Cube3 Technologies Ltd

Cube3 Technologies Ltd is a small UK-based team. Team members are Mike, Tom and Will, with the addition of Pete who is primarily in an advisory role. We have capability and experience in business, commerce and academia with a real passion to improve the integrity of information used for decision making. Thus our motivation for applying to run Factom servers stems from our beliefs. We believe that business and political decision making can be improved through greater confidence in the fidelity of the information.

We have been involved with Blockchain related technology since 2016 and some of us participated in the original Slack before we all latterly became involved with Discord. We are currently running Testnet servers and look forward to answering the community’s questions about our proposal to become an Authority Node Operator.
 
Hi Niels, Thank you for the welcome.

I have just quickly read through the public answers to the questions attachment in your post. I must compliment you on the formatting of this which makes it very professional in appearance and easy to read.

One thing that strikes me is that one of the question answers is duplicated and another answer missing. "What vision do you/your entity have of the future of Factom?" has a duplicated answer which appears in "What is your/your entity's motivation for applying for hosting Factom Authority servers?" the original answer to which is therefore missing but was present in the automated feedback I received last night at 30/07/18 21:27.

The answer to the last question should read: Our motivation for running factom servers stem from our beliefs. We believe that business and political decision making can be improved through greater confidence in the fidelity of the information. It must be. We have personally suffered from poor decisions, particularly with regard to health issues, at governmental level. We can make a real difference. Blockchain technology is one of the most fundamental tools in our armoury to make this difference. Factom, in particular is well placed to be really significant. In addition we believe we have the skill sets to run reliable nodes and believe it is of the utmost importance that all nodes are run to the highest standards for the Factom vision to become a reality. Naturally we expect a significant financial upside over the medium to long term but this will not be realized without taking on considerable risk and expending proper effort to make sure the Factom network is operationally sound. With our unique skill set and current personal circumstances, we find ourselves in the exciting position of being able to provide support to this network at a time when the market conditions are less than favourable to other entrants (who may not be prepared to take on the significant time and financial commitments without more certainty on reward).

I am sure this can be easily resolved and look forward to hearing from you.
 
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Hi,

The google application form wouldn't directly take some of our answers, as they were a little long and instead we had to upload them as PDFs and reference the filename in the appropriate section. We are also attaching them to this post, in addition to our full proposal document and supporting material, so all the info is easy for people to find. We look forward to any questions.
 

Attachments

Hi Matt,

Thank you for your questions.
  • What pledges you are making to grow the protocol via grants (if any)?
We are applying as a pure infrastructure ANO with the primary focus on providing the network with robust, resilient and secure nodes. Therefore, we are not pledging to grow the protocol via grants in this submission.

The only exception to this is potentially applying for a grant to run a network-wide pen-test (Penetration Test). Although this won’t directly lead to EC usage, it could help increase the security of the network, which in turn would boost confidence and encourage external parties to use Factom.

We have identified some areas in which we would be interested in developing Factom applications; but this would be at a much later stage. These include the generation of fully traceable research work (in any area, but medical research is a prime candidate).

We are aware of the work of the ANO DBGrow in this area and would of course be happy to collaborate. It is an area that we have a wealth of experience in, with 2 of our team members being professional researchers.

The challenge of moving towards an open access society is more than just the integrity of research data, but also access to said data. Researchers are currently required to pay thousands of dollars to submit their research into publishing houses, which then charge universities for access. The alternative of free journals, which require the research still to be traceable and peer reviewed, will become much more feasible with the integrity of raw research data and publications being secured via the blockchain. (The current blockchain based journal https://ledgerjournal.org/ojs/index.php/ledger goes in the right direction but doesn’t secure the research data and prevent research bias).

We have the research and development capabilities to undertake these types of projects but for now our focus is 100% on providing the right calibre of nodes for Factom to have a strong foundation.

  • What pledges you are making to grow the protocol in general (via ANO payouts or simply by time/resource dedication)?
We are committed to directing 70% of the standard node payout to the grant pool, where it can be used to fund development projects that can grow the protocol. The grant pool provides the best route to growth by ensuring only the most viable projects get funded, on the basis of a clear set of deliverables. Directing such a significant proportion of the ANO payment to the grant pool is not in our short-term interests, but we feel it is clearly in the long-term interest of both the protocol and ourselves.

The remaining 30% of the ANO payment is only sufficient to cover our expenditure on servers and equipment; it will not cover our time & effort under current FCT market conditions. Furthermore, it is not even clear if the markets will be sufficiently liquid for us to liberate the necessary amounts. A very high-level summary of our approach to this problem is to:

1) Fund the costs for servers and equipment for up to 24 months out of our own pocket and commit to not liquidating any FCT until a significant uptick in volume and price.
2) Provide our time and expertise for free for up to 24 months.

There is some more detail on the specifics of this approach in our proposal document.

