ICODrops: xx network

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xx network is a blockchain platform featuring digital payments, messaging and information exchange. The xx network combines Elixxir privacy-protecting software and the Praxxis consensus protocol.

Metrics

Private fundraising:
The project conducted 2 private raises.

SAFE Round of agreements for equity (no tokens were sold) was conducted from August 1, 2017, to March 1, 2019. Raised money was converted/replaced by Token ownership on the Early Private Sale, but one early backer left equities for $1.975M.

Early Private Sale for the original, early backers was conducted from November 1, 2019, to January 23, 2020. 25,185,709 (around 2,5% of the Total Supply) were sold  or converted from the SAFE Round for $7,051,999 at the price of $0.28 (discount of 20% off the $0.35 Initial Public Sale price). Among this round's participants was Ripple's Co-Founder and ex-CEO Chris Larsen.

Initial Public Sale:

The Initial Public Sale went from January 23, 2020, to February 21, 2020. There were roughly 43,000,000 (4,3% of Total Supply) of tokens offered at a price of $0,35 for a total of $15,000,000. All fundraising efforts in this Sale were for non-US persons. The final information about the round's results has not been officially disclosed. But according to the Telegram's group admin, 1/3 of the hard cap was raised after the first week of the sale.

Public Referral Sale - currently ongoing:

This public sale round started on February 22, 2020, and will last until March 20, 2020. The information about the round's hard cap, amount currently raised, and the number of tokens offered is not publicly disclosed. The project’s CFO reported that the goal was to bring additional coin holders into the project. All fundraising efforts are for non-US persons.

The tokens are offered at $0.36. According to the project's website, the minimum personal cap is $100.

The funds are accepted in BTC, ETH, USDC, GUSD, or USD via a wire transfer (for an amount starting from $20,000).

Token distribution for the Referral Sale will occur in batches on 2nd, 9th, 16th, and 23rd of March, 2020. These tokens will be locked.

Types of referrers and their bonuses:

1) Supporters - users that purchase tokens during the Referral Sale for $100 or more.

2) Early Supporters - users that had completed KYC/AML during the Initial Public Sale -, prior to February 20, 2020, at 23:00 GMT.

Each Early Supporter and Supporter receive an email with a referral code, which they then can provide to referral candidates. The number of referrals that Supporters can make is unlimited.

Bonuses:

- for Supporters - 15 tokens for each referral plus 1% equivalent of tokens purchased by referrals.

- for Early Supporters - 20 tokens for each referral plus 2% equivalent of tokens purchased by referrals.

- for referral buyers themselves - 8 tokens for each referral code that is used.

Tokenomics and Lockups

Undistributed tokens will not be burned. Instead, they will be returned to the pool of Tokens/Coins for Coin Purchasers (which initial size is 70%).

All tokens, including those sold during the Private Sale, are locked for at least a year. Moreover, there are additional months added randomly to the lockup period assigned in accordance with purchase dates. This will allow a gradual increase in the circulating supply that will be available for trading on exchanges. Such a measure is done to protect the price from the pressure of the excessive initial supply.

Total Supply:
1 000,000,000 xx.
Valuation: $350,000,000.

Initial circulating supply:
All tokens sold during Initial Public Sale and the Referral Sale have been and will be distributed weekly according to the schedule above. The exact number of tokens sold during these rounds will be announced after the end of the Referral program.

Airdrop and Bounty:

The ongoing Public Referral Sale is the equivalent of a bounty campaign. The team stated that an airdrop will be conducted later on.

Social Metrics

The project has 4 websites: https://xx-coin.io/, https://elixxir.io/, https://praxxis.io/, and https://xx.network/.

Daily visiting rate: 500, 280, 240 and 80 respectively. Viewing rate: 1900, 1100, 950 and 290 respectively.

The official Elixxir twitter was initiated on September 3, 2018. So far, it has reached roughly 5600 followers. The team is actively posting. The official xx network twitter was created in August 2019 and now has 1660 followers. The activity there is high as well.

The official group in Telegram was launched on August 28, 2018. There are around 4800 users, the activity is average both on the community members' and admins' sides.

Additional information

The official Facebook group was created on September 19, 2018. Currently, it has 101 'Likes', 506 followers. The activity comes only from admins.

The official Subreddit was created on September 19, 2018. There are 122 followers and the activity level is low.

The official Medium blog was started on September 19, 2008. So far, it has 7 publications, posted from February to March 2019.

The official Discord channel was initiated on September 18, 2018. It has around 1480 users, whose activity is moderate.

Key Players

The project has two software development teams managed by one team of executives. Some team members mention both Elixxir and Praxxis as their occupation. In this report, they are divided according to the projects' websites.

Executives:

David Chaum (CEO and Founder) - David is the "online privacy pioneer" and the creator of digital money. He has a personal Wikipedia page. He gained a doctorate in computer science from the University of California, Berkeley and taught in top-level institutions, such as the New York University Graduate School of Business Administration and the University of California, Santa Barbara.

