Multicoin Capital Management, LLC

Hello Factom Community. Multicoin Capital is proud to be campaigning for the second round of Factom's Authority Node selection process. We look forward to serving the Factom community, and we are happy to answer any questions in the meantime!
 
Hi Myles,

It is great to see Multicoin applying again.

In response to the question "How are you going to make sure your nodes operate securely?", you note that you will be operating guard nodes in order to shield your authority nodes from the internet. Specifically, you say:

Guard nodes are in a VPC and go through a NAT gateway to access the internet. Authority nodes have no access to the internet. They use a VPN to connect through the VPC gateway and sync with the external nodes.
I have a few questions about this:

1. No ANO currently uses any guards. The idea has been suspended due to the additional complexity it would add to the network during this early stage of decentralisation. Do you plan to use guards immediately, or will you be transitioning to guards at a later date?

2. Depending on the answer to 1, please answer accordingly below.

a) If you plan to use guards immediately, how will you connect your authority nodes to the Portainer system that we are using to restart in unison after network-wide faults?

or

b) If you plan to transition to guards later, please would you give a brief outline of the node structure you plan to use from the outset?

Thanks,
Alex
 
  1. Why should you be chosen as an ANO? Other than running a Node, how will you deliver value to the Protocol? I see words and promises in the application but concretely, what would it be?
  2. Are you running nodes of other cryptocurrencies? If yes, which?
 
I’ve appreciated your past two articles on/mentioning Factom, and understand you would be in a position to increase liquidity for FCT. My question regards your commitment to “bring awareness and exposure to the Factom protocol.”

Can you say in more depth what this would entail? I realize you might not be able to disclose some details, but can you give us a slightly more focused sense of how you might be able to increase awareness of, and exposure to, Factom?

On a related note, you mention that you also run validation nodes for Tezos, EOS, and Ethereum. In what ways have you promoted awareness of / exposure to these platforms? Is there anything you can point to as a precedent for the work you plan to do on behalf of Factom?
 
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Hi Myles,

It is great to see Multicoin applying again.

In response to the question "How are you going to make sure your nodes operate securely?", you note that you will be operating guard nodes in order to shield your authority nodes from the internet. Specifically, you say:



I have a few questions about this:

1. No ANO currently uses any guards. The idea has been suspended due to the additional complexity it would add to the network during this early stage of decentralisation. Do you plan to use guards immediately, or will you be transitioning to guards at a later date?

2. Depending on the answer to 1, please answer accordingly below.

a) If you plan to use guards immediately, how will you connect your authority nodes to the Portainer system that we are using to restart in unison after network-wide faults?

or

b) If you plan to transition to guards later, please would you give a brief outline of the node structure you plan to use from the outset?

Thanks,
Alex
Alex, thanks for the reply, and for pointing this out. We have an implementation that we think will solve this issue-- we are testing internally and should have a more concrete response for you by Friday!
 
If not selected this round, does Multicoin expect to remain a participating/contributing member of the Factom community?
Of course. Multicoin believes that the Factom protocol is the future of transparent and immutable record-keeping on the blockchain. That's something we're excited about regardless of whether or not we are selected this round. However, given the additional incentives involved with being an Authority Node, we believe that is the best route for us to take to continue to contribute meaningfully and productively. We hope that the Factom community believes the same!
 
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?
 
  1. Why should you be chosen as an ANO? Other than running a Node, how will you deliver value to the Protocol? I see words and promises in the application but concretely, what would it be?
  2. Are you running nodes of other cryptocurrencies? If yes, which?
Thanks for the questions.

1. We will help Factom Inc. with introductions to institutional investors (already doing this), and help educate an entire wave of institutional investors about Factom. As we go into due diligence with institutional allocators, they tend to read our research papers, and inevitably ask about Factom. As Factom Inc. publicizes more customer case studies and 3rd parties begin building apps on the Factom blockchain, we expect that institutional allocators will follow our investments in FCT.

For example, we’re currently in late stage diligence with an outsourced CIO firm that manages and advises over $100B of institutional capital. They are performing a site visit soon. From their last email: “Hey guys I jotted down some questions to discuss when we meet [at your offices]. If I think of anything else I will pass along but just wanted to share so you see what types of questions are in our minds. Re discussing 3 examples of investments I have read the EOS and Augur detailed analyses you wrote and now printed Factom too. Should we discuss these three? Many thanks!”

2. Yes, our team is currently running nodes for EOS, Ethereum, and Tezos, with plans for other integrations (Cosmos, Livepeer, Keep, Dfinity, Algorand, and others) in the near future.
 
I’ve appreciated your past two articles on/mentioning Factom, and understand you would be in a position to increase liquidity for FCT. My question regards your commitment to “bring awareness and exposure to the Factom protocol.”

