Acknowledgement

Previous Updates

Jason Chen

LayerTech
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ORIGINAL PLEDGES START
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-DEVELOPMENT

--Develop Price Arbitrage Platform

--Develop Fund Management Market Place

--Develop Enterprise Crypto Wallet

--Develop Asset Tokenization platform

--Build an EC marketplace on top of the previously mentioned platforms


-MARKETING

--Focus on regulatory guidance to lay the groundwork needed to bring various industries onboard

--Demonstrate to the financial industries that adopting Factom protocol can reduce their overhead and improve compliance

--Advocate the use of the Factom Protocol in notarizing crypto financial products/services

--Commit to use Factom in financial sectors
----Equity
----Options
----Futures trading
----Wealth management
----Real estate title commitments
----Tokenizing real estate assets


-TESTNET

--Two Testnet nodes

-OTHER

--Pledge $100,000 to ensure two + years of runway

--Pledge 25% of FCT rewards towards legal counsel and other community interests

--Retain all awarded FCT for staking for the first year

--Clarify legal liabilities and share knowledge with the community

- PLEDGED EFFICIENCY

2 nodes: 25% first six months then 50%
1 node: 25% first six months then 50%
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ORIGINAL PLEDGES END
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Relevant links:
- Forum Q+A
- Aggregated pledges
- Application
- Supporting documents
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Jason Chen

LayerTech
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ORIGINAL PLEDGES START
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- DEVELOPMENT
The Price Arbitrage Platform is progressing well. LayerTech created MVP and is currently wrapping up alpha version of the platform in preparation for production testing. A new developer based in Paris was on-boarded during third quarter of 2018 as well as two support staff based in London and Osaka. Once the alpha version is release, LayerTech will reevaluate our timeline based on general market condition and priority of our other projects.

Both Fund Management Market Place and Enterprise Crypto Wallet projects are on hold due to resource constraint. Our Asset Tokenization Platform was not meant to be developed until at least two years into the future. But there has been some leads that might push up that timeline significantly. We hope to share an update during 4th quarter, if not sooner. Lastly, DeFacto has developed an open source EC marketplace. Instead of duplicating efforts, LayerTech plans to integrate their version into our platforms.


- MARKETING
Much of the work here will be disclosed in full detail as part of our Asset Tokenization Platform project once the NDA has been lifted. However, below is a small taste of efforts LayerTech has made in laying the groundwork for adoption of Factom Protocol in the financial industries.

  • International Blockchain Congress 2018
  • 34th Annual Futures and Options Expo
  • FinTank Blockchain Summit 2018
  • Princeton Fintech & Quant Conference Fall 2018
  • CFCT Fintech Forward Conference 2018
  • British Consulate-General Technology Trade Mission
  • FinTex Roundtable on OCC Charter

Not a full list, but contacts made at these events have already bare fruits and will become more apparent at Q4 and beyond.


- TESTNET
To be honest, LayerTech dropped the ball on the Testnet nodes. After being onboarded, we wanted to seek clarity on minimum specs for testnet nodes due to cost consideration and forgot to follow up. At current FCT price, that concern is even more relevant since it will double our infrastructure cost. We will ask the Guides and Core-Tech committee for clarity this coming week and will spin up two testnet nodes based on the feedback.

- OTHER
Most of the items on the list are in progress and LayerTech is still fully committed in fulfilling them.

- PLEDGED EFFICIENCY
In progress and still fully committed.