Clearly this is a balance of risk and reward. If our assumption that the Factom network will have grown significantly in value in 24 months time is wrong, then we will not be able to recover our funds and our time will go uncompensated. In contrast if we are correct, then Cube3 will be adequately compensated for the risk we have taken and be able to finance itself in readiness for further growth of the network.

We are also planning to undertake research in a number of areas including server hardening and best security practices. In particular, the optimal configuration of a centralized logging solution and the best approach for file-system audits to detect system intrusion. We plan to publish our findings, possibly subject to peer-review by other ANOs, so we can help all nodes be as robust and secure as possible.

If you have any further questions on this or any other aspect of our proposal please don’t hesitate to reply.


Kind regards

Mike
 
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Hi thank you for your application and above answer.

I have two questions:
1) At what price point would you see it as unfeasible to operate? I noticed you referenced $2.70 to be able to recoup your initial costs over 2 years. Is this the price point you would capitulate at?

2) Also, I noticed that your cost projections are linear - do you not expect any fluctuations/increase in operational expenses, nor any extra required investments the next two years?
 
Thank you for applying. A few questions I am asking all applicants,
  1. How many person-hours per week do you expect your team to devote to this ecosystem?
  2. How will these hours be distributed among your members?
  3. How will this be distributed among your ANO activities (open source project dev, proprietary project dev, protocol level technical involvement, governance involvement, marketing/promotion … )?
  4. Can you give a list of demonstrable metrics that the community could use say 6 months or a year from now if you are selected in this application to evaluate your ANO?
 
Hi thank you for your application and above answer.

I have two questions:
1) At what price point would you see it as unfeasible to operate? I noticed you referenced $2.70 to be able to recoup your initial costs over 2 years. Is this the price point you would capitulate at?

2) Also, I noticed that your cost projections are linear - do you not expect any fluctuations/increase in operational expenses, nor any extra required investments the next two years?
Hi,

Thank you for your questions. In response:


1) At what price point would you see it as unfeasible to operate? I noticed you referenced $2.70 to be able to recoup your initial costs over 2 years. Is this the price point you would capitulate at?

Our plan is to operate for a minimum of 24 months, regardless of the price of FCT. We have decided to work on this basis so it is clear to the community that we have no intention of selling off all our FCT in a depressed and illiquid market.

We have constructed a model with a price of FCT at $2.70 to demonstrate that after two years, we could still recover our initial outlay even if the price of FCT fell by 75%. If we felt the cause of such a low price was properly understood and there was good reason to believe it would eventually turn-around, the value of our reserves of FCT could be used to cover further operating expenses, potentially for another 2 years if the costs of server hosting does not change significantly.


2) Also, I noticed that your cost projections are linear - do you not expect any fluctuations/increase in operational expenses, nor any extra required investments the next two years?

We would be surprised if there were no increases in operating expenses during the next two years, because we fully expect the network to grow. Our modelling with linear cost projections is therefore only to demonstrate a worst-case scenario where such growth does not happen in this period. Factom’s dual token system means that when the FCT price is low the amount of EC usage and thus network usage should also be low. In this case, our existing server provisions will be more than adequate.

If there is a sudden increase in EC usage but a lag between this occurring and the FCT market price increasing we can accommodate this because:

  • Our budget for the Swiss server covers us for a 10 core system with 32Gb RAM which provides us with significant headroom. Our proposal documents have more details on why this was chosen. In addition, the hardware we will own and operate in a UK datacentre is even more powerful and always provides us with the option to utilize this if the network requires us to scale aggressively in a short period of time.

  • The founders of Cube3 also have sufficient cash reserves that could be injected into the company under the right circumstances. A sustained increase in network usage would be a clear indicator that our belief in Factom’s good growth potential is vindicated. Then, if the company’s reserves were beginning to run low and our servers were too close to capacity, we would further invest appropriately.

If you have any further questions on this or any other aspect of our proposal please don’t hesitate to reply.


Kind regards

Mike
 
Thank you for applying. A few questions I am asking all applicants,
  1. How many person-hours per week do you expect your team to devote to this ecosystem?
  2. How will these hours be distributed among your members?
  3. How will this be distributed among your ANO activities (open source project dev, proprietary project dev, protocol level technical involvement, governance involvement, marketing/promotion … )?
  4. Can you give a list of demonstrable metrics that the community could use say 6 months or a year from now if you are selected in this application to evaluate your ANO?
Hi,

Thank you for your questions. In response:

1) How many person-hours per week do you expect your team to devote to this ecosystem?

Our commitment is to provide a 24/7 on-call service to support our Authority nodes. This requires 21 eight hour shifts per week and theoretically requires nearly 5 people on normal employment terms to satisfy this, accounting for weekends, holidays and sickness. In practice, we are in a fortunate position of being able to provide this in the short to medium term with the founders working above and beyond to cover 168 person hours on-call per week. In practical terms, this means that if there is an issue with our servers, the system administrator on duty will drop what they are doing and attend to it until the matter is resolved, regardless of whether it takes 5 minutes or half a day troubleshooting with other ANOs on the Discord.

