In October, we launched our Initial Coin Offering (ICO) for our native Zephyr token where we raised a whopping 1.3 million USD during the 30-day sale. If you’ve seen the latest stats for the Zephyr circulation supply on coinmarketcap.com, you will have noticed that (at time of writing) 125 million ZEPH has been distributed. The Zephyr token has a total supply of 2 billion, so that leaves 1.75bn ZEPH currently sitting in Bitspark’s reserves.
This might leave you wondering what our plans are with the remaining pools of ZEPH and how we are using the funds raised during the ICO in 2017. Here’s the short answer:
- ZEPH is an integral part of our service, designed as an incentive token to accelerate global growth
- We have put in place a 25% buy back mechanism which together with the reward system creates a positive feedback loop to apply positive upward price pressure on ZEPH
Funds raised after ICO are allocated towards fine-tuning our product, technology development and growing the network - with Tajikistan as the first new market to be added
Life after the ICO
After the ICO closed, Bitspark raised 1.3 million and had a remaining 1.75 ZEPH left in its reserves. And just as with other companies, token holders like you want to be informed about what the company plans to do with those reserves and have a guarantee that they won’t flood the market with their own tokens (follow the weekly Bitspark Show on youtube.
Ripple is a good example of this because after their XRP token saw incredible price gains, the company found itself sitting on $80 billion worth of XRP. It could potentially flood the market and cash out hundreds of millions a month, but luckily it isn’t doing that. Instead, it placed 55 billion XRP in an escrow account with a set limit on how much it could release a month. As reflected in their quarterly reports, Ripple never even came close to taking out that limit. For Q4 in 2017, the company sold $71.5 million worth of XRP which represented 0.075 percent of the total $95.4 billion traded. They do this to circulate XRP but mostly to quickly bring in money for a pricey acquisition or fund new projects.
Bitspark taking a very different approach:better product, bigger network, new markets
Our approach both for funding business growth and circulating Zephyr is sustainable in the long-term. We are dedicating the 1.3 million raised after the ICO to launching our remittance network in Tajikistan in partnership with the United Nations Development Programme (UNDP). Next to that, we are currently investing in further expanding software development, digital marketing, local sales team hires and hiring new customer support representatives in order to grow the network elsewhere. We will circulate Zephyr through a rewards mechanism aimed at our network users coupled with a 25% buy back mechanism to maintain upward price pressure.
We’ve put together a quick overview for you to see what we’re focusing on at the moment:
Investing in Development
Improving Bitspark’s Products and Services
We operate mainly in markets where there is a lack of financial literacy. That’s why it’s critical for our network that we make adoption and usage of our platforms as easy as possible. It needs to be a familiar and intuitive experience both on the web platform and mobile app Sendy, v2.0, demo here.
We are currently redesigning the web platform, mobile app and landing page to increase usability and lower barrier to entry for existing and new users. The focus is on goal orientation processes across all functionalities such as sending, receiving, topping up and Zephyr rewards; clearer customer flows between products, streamlining data entry, prompts and responses. This will require significant front end and back end redesigns of existing Bitspark systems and will be ongoing through most of the first half of 2018.
Switch to BitShares Blockchain
We recently switched to the Bitshares Blockchain and decentralised exchange for a few reasons: high transaction speeds and scalability, they have a stable working product, it’s a decentralised exchange which offers lower counter-party risk and, most importantly, it enables us to create pegged cryptocurrencies. There are simply no other Blockchains in operation which can boast a similar array of incentives.
The move requires a lot of development and will be rolled out in parallel to our existing service, at first only handling lower amounts. We are currently focusing on the development and deployment of the BitShares gateway including trading bots, arbitrage opportunities and notifications.
Mobile app Sendy
With our mobile app Sendy, users can easily locate MTOs near them, top up their balances and transfer money to their relatives abroad. In 2018, we will complete the Sendy overhaul featuring new UI, workflows and Zephyr integration making it easier for anyone anywhere to sign up and get started. We will offer both web and mobile customers clear metrics on their Sendy rewards and how they can earn more money.
Investing in Network Growth
Reward incentives using Zephyr
Zephyr will be further integrated into our products where it will function as a reward mechanism for new users joining the network and for undertaking certain activities such as topping up Sendy balances or making transactions. This Zephyr distribution will be funded through our internal Zephyr reserves. Our strategy is that MTOs will be more inclined to join our network if they receive Zephyr signing up and continue to receive Zephyr for using the service. This will certainly bootstrap the global growth of our network because MTOs would be receiving free money next to all the benefits that come with our remittance solution.
To maintain upward price pressure, we will use 25% of the transaction fee to buy back Zephyr from the BitShares DEX. This effectively puts Zephyr in a positive feedback loop between network growth, usage and value where each positively influences the other. To enable these features, development is currently under way focusing on reward tracking and auto issuance mechanisms for both the web and mobile based platforms.
Marketing and Sales
Next to issuing Zephyr as a reward to boost network growth, in 2018 we will increase our marketing and sales efforts. We plan to list Zephyr on more exchanges next to BitShares which requires specialised marketing and we have added new team members to focus on promoting and expanding the Zephyr user base to existing remittance and cryptocurrency customers.
Tajikistan: putting everything into action
The first new market we will expand to is Tajikistan. In collaboration with UNDP, we are working on a pilot of Blockchain based remittances in the context of UNDP development projects and increasing financial inclusion for unbanked customers. And Tajikistan provides the perfect environment for our service.
It is a country with a heavy reliance on remittances as 1 million Tajiks migrate annually and use money transfer systems to remit their earnings home. Yet, an estimated 85-90% of the population is unbanked and relies on non-bank services for domestic and international payments. While internet penetration is low at 20%, mobile penetration is high at 100% which enables us to provide our mobile-based remittance services so that migrant workers and their families in remote areas can send and receive payments via their smartphones.
It’s a massive opportunity for Bitspark to improve financial access and inclusion nationwide.
Investing & trading Zephyr
If you want to get Zephyr tokens for yourself, it is currently trading on the BitShares DEX. At the moment, it is the only exchange where you can buy ZEPH, however other exchanges are welcome to list the token as well. Bitspark provides convertibility in the mobile app and through our website should you wish to quickly exchange Zephyr without the need to access the Bitshares DEX.
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