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ORIGINAL PLEDGES END
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Due the scope of LayerTech's goals in the original pledge list, it will take a while for the community to see our positive impact on the ecosystem. Because of that realization, we consciously took on more responsibilities until our longer term commitments bear fruit. Below is a complied list of LayerTech's short and medium term non-pledged contributions to the ecosystem, demonstrating our immediate value while we continue to chip away at some of the bigger projects. (not a full list of our non-pledged contributions)

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NON-PLEDGED CONTRIBUTIONS START
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Governance

- Initiated the push for current committee structure to better coordinate community efforts
- Participated in every ANO and Guides Meetings (save one guide meeting due to mistake in scheduling)
- Active in Governance & Legal Working Group, Contributions Committee, and Exchange Committee
- In the future, will be active in Marketing Committee
- Help organize the upcoming ANO Retreat

Outreach

- Attended both Factom Inc's Austin and Chicago Hackathons
- Organized Developer Relations Committee to explore better outreach efforts
- Plan to integrate Developer Relations Committee with Marketing Committee to start community organized hackathons
- Will create local meetup to build local Factom community
- Will create framework for educational workshops as part of local meetups and community hackathons

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NON-PLEDGED CONTRIBUTIONS END
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Xavier Chen

LayerTech
Hello ANO Community Members,

Below are the updates since end of 2018.


Application Development

As part of our campaign pledges, LayerTech listed three applications we planned to develop using Factom technologies: Price Arbitrage Platform, Fund Management/Custodial Wallet/Exchange, and Asset tokenization. At the end of Q4 2018, all of our energy were devoted to Price Arbitrage Platform. And due to FCT price, we couldn't deploy more resources toward the other two projects.

Since then, we have tested out the Arbitrage Platform but decided the profit margin and volume was not compatible with our long term vision. We originally want to do ICO based on this platform, but because the business fundamental is not solid, it would be irresponsible to go down that path. Q1 of 2019 we mothballed this project and integrate components of it into other projects (e.g. order book management, order matching, and order routing). I will expand on this other project in the future.

Q1 our focus shifted over to the Fund Management/Custodial/Exchange Platform. Very quickly, we found a partner who not only share the same vision but also have other resources beyond technical. This partnership means the Fund Management/Custodial/Exchange Platform moved out of LayerTech into another entity to better align incentives. Once this project is ready for public consumption, we will share the news here. Until then, LayerTech as an entity is not involved.

Q1 of 2019 we also moved very quickly on our vision of asset tokenization. As mentioned in the last update, asset tokenization was not in our immediate timetable. However, various partners we aligned with between Q4 2018 and Q1 2019 significantly sped up that timeline. At the moment we implemented or implementing tokenization projects in two different industries, closing leads in three more, and have outstanding leads in four other. Each project exist outside of LayerTech as separate entity to align with our partners, so similar to the Fund Management project, we can't disclose the specifics until our partners give the go-ahead.

Due to the restructuring mentioned above, LayerTech has shifted its application development into other entities. The wider Factom community will hear about these projects in the near future once they are ready for announcement. Select members of ANO members already know about some of them if verification are needed. Because of the sensitive nature of those projects, LayerTech will no longer provide updates on them as part of our original pledge.


Business Development

With our partners, LayerTech co-founded two separate companies to handle business leads. One focuses specifically on Asset Tokenization and another focuses on all blockchain related solutions. Our business development efforts are substantial, ranging from supply chain, cybersecurity, entertainment, to legal. This is on top of our existing work in real estate, commodity, finance, etc. As these business leads develop into a mature product, LayerTech will share with the community.


Marketing/Outreach

Due to work performed for FAT Grant #1, we have a very good inroad with the academia. So far, we have extensive network with blockchain faculty members from Northwestern University, University of Chicago, Loyola University of Chicago, and Depaul University. Latter part of Q1, we also got introduced to MIT, Harvard, and Yale blockchain network. We will continue to cultivate these relationships and participate in various events to recruit students for internships and jobs. Furthermore, many of these faculty members participate as advisors to various projects outlined above.


Legal

LayerTech team member Shuang participated in every aspect of the community legal needs even before LayerTech got on-boarded as ANO. To get a full list of what has been done in this area, it would be best to read @Matt Osborne summary:

https://factomize.com/forums/threads/legal-research-working-group-update-jan-2019.1454/#post-12958
https://factomize.com/forums/threads/legal-research-working-group-update.1861/

At the moment, a large part of the legal research cost is subsidized by LayerTech's operating cost. We are operating at 25% efficiency with more than 25% going into the legal expense. What's remaining effectively put us in the infrastructure ANO category despite our various business development projects.