David started his career in computer science and cryptography in 1981 by writing a paper "Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms".

He founded  International Association for Cryptologic Research (IACR), formed a cryptography research group at CWI, the Dutch National Research Institute for Mathematics and Computer Science in Amsterdam. Later, he founded DigiCash, Voting Systems Institute, and Perspectiva Fund (self-proclaimed 'optical technology fund' focused on venture investments).

David is also famous for being a pioneer in creating private digital money called 'ecash' that introduced the cryptographic primitive of a blind signature.

His name is often associated with research about digital signatures, keys, digital voting systems, zero-knowledge proofs and other works in online privacy.

Jim Dolbear (President) - Along with David, Jim has been Co-Founder and Partner at Perspectiva Fund for almost 13 years. He studied at Harvard University and Yale School of Management.

Jim worked in Project Financing and Mergers & Acquisitions at Lehman Brothers and Morgan Stanley. Following that experience, he joined Avery Dennison's Finance and Cost Accounting before he became in charge of world-class production.

He founded Digital Coasta, managed LAWNMOWER, a tradeshow and publishing company. Among his clients were Sun Microsystems, IAC, Microsoft, Activision, Harcourt Brace, Cisco, Exodus, Warner Brothers, and Fox Internet Group.

Jim met David Chaum in 2000. They joined forces to create the Voting Systems Institute. In addition, he was a technology advisor to the State of California and sat on the Advisory Board of USC’s Integrated Media Systems Center, an NSF research center.

Stephanie Vaughan (Chief Financial Officer) - Stephanie works at Elixxir from 2018. She has an MBA in Finance and Economics from Columbia Business School and a bachelor's degree in Quantitative Economics from the United States Naval Academy.

From October 2017 to May 2018 she acted as a Founder and Director at Block Next Ventures (a company focused on helping to launch crypto startups). During the same period, Stephanie was Head of Capital Markets and Development at StreetShares (fintech solutions for banks and credit organizations). From 2016 to 2017 she acted as a Senior Lawyer at LunaCap Ventures, focused on venture debt. Prior to that, from 2014 to 2017 she was Associate Partner at Houlihan Lokey.

Elixxir team:

Benjamin Wenger - VP of Architecture, works at Elixxir from August 2017. Benjamin has not mentioned any information about his experience besides working as a Technical Advisor in a family business in his LinkedIn.

Kate Victoria - Director of Development, works at Elixxir from December 2018. In her LinkedIn Elixxir is the only workplace mentioned.

Mathieu Bertin - Full Stack Web Developer, works at Elixxir from April 2019. Mathieu has been working roughly 5 years as a developer at various companies.

Bruno Muniz - iOS Developer, works at Elixxir from January 2019. He worked on similar positions at several IT-companies in Brazil.

Konstantino Sparakis - Software Engineer and UI/UX designer, works at Elixxir from February 2019. He has been acting as a President of IT company Cipher Zero (according to the website, it is focused on Software, Cryptography and Blockchain Consulting) from 2016.

The remaining team members: a Software Engineer without a LinkedIn profile and a Software Engineer Intern.

Praxxis team:

Richard T. Cardback III - Key Technical Contributor, works at Praxxis from September 2017. At the same time, he has been acting as a Technical Consultant at FlowPharma (Artificial Intelligence for pharmaceutics). His prior experience includes leading a technical staff group focused on integrated systems' security at Charles Stark Draper Laboratories from 2012 to 2015. There Richard co-founded Lexumo (cloud service for open-source code audit) and worked on it as a Chief Architect from 2015 to 2017. He also devoted significant time to research of AI and cryptographic systems.

William Carter - COO and Software Engineer. After completing his Bachelor’s in Computer Science from Cal Poly, Will performed research in Machine Learning at NASA’s Jet Propulsion Laboratory. He then joined forces with David Chaum and became one of the founding members of the WBM Corp where he has contributed to protocol design, high-level strategy, backend software, prototyping, fundraising, and research. 

Mario Yaksetig - Cryptographer. Mario is a cryptographer. He started his career working alongside David Chaum. Mario is currently involved in NSA funded research and has conducted his Master thesis research under Professor Alan T. Sherman, a notable student of cryptography icon Ron Rivest. He currently ensures that communications over the xx network remain private and secure against quantum computers.

Peter Somerville - Head of Node and Developer Relations. From 2018 to 2019 Peter acted as an Associate at Gopher Angels venture fund. From 2014 to 2018 he was Director of Investor Relations at StreetShares, where he increased the number of investors from 40 to 10,000 according to his LinkedIn. From 2013 to 2014 he acted as a Campaign Manager for Tommy Moll.

Bernardo Cardoso - Senior Software Engineer. Bernardo started his career at Imagination Technologies, developing the company’s first Neural Network hardware accelerator. Bernardo has a Masters in Electrical & Computer Engineering from the University of Porto, including a research semester at Carnegie Mellon University. He now produces cutting edge software and researches novel decentralized architectures for WBM Corp.

