August Update: Questions You Asked

Dear Tokenholders,

It has been two years since ICO, and it’s the right time to look back at what has been done so far. For a while, the monthly news was mainly focused on day-to-day achievements. We were reporting about our team evolution, product development, and licensing activities. This time, we have decided to take a macro view and explain the big picture. In this update, we’ll talk about our progress and what we resigned from along with what we decided to do differently.

We’re doing our best to address the issues as comprehensively as possible. However, some topics are sensitive from a competitive standpoint and maybe aren’t as thoroughly addressed as we would like.

Company structure, activities, business planning

In a nutshell, Polybius consists of two branches

Tokens were issued by Polybius Foundation, which is at the top of the group. That hasn’t changed since the ICO times. Polybius Foundation has two branches — Fintech and Ventures.

The Fintech branch focuses on developing the OSOM service. It consists of legal entities needed to operate and comply with the regulation: Polybius Tech OÜ, Digital Ledger OÜ (entity holding the crypto wallet and exchange licenses), and Polybius Fintech SPRL (entity in the licensing process with the National Bank of Belgium).

The Ventures branch was set up to make venture investments in line with the promises of the ICO. Although this is still the plan, the team is currently focusing 110% on the fintech part. Once fintech is off the ground, we will ramp up ventures. At that point, the branch will look to invest in direct equity of companies, ICOs, or any other way. Meanwhile, the venture branch is more passive.

How will the profit-sharing be calculated, and when will it happen?

Since Polybius Foundation issued the tokens, the profit-sharing part will be accumulated from the entire group. As for the time estimates, it can only be tied to the business generating profits. We are currently focusing on capturing the market/users. Once we have a solid user base, we will turn to maximize profitability. In any event, we expect that successful OSOM product evolution should increase the token value even before the company becomes profitable.

Why isn’t Polybius pursuing the banking dream?

Our current product plan, which in essence is the personal finance manager, will take us to market faster. The beauty is that we will be offering banking products, just using others’ platforms. Once live, we may still follow through with the banking license plan. This would make sense if (a) we see certain products being very successful, (b) we can maximize profit by building them in-house and (c) we would need a banking license to achieve (a) and (b).

Starting with the bank is a very time and resource-consuming process. Therefore, we’d like to test and prove the value proposition using a “lighter” setup, allowing us to improve banking while not competing in this sector. This would allow us to maximize the impact of our funds and avoid wasting them.

What are OSOM competitors, and what are our strengths?

We are up against numerous fintechs in Europe, both in crypto and fiat space. To be more precise – fintechs with licenses. However, we are about the only ones offering both crypto and fiat services in one app. These services will integrate all the virtual asset wallets, exchanges, and traditional bank accounts, and make money management easy by eliminating all the pain points our customers experience with their current setup.

We seek to build a user-centric platform, which offers a fully automated and digitized financial management experience. Open banking platforms like OSOM are becoming more and more appealing to the Belgian and neighboring markets. Therefore, it’s a perfect time to launch our service.

Additionally, we are ensuring that our services are strictly compliant with all relevant regulations, that make the app reliable. We are building the strongest team in the market while keeping it relatively small to make it easier to react to the market changes.

What is OSOM’s go-to-market strategy?

Our strategy is to invest incrementally, learn the audience, adapt the language, maintain the lowest cost of conversion. Conversions, not brand awareness. Laser-sharp acquisition, not blanketing the market with costly activities. Growth hacking to optimize paid media use and max out organic expansion possibilities.

What is the company’s burn rate, how much money from the ICO is already spent?

The information will become public right after the audit, but we can tell even without it, that for now there is a sufficient runway. We haven’t spent any of the collected virtual assets, and are currently running on fiat funds. Needless to say, everyone can check our crypto wallet balances:

BTC: 3CbsvhcvGjqW4a1u5yLWanfXaT8Z9Jd7CC
EMC: EeLeckKqTRvbbyThGhvMYeVWhrCwYb6ev6
ETH: 0xf115De96F669f3df5287617D70c890085C1090e6
USDT: 34ZiYBEQxABhh5kDr5pqB7TiwNo4DcqbaC

Who and when will conduct the audit for 2018?

Same as last year, Baker Tilly Baltics is conducting the audit. It has been delayed on the contrary to the previous year because right now, Polybius Foundation has more active subsidiaries. Each subsidiary requires a deep dive. Nonetheless, our sincere hopes and expectations are to finalize the audit and publish the report during Autumn.

Why is nothing done to boost token value?

We deeply believe that the asset price can be either indicative (i.e., drawn from company financial analysis and profit expectations) or speculative (i.e., a result of pumping money into the market, buybacks). Following the best practices, we would very much prefer to have an organic growth of PLBT value accordingly to the success of our product. We think that blowing money on pump campaigns is a wasteful thing to do.