Core Development

LayerTech's Tom joined the core development team during Q1 of 2019. Tom has kept a weekly journal of his progress while diving into the core code. He has also worked out auxiliary projects related to his position as core developer. We did not share his notes directly due to some sensitive information. However, we will publish a cleaned up version this weekend and reach out to each ANO individually to share our findings in a less public setting.


Governance

Since elected, Layertech participated in Marketing Committee, Exchange Committee, and organized the monthly ANO meeting and our first ANO retreat. However, during Q4 of 2018, our participation has dropped significantly due to limited bandwidth and increased priority on the business development front. End of Q4, LayerTech took a step back on community governance. So far, we have resigned the position of chairing the monthly ANO meeting. In the coming week, we will also withdraw from Marketing Committee and Exchange committee.

This should not be interpreted as lack of faith in community governance development. It is actually the opposite. Since ANO retreat, many ANOs have stepped up to take on leadership roles. Seeing that trend, LayerTech has been supporting governance efforts behind the scene. We believe it is prudent to nurture new talents and encourage the momentum of social decentralization. Furthermore, our outsized involvement in the legal work can cause conflict of interest concerns. Taking a step back is also a proactive measure to limit scope of involvement.

Jason Chen

LayerTech
Hello ANO Community Members,

Application and Business Development

As mentioned in the previous update, members of LayerTech moved various projects outside of the ANO entity in order to create better incentives with our partners. We were hoping for some kind of announcements during Q2, but these large projects move at their own pace and we are at the mercy of factors outside of our control. When the news is authorized for release, we will share it outside of LayerTech update. This is merely a placeholding reminder that we have not forgotten about our initial campaign promises.

One piece of information that can be shared is that through a partnership with members of DBGrow, these projects use not just Factom based technologies but also FAT. We are excited to showcase FAT capabilities and encourage all community members to continue their support because LayerTech strongly believes FAT will be the future of Factom Protocol.

Legal

Please see @Shuang Leng contributions to LRWG contained in the update below:

https://factomize.com/forums/threads/governance-legal-review.669/page-2#post-17632


Core Development

The essence of LayerTech’s core development work was meant to be released and shared with the community prior to the grant round #3 as part of a larger strategy to improve core development. This way the community can properly evaluate the amount of work going into the core development by LayerTech. That timeline was not achieved which puts us in a tough spot to defend our position in public similar to grant round #1. Instead of going through the same situation and have our intention and integrity questioned, LayerTech made a decision to pay for the core development grant #3 out of our own pocket. This decision was made despite the fact that we are negatively impacted by low FCT cost the same to all other ANOs. But by grant round #4, we hope the community is able to properly evaluate our contribution and make decisions accordingly.

Governance

LayerTech had been a major contributor to Factom governance since day one. We were the one who pushed various initiatives that is now a key aspect of our governance structure. Some of the more obvious contributions are committee structure, monthly ANO calls, private ANO chat/forum, and an annual retreat. We also contribute in a less obvious manner when it comes to broader strategy and community priorities.

However, all of those contributions were mere bandaids to more systematic problems that exist in the incentive to participate in community governance. They were never meant to be permanent. Instead, LayerTech and other ANOs put forth various proposals privately to tackle these systematic issues. But the pushbacks were too great at that time because the problems were not apparent to all community members. Without the ability to see the problems in front of us, it was futile to push for structural reforms. Because of this realization, a conscious decision was made to take a step back and wait for the right moment when these structural issues are exposed. (Hence our focus on business development and partnerships)

Right now we are in that state of crisis where the disincentive to participate in community governance is exposed for all see. Furthermore, there also exist ill-designed incentives that exacerbate internal conflicts during the ANO selection process, community grant pool distribution, and ANO enforcement/removal process to name a few. We are at a point where we should tackle these issues or they will permanently create scars in the fabric of our community. Even if the FCT price goes back up to a healthy level, a higher price can only cover up our root problems for so long before they rear their heads again. Similarly, the current effort to rebrand the protocol should also be part of a large attempt to rebrand our DNA.

