SingularDTV and a SNGLS Visa-Debit Token Card

Be Your Own Economy!

Zach LeBeau, CEO of SingularDTV

Looking back on the incredible journey SingularDTV has taken with the #BestofSingularDTV Series. This article was published on April 28th, 2017.

By Zach LeBeau, CEO of SingularDTV

When Mel Gelderman and David Hoggard of Monolith Studios told me about their Token Card venture back in January, I immediately wanted it for SingularDTV. A SNGLS backed debit card is a natural expression of SingularDTV’s mission to empower artists and creators to, “Be your own economy!” For me personally, the need to have a fiat bank account diminishes considerably if I can wield a SNGLS debit card. I’ve heard our CFO, Arie Levy Cohen, say many times, “Cash is dead. A system of debits and credits is the only future.” Long live crypto!, more specifically, long live the ERC20 token! A standard thanks to many brilliant minds, particularly Simon de la Rouviere of ConsenSys, Fabian Vogelsteller, Alex Van de Sande, Joseph Chow and others.

Token Card is launching their token — TKN — on Tuesday, May 2. For more details visit their site, Tokencard.io. An additional 5% bonus of TKNs will be generated when participants use SNGLS during the launch. Due to the fervor of the crypto community to participate in token launches, Token Card will most likely reach their goal within the first few blocks. Many will miss out on the top bonuses. Whales and exchanges could also push many out as well. In addition, the way Token Card has set up their TKN creation process, ETH will be processed in the same block received whereas SNGLS or any other ERC20 token will not. Therefore, it could be highly improbable to receive an early bonuses with SNGLS or any other tokens due to the demand. On a positive note, because of Token Card’s “overage period”, those that missed out will have the opportunity to participate. This is most likely where SNGLS token holders will benefit from the 5%.”

Nevertheless, extremely smart tactic to engage the existing ERC20 tokenized ecosystems. In fact, it’s a positive progression for the cryptosphere to start seeing ERC20 tokenized ecosystems for what they really are, a new kind of multi-dynamic blockchain business entity with various strata of value levels. This is the beauty of decentralization, it consolidates mechanisms and functions under one user experience. ERC20 tokens are the representation of this, a programmable multi-function utility/app/store of data/value token.

Just a quick tangent about the use of the phrase “ICO”. Technically, to use this phrase in reference to ERC20 token launches is inaccurate. ICO — Initial Coin Offering — is a term that was birthed to describe the many bitcoin clones and other “coin” clones that erupted over the years from protocols not as robust or programmable as Ethereum. In fact, coins really only have one utility — to act as a simple store of value with limited-to-no other functionality. They are coins. By “simple” value, I mean value not represented or manifested through a variety of dynamic functions. Tokens on the other hand can do so much more than coins, they can store complex, multi-faceted levels of value. Tokens are a completely different breed all together. Forget everything you know about bitcoin and pre-mined coins and that entire ilk of tech, ERC20 tokens are generated by a Smart Contract System (SCS), are highly programmable and have multi-functionality because of it. They transcend being just a coin, and through their array of functions become something much more — “tokens”. Technically, they are not “offered”, they are “generated”. Probably the most accurate phrase of what’s going on during an ERC20 token launch is to describe it as a “Token Generation Event”, but I’m not sure TGE has the same flare as ICO. Nevertheless, a coin does one thing, and a token can do many things. I do hope to see the phrase ICO disappear from the vernacular as tokens take over.

But back to SingularDTV and a SNGLS backed debit card…

As soon as our devs and I read over Mel and David’s whitepaper, a few interesting things jumped out at us about Token Card. Let’s take a look…

“Fees from card swipes will be assessed in the token being used to fund the swipe. These fees will be sent to the TKN Asset Contract. This contract over time will accrue tokens in proportion to the tokens held by TokenCard customers around the world.”

This is similar to SingularDTV’s “Fund Contract”. Being able to send fees, for example, is one basic and very useful function that can be administered by tokens. TKN utilizes this. When you hold TKNs, you hold claim to the fees generated through Token Card transactions. These fees are sent to the TKN and available to withdraw at the holder’s convenience.