Development Pace

Why is it taking so long to develop and aren’t we losing momentum?

Software development takes time, as we need to be very pragmatic in what we create. Our goal is to create a robust piece of software, that would respect the redundancy and security standards of our users, our partners, and our regulators equally. Sometimes, we have to get creative and experiment, which can cause small delays of another ‘big deploy.’

Partnerships could take us to the market faster, but often at significant financial and quality costs. Therefore our approach is to build as much as possible in-house, rather than white-label someone else’s solution. This results in longer timelines but builds a more robust and valuable product, contributes to company valuation and tokenholder value.

We are at the right pace: PSD2 regulation is about to go live, and crypto is recovering. Besides robo-advisor and UI updates, throughout the last two months, we have been very active in developing the crypto-fiat exchange functionality and native apps. We focus on being the best, rather than the first ones to roll out. And it requires observing others’ mistakes and coming up with an improved solution.

We have seen startups develop similar functionality over a shorter time

Yes, we have observed people coming to the market faster by using a white-label solution. It gains speed, but it also creates dependencies — if a white-label partner experiences difficulties, we fail the end-users. A white-label partner can even start to extract excessive fees if they realize their own importance.

It has taken us longer than expected to deal with blockchain explorers, which caused a lot of problems for the users lately. Unplanned functionality, but code and time investment will give us a significant advantage in the long run.

Why not hiring more developer force to make things move on parallel streams?

We are eager to bring the app to the market asap. It’s not as simple as just getting people into the company in bulks – it is about justifying the efforts. We follow small steps in figuring out the market fit, then scaling up the product, having a better sense of what talents we need. An option of developing the full-scale product all at once and hiring upfront, based on assumptions, would likely result in extra costs in the long run.

Are you procrastinating on minimal spend till you can?

Looking from the inside, we would definitely not agree with that. We are moving fast forward and keep our spending in check. Taking the outside perspective – that wouldn’t make any sense for us to do. Our growing team consists of professionals with impressive careers in both banking and IT worlds. All of them have strong personal ambitions and have no time to procrastinate.

OSOM features

Will OSOM have own bank accounts

The answer might be tricky due to the definition of a ‘bank account,’ but from the user perspective, we will have similar functionality. Will OSOM users one day have OSOM IBANs? Totally possible!

Explain Robo-adviser

This is a proprietary algorithmic solution, which we are working on with InvestSuite. InvestSuite is a Belgian company founded by ex KBC bankers. Our goal is to develop a solution that would trade crypto markets and reduce the drops while keeping the ups. We will be testing the solution this autumn with our own funds, and once it’s workable, we’ll roll it out to the broader customer base. That decision should not take longer than the end of this year.

What about the DigiPass?

Currently, we have shelved the DigiPass idea, preferring to focus on fintech (i.e., OSOM) instead. It doesn’t mean that we have written it off for good. It means that it’s not a priority right now. To ensure sound development of the business, it’s essential to stay focused, and that’s what we intend to do by narrowing the scope of work.

When will USDT be supported?

We currently support BTC, ETH, and PLBT, with more virtual assets in the coming future. However, the selection of coins is demand-driven, and assets, supported in the future, are entirely dictated by you.

Will PLBT be included in Robo-adviser

It may be, but we do not disclose the tokens bought or sold by the robot at the moment. We may disclose the buy and sell decisions post-factum. Roboadvisor is being built in a way that it makes regular buy and sell recommendations. Therefore, coins can appear and disappear fast from its wallet. The investment universe is also being reviewed continuously. So to sum up, there is no human bias in selecting coins for trade, but PLBT is the part of the universe

Is Russia in plans?

Russian users can already use our Crypto functionality. However, we do not have plans for fiat as, unlike Europe, there is no favorable regulatory landscape.

When will Russian IDs (passport and driver’s license) be approved

We are working on it with Veriff. They are currently in the process of adding recognition of Cyrillic letters.

Will OSOM provide API for integration with other systems?

All functionalities that aren’t in the current pipeline can be added if based on requests. We are building OSOM the way that we can create APIs. If you have suggestions on the systems, which we should consider integrating, please send them our way.


What other licenses are in the pipeline

We would like to maximize the usage of existing licenses before applying for new ones. A financial license has a huge cost not only in terms of cash but also in terms of our man-hours and organizational complexity.

First, we will need to upgrade our crypto licenses in the near future, as the Estonian government is looking to bolster the requirements, including background checks on management and more robust processes. Additionally, we’ve been looking at, i.e., investment advisory firm licenses. In any event, if that happens, it’ll be later in the life of the company.

This will conclude our less ordinary monthly report. We would like to encourage you to follow the news. We have a lot of them cooking: new website, Closed Beta, exchange, App and Play Stores, licensing, and more. Stay tuned and invite your friends to join our waiting list!