We are providing all of this context to explain why we will be more active in governance in the next couple of months and why we will be pushing for various reforms alongside other ANOs. Our shift in priority is another reason why we did not apply for any FCT from the current grant pool. When pushing reforms in sensitive areas like the grant pool, the criticism of being self-serving or greedy will inevitably come up. We want to demonstrate that our action in putting forth these reforms is not driven by current or future monetary gains.

Once current grant round concludes, LayerTech will put forth a list of reforms based on our own ideas and proposals put forth by various ANOs since the beginning of our community. These proposals can become Factom community’s M4 (Milestone 4). It would be ideal to organize a 2nd annual retreat and coordinate rebranding effort as part of this M4 campaign. We hope this will be the beginning of something new and reinvigorate our core strength.

Look forward to exciting conversations!
Current Update: Acknowledgement

Xavier Chen

LayerTech
Hello Fellow Community Members,

I want to confessed that I wrote an update several months ago, but it wasn’t posted. Similarly, I wrote a resignation letter two weeks ago, but decided against posting it and just let the situation take its course. My line of reason for action (or inaction) in both situations is the same. Making both posts mean following up with endless back and forth because my posts will not be satisfactory to the community. Those anticipated public and private exchanges will consists of myself “defending” LayerTech in a futile manner because I agree with most of the criticisms:

1. LayerTech has not lived up to its promises made last year and earlier this year.
2. Questions of whether resources taken from community is worth the “investment”.
3. Lack of communication about what and how we are contributing to the community.
4. Lack of public participation on community matters.

While those conversations are important, it won’t materially contribute to the success of our projects during shutdown when we are fighting for the survival of several of our projects. The back and forth will make all of us feel better during time of uncertainty because we will feel like we are doing something substantial. But that feeling is just a facade and spending time arguing in order to feel better is a waste of temporal resource and mental energy. (We have since came out of the other end stronger primarily due to efforts of key people like Julian) I know some of you will disagree with my assessment and course of action outlined above and you might be right, especially with the benefit of hindsight. But again, arguing about it feel like a time sink… especially when arguing with the public who are not stakeholders (shareholders or project participant).

So what changed? Well, one of the community members I highly respect reached out to me and made a good point. He pointed out that the community just want to know that LayerTech is still here and “fighting”. Just publicly acknowledging the commitment to the protocol can do wonders even if that sounds extremely trivial. I’m paraphrasing here and it’s up to him to disclose himself. But after some thinking, I agree with him. I took it for granted that LayerTech’s commitment to the protocol is a given to outside observers since survival and success of our projects materially contribute to the success of the protocol.

To make it extra clear, LayerTech and myself are very much committed to the success of Factom Protocol. While the governance and token economics need a lot of work, the technology is solid and I work tirelessly advocating the tech every chance I get.

I’m not saying this in order to change the demotion situation. As far as I concern, the community has every right to demote LayerTech under current guideline. And even if LayerTech is demoted, I will still be working toward the success of our projects. And success of those projects will massively contribute to the success of Factom Protocol whether or not LayerTech is an ANO. At the end of the day, this is a win-win scenario for many of the ANOs. I’m making this post to primarily address questions about LayerTech’s commitment to the success of our tech and point out that my public silence does not lessen my enthusiasm for the protocol.