Can you say in more depth what this would entail? I realize you might not be able to disclose some details, but can you give us a slightly more focused sense of how you might be able to increase awareness of, and exposure to, Factom?

On a related note, you mention that you also run validation nodes for Tezos, EOS, and Ethereum. In what ways have you promoted awareness of / exposure to these platforms? Is there anything you can point to as a precedent for the work you plan to do on behalf of Factom?
Thanks for the questions. See the above answer for more details regarding institutional awareness. Also, although we are not currently market making today, we expect to start making markets in the next 12-18 months, and would like to do so for FCT.

Additionally, after 6-12 months of being involved in the governance process, we intend to write about our experiences publicly on the Multicoin blog. We expect to do this on a regular cadence indefinitely. The Multicoin bog currently has about 12,000 subscribers, including almost all major crypto press, developers and entrepreneurs across the crypto ecosystem, and institutional investors around the world. Additionally, we extend our reach substantially through promotion on social media. For example, Kyle has 30,000 Twitter followers. His tweet about his latest blog post, The Web3 Stack, has been retweeted almost 100 times. This tweet has been viewed over 200,000 times.

As Coinfund, one of our competitors has noted, the best funds will be active ecosystem participants. We concur, and intend to participate in the crypto networks in which we’re invested.

Between our blog and the various Twitter accounts of our team members, we done a great deal of evangelizing for other networks we’ve invested in, including Ethereum and EOS. We frequently write about those networks, or issues related to those networks, and have done deep dives on both (as well as on Factom). All of our research is publicly available on our blog. One of the benefits of running multiple nodes is cross-pollination of great ideas that are working well in other chains. We use custom middleware from EOS that blocks malicious actors and have modified that software for Cosmos, sharing with other validators. We think we can bring similar benefits to Factom.
 
Do you have the concrete plans for:
1) Increasing liquidity of FCT token
2) Increasing price of FCT token
Thanks for the questions!

The beauty of the Factom “burn and mint” token model is that the price of FCT is directly correlated to usage of the protocol. So anything that increases real world usage will drive price increases. For Factom, real world usage requires getting large-scale enterprise clients on board. There’s a lot of ways to do that, and Factom, Inc. is making a lot of progress on that front. We think that our platform and reach can help with this by educating people about the benefits of Factom.

We think that increasing liquidity will help solve the chicken and egg problem of getting large players on board, by making it easier for them to get into the ecosystem. This will ultimately help drive price, should they actually start using the protocol consistently. We have very close relationships with every major OTC desks and most major US-based exchanges. Those service providers have been willing to expand their offerings to include new products, based on the needs of clients like ourselves. We’ll work directly with them to advocate for Factom’s inclusion in their offerings so that funds and enterprises can move into and out of Factom positions with ease.
 
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?
Thank you for the questions!

1. We will have 120 person-hours per week of technical staff dedicated to authority node operation (across Factom and other chains). It’s hard to know exactly how much of this will be dedicated to Factom, but almost all of our tools are developed for cross-chain usage. As we grow our market making function, we will dedicate investment team time to the Factom ecosystem In the interim, and we will continue to promote awareness with institutional investors as noted above.

2. The distribution is likely to change over time based on market needs. Maybe you can clarify this question so that we can offer a more specific answer.

3. We do not intend to actively contribute to protocol level development. Given that we run a hedge fund, we feel this is out of our purview. Moreover, it appears many of the other ANOs can be value accretive on this front, so it makes sense for us to focus where we can deliver unique value. We will however be active members in the governance of the Factom protocol overall. We believe this will ultimately help us better manage capital, so we’re incentivized to do so. Governance is clearly a major challenge that most chains face. We intend to be active participants in other chains as well, and therefore we want to learn from our experiences in the Factom ecosystem, and recycle those learnings to our involvement with the governance of other chains. Of course, the learnings from other chains will be recycled to Factom as well. We plan to post publicly about our experience with the Factom governance process, which will help drive awareness.

4. Great question. We have a few thoughts below, but would be open to community feedback about which metrics they are most interested in tracking, so that we could work to offer regular updates to the community regarding those specific metrics.
--uptime/consistent block production
--Referral traffic from Multicoin (website, Twitter accounts, etc) to Factom.com
--Number of Multicoin blog posts covering, specifically, Factom governance
--Number of Multicoin blog posts covering other issues related to Factom
--Number of directly attributable exchange or OTC desk integrations
 
Hi MCM,
Thanks for applying! Could you break out:
1. What pledges you are making to grow the protocol via grants (if any)?
2. What pledges you are making to grow the protocol in general (via ANO payouts or simply by time/resource dedication)?

