSA HUB monitors incoming transfers of cryptocurrencies or tokens to the company’s public master account with final destinations included in a message. It locks that amount in the company’s public master account. Subsequently, it creates the equivalent private tokens inside the company’s mijin private blockchain and sends it to the corresponding account. When it detects an outgoing transaction by receiving an incoming transfer to the company’s private master account with the final destinations included in the message, COMSA HUB burns these tokens on the mijin private blockchain and unlocks the cryptocurrency or tokens on the public blockchain and sends them to the corresponding address.
NEM was created by an anonymous developer, UtopianFuture, who amassed a team of developers on BitCoinTalk forum and launched the coin on March 21, 2015. Originally, it was called the New Economy Movement, but later renamed. At its inception, 8,999,999,999 XEM tokens, the currency of NEM, were distributed evenly, at 2,250,000 XEM per person, at launch to 1500 stakeholders.
Currently, the top 500 holders of XEM control 70% of the total supply. This is a big issue for me. XEM is not well distributed. A few very large holders control almost the entire supply of XEM. This could be one of the reasons why the currency has appreciated almost 100,000% since its inception, as the traded supply of the tokens is much less. I would be very interested in seeing how much XEM has actually been traded and how much remains in these initial accounts.
NEM’s Proof of Importance consensus algorithm is designed to incentivize spending, as well as holding. This is for the purpose of circulation is creating a new economic system – as opposed to margin trading and short term speculation
Eventually, UtopainFuture stepped down and the NEM Foundation was formed, like its Bitcoin counterpart, it serves to promote NEM and its application globally. On NEM website, the current members of the Foundation and its council are listed.
I’d like to preface this next part to say that in its infancy, many members of the crypto community kept their identity hidden or were drawn to the community from different walks of life. Some of these people have questionable pasts, however, once they enter public life, their actions outshine any misdeeds or problems. However, with legitimacy comes publicity of these issues, especially for the leaders multi-billion dollar crypto coin foundation. Until this point where I came into contact with COMSA, I had never heard of NEM other than seeing it on coinmarketcap.com. Whether my ignorance was due to Bitcoin’s and Ethereum’s dominance of the crypto space, or if the coin was just used in Asia, I can’t say. What I can do now though is provide commentary on the current makeup of the NEM foundation
The current president of the NEM Foundation Lon Wong, was previously the Vice-President of the Association of Consulting Engineers in Malaysia and also graduated with a Bachelor of Engineering honors degree in Electrical Engineering from the University of New South Wales, Australia. Lon’s current company Dragonfly Fintech is closely associated with NEM.
The Vice President of the NEM Foundation Jeff McDonald, was an English teacher in Korea from 2008-2017. He received a B.A. in Psychology from Oklahoma State University and a M.A. in Religious Studies from Kansas University. His first tech job began in January 2017 as CTO of LUXTAG, another startup associated with NEM. His top three endorsed skills on his Linkedin are teaching, curriculum design and Korean.
NEM Council Members
Takao Asayama is the head of the Tech Bureau, the Japanese Fintech company charged with launching COMSA, mijin, and the Zaif Exchange. He founded the company in 2014 in Japan. Most of the information on Takao is in Japanese, so I have little to go one with him.
Kristof Van de Reck, Regional Head Europe, was a management consultant and quality manager maintenance for VLM airlines. His number one skill on Linkedin is Aircraft Maintenance.
As for the founding members, only one has a Linkedin profile, Erik Van Himbergen, a “Freelance Business Analist” (he’s dutch?). The other founding members are QM, Ewan (no last name), Leon Yeoh and Kailin O’Donnell, none of whom have Linkedin profiles.
So for all intensive purposes, the NEM Foundation team do not have the clearest backgrounds, nor do they have relevant experience in the field they are now leaders of. Again, I’ve left out the entire Japanese contingent of NEM, who were added in the last few years. I’m pretty dumb when it comes to Asia, so please correct me if I’m wrong. But the global team definitely raises a few flags, I just don’t know how serious this issue is.
As I can make out now, COMSA is a part of the Tech Bureau, founded and run by Takao Asayama, who is also a member of the NEM foundation. Lon Wong, president of the NEM Foundation, is also apart of the ICO Committee and so is Vice President Jeff McDonald.
Furthermore, JAFCO, the VC partner that has made the $15 million USD token pre-sale buy, also provided ¥1.6B in Series B funding to the Tech Bureau at the same time. FISCO and Nippon Technology Venture Partners, two other VC funds who partnered with JAFCO for the COMSA investment, also provided $6.2 mln in Series A funding to the Tech Bureau in May 2016. FISCO’s CEO, Hitoshi Kano and Kazutaka Muraguchi, CEO of Nippon Technology Venture Partners are also on the ICO board for COMSA.
The token sale will be launched at 14:00 JST on October 2nd, 2017 and closes at 14:00 JST on November 6th, 2017. Below are details of the token sale:
- Token sale participants will receive 1 COMSA (Symbol: CMS) token per 1USD equivalent contribution. No cap is set.
- At the end of the token sale, based on the number of tokens issued for the participants, an equal number of CMS tokens will be issued and issuance will be locked. In other words, 100% more will be issued over the subscribed number.
- Of this 100% more, 10% will be distributed as referral bonuses to token sale referrals. 40% will be distributed to the existing management team, stakeholders, developers, employees, contractors, and COMSA ICO committee management. 50% will be retained by Tech Bureau for future development, future distributions, marketing, partnerships, compensations, and expansions.
- As a result, 55% of the grand total will be distributed to the contributors.
The idea behind COMSA is really good. I have a few projects myself that I’d like to bring to the team to get their “white glove service.” If it actually can do what they plan, a whole host of cash generating enterprises are going to be lining up to use COMSA’s service. Their token model is well thought out and I’m ok with how they are doing their capital raise. It will benefit the company as a whole in the long run to get a proper valuation at first and then expand from there.
I have reservations about the NEM Foundation though. Their motivations in all of this and how many XEM tokens they own is unclear. I’m doubtful of their marketcap and I’m left at the end of this piece with many questions still unanswered due to NEM’s hidden past.
If someone can clarify NEM, the foundation, the Tech Bureau and COMSA to me better and shed some light on this project from Asia, I’ll happy change my view. Until then I remain undecided.