(For those of you who spend a lot of time thinking about our governance and token economic problems, you might recognize that the above scenario is one of the key issue facing our protocol. For many development oriented ANOs (tech and business), it is a win-win situation for the protocol with the ANOs shouldering most of the risk. The calculation changes if price of FCT goes above an arbitrary threshold)

<5 hrs>
 
Hi Xavier,

Thank you for this post and completely agree with your analysis and candidness. People probably do not know that me, Maarten and Sebastian have had countless talks with you and for instance Julian and Devon both in person and many zoom meetings about projects, government grants and business(es) around the protocol.

I am confident in due time the protocol and its stakeholders will appreciate what companies like yours and people like you are doing for the protocol both directly with projects, but also behind the scenes towards companies and relationships around the protocol. I am also confident that you will succeed no matter whether you will be an ANO or not. I recognize the lack of updates on your end and the split you are in, not wanting to hurt your business by being open about what you are doing. At Sphereon we have been in that very same boat and as we stated that is one of the reasons why we removed Sphereon business out of the equation towards the community and standing parties.

The protocol should have a level of trust of people that are working day in day out around Factom based technology, being backed/supported in public by other people that are doing exactly the same. I am not talking about being on Discord or the forum a few hours, working day in day out with tech/clients/bizdev. Yet we find ourselves in a situation where that apparently isn't enough and at the same time parties that have clearly done next to nothing still have high standing. The types of projects/clients mean you cannot expect results in months or quarters. The protocol has to look at itself. Factom Inc, LayerTech/DBGrow, Sphereon, Off-Blocks, DeFacto, TFA etc. They probably all have multiple projects and clients running in various stages (of some I know that is certainly the case).

How many big names do we currently have on mainnet? What do people know about? Exactly zero
That is not because there is no interest, that is because the projects take a long time development and business wise. During all that time you cannot really disclose anything. Knowing all you guys are doing, BIF will continue to support and back you up.
 
This is such a waste Xavier, both ways, for the protocol and you. I don't think I am wrong saying that your demotion is solely due to your utter lack of communication. Nobody ever asked you hours of explanation, but man, a whole year without pushing an update in your thread or on Discord. Why? I can't comprehend. How are we supposed to know what you just wrote, that you actually care about Factom, how? You would have dropped a message 1/10th of what you wrote today every 3 months and I strongly suspect you'd have most support today. This is silly :( Heck, you would have posted that acknowledgment when the demotion warning triggered 90 days ago, that I'd have given you back support. I can only come to the conclusion that you gave up on the community long ago. Community is integral part of blockchain (and yes, that's often annoying), this is a pitty you ignored that. Again, this is such a waste.
 
I've always said that the community deserves a basic level of respect. Regardless of who you are, you touch base every now and then even if it's just to reaffirm commitment.

Group thinking is tough and can lead to unfortunate decisions. Layertech has obviously been touching base, but with a selective part of that community who, assumingly, aren't really the right crowd to then push them towards public communication. With that in mind, I reached out to Xavier yesterday. The fact that he was very quickly receptive to what I said tells me he hasn't given up on the community. He just needed some input from another 'group'. This kind of interaction needs to be part of a healthy community too, and I should have messaged him much earlier.

Part of the non-communication has also been a deliberate choice, and I respect that LT is fine with both outcomes of the demotion process and that it wouldn't impact their efforts. It would just feel like such a shame. They've been doing and are doing fantastic things, and meanwhile we have parties at nearly twice their standing who do absolutely nothing.

All this tells me two things. Layertech's communication has been failing, and our standing system is failing. What do we do? Which of the two adds more value? Do we carry out the removal of arguably our largest bizdev ANO or do we finally get our heads together to sort out standing and ANO requirements?

To be honest, I prefer the latter.
 
Hi Xavier,

Thank you for your candid post. You have done a lot of great work in the past and I have fond memories of the sterling work you did with the community when we had a regular ANO meeting for example. It is difficult for the community to know what you have been doing without some form of regular communication, so if there is any fall-down it is there. Evidently you have been communicating with certain members of the community, like Niels, who have defended your position because they know the work you were doing. That is a great reflection of the respect they have for you, it also illustrates one area in which some improvement is needed.