Thanks,
Matt
Thanks for the questions, Matt.

1. We are pledging to operate at 40% efficiency in order to help the growth of the protocol via contributions to the community grant pool.
2. Please see the above answers for more detailed explanations of our efforts (including market making, promotion/evangelism, institutional awareness, and more). One other thing we are exploring (this is not yet confirmed) is whether proceeds from the grant pool or our own payouts could be used to lend FCT to OTC desks so that they could offer FCT without having to take on market risk. This is something we plan to have a more in-depth discussion about with the community soon.
 
1. No ANO currently uses any guards. The idea has been suspended due to the additional complexity it would add to the network during this early stage of decentralisation. Do you plan to use guards immediately, or will you be transitioning to guards at a later date?

2. Depending on the answer to 1, please answer accordingly below.

a) If you plan to use guards immediately, how will you connect your authority nodes to the Portainer system that we are using to restart in unison after network-wide faults?

or

b) If you plan to transition to guards later, please would you give a brief outline of the node structure you plan to use from the outset?

Thanks,
Alex
Hi Alex -
We're still testing, but wanted to provide an update.

We are exploring a solution where we would run guard nodes. In this scenario, our guard nodes will join the Portainer system and relay any signals sent by Docker Swarm to our Kubernetes orchestration, which would then perform the same actions on the authority nodes. This would be our preference from a security standpoint. We intend to run some tests next week against the testnet to make sure this would work.

If this isn't viable at the outset, we have confirmed that we can run a Docker container that will join the Portainer system. So we would run nodes in the Portainer system as other authority nodes are doing. We would run two instances, one acting as the authority node and the other on standby as a backup.

We will provide an update next week with details.
Thanks!
Tim
 
Yes, we do plan to participate in governance and community. We also plan to publish content about the governance process and leverage our learnings from participating in governance of other networks.
Will you also have a Discord-presence? I did a quick search, and could not find any comments from any of your team member there.

Our system of governance, our technical debugging and coordination of restarts etc. are today heavily based on Discord-communication. What is your thoughts in this regard?
 
Will you also have a Discord-presence? I did a quick search, and could not find any comments from any of your team member there.

Our system of governance, our technical debugging and coordination of restarts etc. are today heavily based on Discord-communication. What is your thoughts in this regard?
We're happy to use Discord. We're familiar with it from involvement in other projects. I just joined and will make sure the rest of the team sets up a presence there too.
 
Hi Alex -
We're still testing, but wanted to provide an update.

We are exploring a solution where we would run guard nodes. In this scenario, our guard nodes will join the Portainer system and relay any signals sent by Docker Swarm to our Kubernetes orchestration, which would then perform the same actions on the authority nodes. This would be our preference from a security standpoint. We intend to run some tests next week against the testnet to make sure this would work.

If this isn't viable at the outset, we have confirmed that we can run a Docker container that will join the Portainer system. So we would run nodes in the Portainer system as other authority nodes are doing. We would run two instances, one acting as the authority node and the other on standby as a backup.

We will provide an update next week with details.
Thanks!
Tim
Hi, Tim. Do you have another update? You mentioned 12 days ago that you would have an update within a week.
 
Hi Alex-
We have a node synced with the testnet and running in our Kubernetes environment. We are also running a backup node, have configured alerting and are doing automated backups. So we've confirmed that we can join the Portainer system as outlined in our "backup plan", where we would join the Portainer system as the other Authority nodes are doing.

We haven't yet determined whether we can successfully run guard nodes and mimic the desired coordination on our Authority nodes. This took longer than anticipated, but we're actively digging into it. Will continue to update as we progress.
Tim
 
Congratulations on your swanky new offices. It seems like you guys are getting ready to grow into the big new space.

Factom is a heavily community oriented project. In most aspects of the protocol (certainly at this point of development) the community aspect is far more important than the technical aspect. You are diving deep into the technical aspects which I appreciate, even though the novelty of it makes me anxious, due to the system being fragile enough as it stands.

What really concerns me though is that you are just now joining discord. This indicates that your team has not yet made the realization how very much more heavily the social aspect of Factom is. This does tie into the tech too. For example, critical alerts for responding to network issues are handled through discord.

With your potential growth upcoming, how much manpower do you plan on dedicating to community engagement (or more likely just monitoring)?
 
NK01)
Open question, since I really don't know the answer myself and being totaly open here with you guys, since I have been wondering this. I think you can do wonders for this project, given your standing in the crypto world. On the other hand some things make me hesitate a little. The post of Brian above mine sums one of the major ones quite nicely.

The wondering part is this: With your day to day operations and the fact that you position yourself rightly so as bringing insights and research to the crypto world. Why would you need to be an ANO and what is in it for you?
 
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