ICO Analysis: Dusk Network

For a long time, cryptocurrencies held a bad reputation for being used for illegal activities such as buying drugs on the famous Silk Road. Although this is not completely false, it is the user who is at fault, not the payment method.

Yet as people have reason to hide their non-illegal activities for several reasons, there always will be demand for confidentiality and privacy. There are many cryptocurrencies focusing on these aspects of transactions – Monero being perhaps the most popular one – and the Dusk Network is ready to throw down the gauntlet.

Aiming to create a decentralized infrastructure with an optimal balance between privacy and legal compliance, Dusk is more than a mere payment channel. Thanks to its fast communication channels for data transmission with a pay-as-you-go model, it is possible to exchange data between two parties secretly, whether it is in video or text format. This enables anonymous storage and asset ownership transfers as well. But this is not to say that such actions are not legally compliant as one of DUSK’s main objectives is to keep user anonymity in a legally compliant way.

All these are possible, because of the Dusk Network’s three-layer structure consisting of DUSK Anonymous Network Layer, Segregated Byzantine Agreement and Secure Tunnel Switching. Segregated Byzantine Agreement is a new consensus algorithm more efficient than proof of work and proof of stake and aims to find the optimal tradeoff between security, efficiency, and flexibility. The mechanism behind the Segregated Byzantine Agreement is as follows.

  • In the block generation sortition phase, a sortition, or a lottery if you will, takes place to determine who broadcast the block proposer is going to be.
  • In the default block generation sortition phase, which is run by Provisioners, people staking DUSK tokens and taking care of intensive tasks, empty blocks are proposed.
  • In the validation phase which is run by Verifiers, a subset of Provisioners, the legitimacy of the block proposal and its proposer is confirmed.
  • In the voting phase which is run by Voters, a different subset of Provisioners, upon consensus, the block can be added to the chain.
  • In the notarization phase, the yet to be official block turns into an official one by Notaries, basically the Voters who reached consensus previously.

It should be noted that there are two different types of actors in the network:

  • Nodes – facilitate transactions, compete with each other to generate and propose blocks. These tasks do not use high computational powers.
  • Provisioners – stake DUSK tokens and execute more intensive tasks such as block verification, voting, and notarization, as just mentioned before. Provisioners can take different roles in block validation.

Thanks to all these technical features, the Dusk Network is…

  • Fungible: DUSK tokens are untraceable.
  • Fast: Transactions do not propagate the whole network.
  • Focused: Designed for applications which are in need of secure and anonymous transmissions.
  • Final: Thanks to Segregated Byzantine Agreement, blocks are not reversible.

The Dusk Network team is also working on a security token platform so that organizations can run STO’s (security token offerings) that also protect investor privacy without breaching regulatory frameworks. Thus, the Dusk Network is developing something similar to ICO’s for ERC-20 tokens run on the Ethereum network. The use case of ICOs for Ethereum drove much of the crypto craze during 2017. As institutional investors cannot announce their investments due to legal boundaries, the Dusk Network has a really good chance to become the home for STO’s.

The test-net is planned to be launched in the first quarter of 2019 and the main-net in the second quarter of 2019.

Token

DUSK tokens are used for data transmission between users and the network as a gas fee. Token owners are incentivized to hold their DUST as their staking enables them to join and win the block generation sortition lottery if they assume the role of network nodes. Any actor in the Dusk Network can act as a provisioner as well if he or she stakes enough tokens for a steady return on investment as well.

In the ongoing private sale, no bonuses are offered so terms of sale are the same for everyone. Unfortunately, as of the time of writing, the team is not planning to have a public sale, so investors planning to participate in the private sale should state their interest and contact the team directly.

The initial total supply of DUSK is unspecified but with the following token distribution:

  1. 50% token sale
  2. 6.4% team
  3. 6.4% advisors
  4. 18.1% development fund
  5. 11.8% exchange budget & partner ecosystem development
  6. 7.3% marketing, PR, conferences, ambassador program, airdrop

The team is planning to use the token sale proceeds as follows.

  1. 49% blockchain development
  2. 10% legal and regulatory
  3. 25% exchange budget & partner ecosystem development
  4. 13% marketing, PR, events
  5. 3% banking and contingency

Team

Emanuele Francioni: Francioni has worked for TomTom, a navigation devices company based in Amsterdam.

Fulvio Venturelli: Venturelli is a former employee of TomTom and Amazon.com.

Kieren Hall: Hall was a developer at Shop Direct Group, a retailer company.

Jelle Pol: Pol led Shell’s first three Blockchain projects as the project manager over 3 years.

Tobias Disse: Disse was a blockchain product analyst at KLM Royal Dutch Airlines.

Pascal Putman: Putman has worked as a financial analyst at TomTom and as a project manager at PostNL.

Advisors

James Roy Poulter: Poulter has worked as an international tax advisor at Ernst & Young.

Aylon Morley: A mentor at TechStars, Morley was a senior analyst at Thomson Reuters.

Gary Quin: Quin is a senior analyst at Credit Suisse, working since 2010.

Marcel Roelants: Roelants is an advisor and the former general manager of BitPay, a Bitcoin payments company. He also has acted as a general manager at MasterCard and GE Capital.

Verdict

Below is a breakdown of the risks and growth potential of Dusk Network.

Risks

  • No working product. (-1.5)
  • No public GitHub. (-1)

Growth Potential

  • Team members are highly experienced in blockchain development. (+3.5)
  • If the transition from ICOs to STOs actually occurs, the Dusk Network will be one of the first projects to lead the charge. (+2)
  • Advanced technical features. (+3)

Disposition

Dusk Network is a decentralized infrastructure aiming to provide privacy while staying legally complaint. Thanks to its highly advanced technical features, the infrastructure will have low-latency services, enabling its users to have almost real-time operations. The sky is the limit for possibilities, whether it is anonymous storage or security token offerings. If a transition from the classic model of fundraising for blockchain projects, namely initial coin offerings or ICOs, to STOs, actually happens, the Dusk Network would be one of the first platforms for such a use case. The team is highly experienced in blockchain development as they have served Fortune 500 companies in their own blockchain development projects. However, as their GitHub is not public, it is hard to validate the actual progress of the project for now. Dusk Network receives a 7/10.

Investment Details

  • Type: ERC20 – Utility
  • Symbol: DUSK
  • Platform: Ethereum
  • Crowdsale: Unspecified
  • Minimum Investment: Unspecified
  • Price: Unspecified
  • Hard Cap: $14,400,000
  • Payments Accepted: Unspecified
  • Restricted from Participating: Unspecified

For More Information

Featured image courtesy of Shutterstock.