I do not accept that you cannot give us some insight into your work with breaking commercial confidences. We do not need to know the detail, we certainly do not need to know names at an inappropriate stage. Just keep talking with us please.

The situation probably says more about our broken standing system than anything else. We need a standing system which is more objective about an ANO's benefit to the protocol. Thankfully there is work in hand to address this which should shortly come before the community. It will be our opportunity to "get our our heads" together to sort out standing and ANO requirements. Lets focus on this and recognise that right now the removal of one of our largest business development ANOs is inappropriate.
 
I do not accept that you cannot give us some insight into your work with breaking commercial confidences. We do not need to know the detail, we certainly do not need to know names at an inappropriate stage. Just keep talking with us please
Mike that is exactly the problem. The types of deals/parties and industry are way too big to give the community insight before everything is set in stone and the projects are far enough along.

This shows exactly the problem and disconnect and why people will get nothing from parties like Layertech. Everything they disclose can only hurt their projects so they have to choose to be hurt from the protocol's perspective. Simply because in current standing system there is not much of another choice.

The few FCT are easily calculated and the reputation risk from the protocol side is way smaller than the reputation risk from the client side (the protocol is a risk from that side as well to be clear)
 
People are thinking in 'small' customers/projects, whilst parties like Layertech are doing mainly big customers/coalitions/projects with potential impact/implications on a global level. Do you really believe they are going to risk something like that?
 
The problem is that we apparently don't hold much value for people with a proven track record, in the know, and backing a party like that.

We are focused on our need to have these parties provide details they are not ready to disclose to some teams in here. A symptom of the dynamics around trust, inability to think big and trying to make everything objective
 
Mike that is exactly the problem. The types of deals/parties and industry are way too big to give the community insight before everything is set in stone and the projects are far enough along.

This shows exactly the problem why people will get nothing from parties like Layertech. Everything they disclose can only hurt their projects so they have to choose to be hurt from the protocol's perspective. Simply because in current standing system there is not much of another choice.

The few FCT are easily calculated and the reputation risk from the protocol side is way smaller than the reputation risk from the client side (the protocol is a risk from that side as well to be clear)
Hi Niels,

I do not in any way expect disclosure of anything that will harm the ANO, their clients or the protocol.

I do expect some reasonably regular communication about what an ANO is doing given that they are part of a community. That communication does not need to go into inappropriate detail. I don't think we need insight of the types of deals/parties and industry we just need to know the sort of work being done and what they are focused on.

In answer to your subsequent post I don't expect anyone to risk any commercial venture by premature and/or inappropriate communication. Neither do I expect to be left completely in the dark about whether an ANO is functioning or not.

To be clear, given Xavier's statement and your message of support I do not think we should lose such a significant business development ANO just because of the way the current standing system works. We need them. We also need them to be as open as they can be about what they are doing with the protocols resources.
 
Well the problem is not lossing them from the technical and usage perspective.

The problem becomes whether a party like that wants to become an ANO again. See the problem here? We have small teams with all best intentions. We have teams that are doing a lot for the protocol but mainly outside of the vision of the the other teams. We have a need for more established business to enter the ANO set and how do we treat parties that can make it happen?
 
The problem is that we apparently don't hold much value for people with a proven track record, in the know, and backing a party like that.

We are focused on our need to have these parties provide details they are not ready to disclose to some teams in here. A symptom of the dynamics around trust, inability to think big and trying to make everything objective
Hi Niels,

We do NOT, in my opinion, need these parties to provide details they are not ready to disclose. Although I am in favour of making our requirements of an ANO crystal clear and measuring performance reasonably simply and objectively I can fully understand that there will be subjective aspects to take into account.

I agree that we need to create the environment where the dynamics around trust, and our ability to think big improve significantly.
 
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