“At any time, a holder of TKN can “Cash and Burn” the TKN for their pro-rata share of each token held by the TKN Asset Contract. The holder will irrevocably destroy the TKN, and in exchange, the TKN Asset Contract will transfer the underlying tokens to the holder. This mechanism ensures that in almost all conceivable market circumstances, the TKN token will have a market value at or above the assets contained in the TKN Asset Contract. If the value goes below, arbitrageurs will purchase TKN and burn it, yielding a dividend.”

This is extraordinary from the point of view of someone like me who spends a lot of time devising blueprints for new Smart Contract Systems. With SingularDTV, SNGLS holders benefit from fees/rewards in perpetuity. With Token Card, when you cash out, that’s it. And as more people cash out, those that remain as TKN holders split a bigger piece of the pie. It’s a game of “chicken” in a sense. How long can you hold on to TKNs as its Asset Contract grows before you cash and burn? Fascinating. I’ve not yet come across this model in the wild. I don’t think there’s another model like it that’s public yet. It’ll be interesting to see what behavior develops around this.

“Because TokenCard makes every other Token project better, it will grow rapidly whenever any one of the other Token projects sees growth. We forecast massive growth in the token ecosystem over the next two years, and will be there to provide real value to each token issuer.”

I agree with the above statement. Potentially, Token Card’s Asset Contract could be holding enormous value. It’s vital that this contract undergoes exhaustive security audits and bug bounties until it is proven to be impenetrable.

“A TokenCard customer holds DGX (A gold-backed token) and prefers to conduct her affairs in gold. She has dinner at her local Bistro, and the cost totals $50. This $50 equates to roughly 1.2 DGX. She swipes her TokenCard. TokenCard’s servers immediately withdraw 1.2DGX plus the Licensing fee from her DGX Wallet. The Licensing fee is 1%, so she pays in total 1.212DGX. 1.2DGX is exchanged by TokenCard for USD. These USD will be swept into TokenCard’s VISA account as float for the next card swipe. The remaining 0.012DGX is sent directly to the TKN Asset Contract, adding to the pool of assets backing TKN’s value. Since fees are paid in the token transacted in, the most popular tokens used for transacting will accumulate to the distribution contract, helping back the value of TKN. As described in the next sections, holding TKN has significant benefits that push its value above the cumulative sum of the underlying assets backing it.”

This is a good example of how Token Card works, similar to Xapo but with Ethereum tokens. The biggest difference is that the funds stay with the users and the fees are much smaller. Token Card’s 1% fee is sent to TKN’s Asset Contract.

“WireFrames and usability studies. These are not final, but we have put significant effort into specifying the user experience for the Token app.”

Looking forward to seeing this aspect. Second to security is user experience. Perhaps the SingularDTV community can be beta testers in some capacity?

In addition, it would be amazing if Token Card can tackle the below challenge…

“The network transaction option works for most people who are already familiar with Ethereum. However, as our objective is to allow non-Ethereum users to access the platform, we need other solutions. The first is a simple debit card or credit card purchase of tokens through our app. For certain assets with enough liquidity, we can provide a simple fiat to crypto exchange service. This is a relatively simple financial service to offer, however it may require regulatory approval and requires adequate fraud mitigation, and as such will be a feature not available in the MVP release, but most likely in the general public release instead.”

I guess this would be a good time to disclose that I’m not being paid nor have I been offered any TKN to write this piece — I’m not for hire! I’m genuinely excited about this application for Ethereum and ERC20 tokenized ecosystems. I do intend to personally generate TKN during their launch. I haven’t done a deep dive into their key management and security auditing practices, others are taking a look into that, but Token Card closed me with their concept and because of the energy of the team. It also gives me comfort to know that crypto-valley law firm MME — also SingularDTV’s law firm — helped with Token Card’s structuring. So I’m not telling you — the reader — to participate in the TKN launch. I’m only expressing my excitement for this new application and the value it potentially adds to the SingularDTV ecosystem by having our own SNGLS backed debit cards in the near future.

Looking at this new horizon of ERC20 tokenized ecosystems gives me a real and concrete feeling that parity with bitcoin is coming sooner than I thought. And definitely The Age of Tokenized Ecosystems is here. Last year parity felt far away, but now, with so many applications in the pipeline being built on Ethereum, a whole new world — a decentralized world — is upon us. Exciting times.

Zach LeBeau, CEO of SingularDTV