Baltasar Aroso - Software Engineer. Baltasar has worked as a researcher at the Networked Intelligent System cluster of INESC TEC, working on Machine Learning and AI for flying networks. He has a Masters in Electrical & Computer Engineering from the University of Porto. He is currently a fundamental piece of the WBM Corp team working on distributed systems design and software development.

Technology and Concept

Here we provide an answer to the initial question that is likely to appear when looking at the project: 'What are Elixxir, Praxxis, xx network, and xx coin'?

The last in the list, xx network, is the integrated blockchain platform that combines Elixxir and Praxxis software featuring digital payments, messaging and dApps. It is focused on fostering the adoption of blockchain technology and digital currencies by providing 3 key advantages:

• Speed (latency for payments and messages should be seconds, the team claims 500,000 TPS on the mainnet and 5-10 second finality).
• Transaction Security (only sender and receiver of a transaction can access its details and verify its validity).
• Communication Privacy (users and their devices are protected from being identified by others).

Elixxir is the mix network that shreds metadata for messages and transactions, it provides private communication layer of the xx network. The communication process consists of messages and transactions. The team claims 10-second latency, strong privacy, metadata masking, security, and scalability.

The team applied unique approaches to improved scalability: temporary node grouping in Teams and Precomputation. They can speed transaction processing by up to 80%.

In other words, Elixxir is a technological part of the network.

Praxxis is the xx network’s consensus protocol. The team highlights quantum resistance and high performance, which should allow xx network to provide a solution for all central networks' requirements. Along with Elixxir, it is a technological part of the network. The xx network blockchain will be using xxBFT consensus algorithm (also known as xx consensus). The consensus enables reaching an agreement in two potential paths: optimistic, applied when there are no issues and the network is well synchronized and fallback, applied when the network experiences problems or undergoes an attack.

xx coin is the network's currency, it has a ticker 'xx'. Initially, the token will be the ERC-1404 standard. The xx network smart-contract is available on Github. One month prior to the mainnet launch, tokens will be moved to xx network. The MainNet launch is scheduled for the end of 2020. The token will be used for governance, incentives, payments for large batches messages, and dApps. The expected annual inflation is 0.5-0.8%.

More information about the xx network and its components is available in the technical documents: Praxxis Technical Paper, Elixxir Architecture Brief, and xx network whitepaper. These papers reference a number of scientific works in cryptography, including those published in 70's and 90's. A significant number of them were written by David Chaum.

xx network has a working public alpha, which has 3 repo groups:

1) xx core:

• primitives - base data structure, tools for other repositories, IDs for nodes, clients and users.
• crypto - base crypto functionality: randomness generator, encryption/decryption, libraries.
• comms - communication component.

2) xx services:

• server - precomputations and real-time computations, receives messages.
• gateway server - API for clients that enables interactions with the network. It is present on every server and represents a frontend for interactions.
• permissioning - node management and verification.

3) xx clients:

• client API (arrow SDK) - used by clients for interactions and messaging. It contains libraries for iOS and Android.
• mobile clients - mobile clients for iOS and Android.
• other clients - desktop clients and bots for interactions with the network.

The project has 2 mobile applications available in App Store and Google Play:

• xx collective - community-focused app featuring news, events, and technical information. The app has over 5000 downloads in Google Play.
• xx messenger (early access) - private anonymous messenger that establishes a connection after a handshake. Works with the alpha version of the network. The team claims that all the users' data and metadata will be masked. The app has over 1000 downloads in Google Play.

App Store does not provide information about the number of apps' downloads.

Summary

Strengths:

+ xx network is a thoroughly constructed project with remarkable architecture. It is based on a substantial amount of papers in cryptography, many of which were written at the dawn of this field.

+ the project has lived through the bubble of 2017 and a consequent bear market.

+ xx network reportedly closed its recent sales round and raised around $5,000,000, while other projects fail to raise meaningful investments under the current market conditions.

+ all of the project's investors have lengthy lockup periods. Randomized unlock windows are an extra mechanism for investor protection. Given that the lockup period is greater than one year, we do not advise to treat investment in this project as short-term speculation. Instead, it would make sense to approach it like long-term allocation, like investing in projects like Polkadot.

+ David Chaum is the inventor of the world's first digital currency. He is one of the most well-known people in the history of cryptography. His executive-level colleagues are also strong players.

+ Ripple's Co-Founder and ex-CEO invested in the project

Weaknesses:

- delays: beta was expected to be launched in 2019, rescheduled to 2020.

- metrics for the most recent and current investment rounds are not disclosed. There is no information available about the total amount raised.

Risks:

- as unlock as a randomness element to it, some will get unlucky to be the last to get their tokens. Whether it is good or bad will depend on the behavior of investors who will get their tokens unlocked first.

- regular: it is difficult to predict how the industry will be functioning in a year.