How many on-call hours will actually be utilized in a week is unknown. If we have done an excellent job of configuring and maintaining our servers and the network gets to a steady and stable state this may be very few indeed, but it may take some time until we are in this position.

To estimate the amount of effort we will need to apply to go through the work planned we have broken our development into three phases:


1533245226210.png


Cube3 expects to be spending around 80 person-hours per week on the node establishment, reducing this to around 60 person-hours in the refinement period and around 40 person hours in the steady state period, fitting this around team member’s existing work and personal commitments.

At the present value of FCT, the remaining income is not enough to pay us a fair salary for the work we are committing to do, even when we get to the “steady-state” period, but we are choosing to operate this way in the short-medium term as we feel it gives the network the best opportunity to grow sustainably over the long-term.

As the Factoid price increases over time, our team members will hopefully be able to use the ANO payments as a sufficient source of income. This will allow us to dedicate more of our time (beyond the 40 person-hours per week) in the extended steady-state period. It is at this point we would be best positioned to capitalise on the team’s other strengths, using our research backgrounds to explore the use of Factom in novel applications. We hope this would culminate with a Factom-based research proposal with clear deliverables, ideally funded with additional developers and resources via the grant pool.

Regardless of changes to the value of FCT, we remain committed to providing full 24/7 on-call support for our servers and maintaining two robust, reliable and secure authority nodes to the network with the appropriate backup provision. This level of commitment relates to our proposed efficiency at which 70% of the standard ANO payment is diverted to the grant pool.

2) How will these hours be distributed among your members?

The hours will be evenly split between the three active members of our company with ad-hoc support from our advisor.

3) How will this be distributed among your ANO activities?

At the start of this project, we expect that the bulk of our effort will be spent on activities directly linked with ANO operations. Over time, as the network matures and the nodes operate reliably, we expect to diversify our activities. The following list outlines the major areas we expect to focus on, with those further down the list becoming more relevant later in time:

  • Administration activities covering banking, accounting, legal
  • Engaging with our suppliers of hosting and hardware
  • Configuring and maintaining our mainnet and testnet servers
  • Implementing and testing software upgrades when necessary
  • Carrying out our planned research activities to optimally harden our servers
  • Providing 24/7 on-call support for all our servers
  • Engaging with the community on Discord
  • Contributing to Factom’s governance.
  • Drawing up plans for distinct development projects to be resourced and staffed via funding sought from the grant pool.
The final point on this list represents one of our longer-term goals of developing applications that enable people to use the Factom network to produce meaningful research with data that can be proven to be unmodified since its collection. However, for applications like this to be successful, the network needs to be suitably robust. This may take some time to achieve. For this reason, we intend to initially operate as a pure infrastructure ANO, in order to get the foundations of this network 100% right.

Rather than choosing to fund some of our development ideas from the ANO earnings, we feel development activities that grow the ecosystem are best commissioned via the grant pool with a clear set of deliverables that can be measured and applicants held to account for. This is because the grant pool is well placed to critically assess the viability of individual projects, and ensure appropriate effort is spent on specific activities, without losing resources due to the demands of node maintenance.


4) Can you give a list of demonstrable metrics that the community could use say 6 months or a year from now if you are selected in this application to evaluate your ANO?

There are primarily two metrics for evaluating our performance as a pure infrastructure ANO:

  • The measured uptime of our provision of two authority nodes to the network, compared to our peers.
  • Our responsiveness whenever there is an issue – specifically the mean and standard deviation of response time for acknowledgement, confirmation of cause and return to normal operation.

If you have any further questions on this or any other aspect of our proposal please don’t hesitate to reply.


Kind regards

Mike
 
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Guys I need to compliment you on the extensive and well catered supporting documents. It shows you guys put a lot of blood, sweat (and hopefully not tears) in it. I am surprised to say it, but given the above questions/answers there are no more obvious questions for me to ask. :)
 
Guys I need to compliment you on the extensive and well catered supporting documents. It shows you guys put a lot of blood, sweat (and hopefully not tears) in it. I am surprised to say it, but given the above questions/answers there are no more obvious questions for me to ask. :)
Hi Niels,

Thank you for your kind words. We were wondering when you may be about to ask your usually searching questions.

Our submission did indeed take a lot of blood and sweat. It encouraged us to think deeply about how best to support the Factom protocol and we are pleased that our submission seemed to reflect that.

As a headline update, three team members have been visiting UK datacentres and I am pleased to say that we have identified a preferred data centre. It is Tier 4 and even has a submerged server hall to minimise the effect of a bomb blast!

We will be continuing our preparations in readiness, should we be fortunate enough to be appointed an Authority Node Operator.

Kind regards

Mike
 
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