Token Review: Modum Analysis

Modum Analysis: A comprehensive review and outlook of Modum, which is set to revolutionize and disrupt the supply-chain industry.

This represents the writer’s personal opinions and does not – in any way- constitute a recommendation of an investment or financial advice. Please assume caution when investing in cryptocurrencies and do so at your own risk, as it is extremely volatile and you can lose your money.

Overview

Modum is a supply-chain system that integrates Blockchain technology, smart contracts and sensory devices into a single, passive solution. This integrative solution aims to enhance data integrity across the entire supply chain. Modum’s ICO ended on the 22^nd of September, 2017. (Read also: Beginner’s Guide to ICO Investing: How to Participate in ICOs)

Applications

Modum’s initial focus will be towards the pharmaceutical industry, where recent regulatory changes in the European Union requires proof that shipped medicinal products have not been exposed to conditions (particularly temperature) that may have compromised their quality. This, therefore, necessitates expensive procedures to transport medicinal products. In more technical terms, pharmaceutical companies must employ expensive temperature-stabilized trucks and containers via 3^rd party logistics providers to transport medicine.

Modum offers the first solution to substantially reduce these costs, by integrating a temperature sensor into medicinal shipments to monitor its temperature. All data is recorded into the Ethereum blockchain, ensuring full transparency, accountability and data integrity. If there is a temperature deviation at any point during the entire process, the sender/receiver will get a notification to inform them of the anomaly. This represents a cost-effective way of monitoring temperature changes along the medicinal supply chain.

In the long-term, Modum’s long-term strategy is to provide a platform for data integrity using progressive IoT technology to monitor all of the conditions that affect physical products while in transit. They are interested in monitoring a wide range of environmental variables from moisture, light, acceleration, and sound to chemical exposure and specific levels or balances required.

Unique Differentiator

Their unique proposition includes:

1. First-Mover Advantage: Modum aims to be the first integrated solution in the pharmaceutical supply-chain space. There is a real need for a cost-effective solution that extracts valuable data pertaining to medicinal transportation which is tamper-free, transparent and passive. Modum’s potential target segment could be 60% of the estimated 200 million shipments recorded in 2016
2. Wide-Range of Applications: In the long-term, Modum aims to expand the applications of its technology by integrating additional sensors that track not only temperature but also humidity, moisture, light and other environmental variables. This allows Modum to venture into the supply-chains of other industries and markets easily
3. Utilization of Blockchains/Smart Contracts: The use of Blockchain within the pharma supply-chain is a great use-case, especially in an industry that is highly regulated. Modum’s solution records environmental conditions that a medicinal package has been exposed to from the start of its delivery to the end, ensuring data integrity and immutability. This passive strategy makes meeting regulatory requirements extremely easy and efficient.The use of smart contracts serves as an auditing and compliance function that ensures quality assurance aligned with regulations and also consumer satisfaction. Smart contracts also allow pre-programmed parameters to be conceived and executed on the blockchain, ensuring the discovery of any anomalies that could affect the quality of the medicine

Token System

The Modum token (MOD) is a profit share token with voting and profit participation rights. This means that the value of the MOD token is directly linked to the perceived value of the company as well as expected earnings per token. MOD tokens are ERC20-compliant tokens and are similar in characteristics to shares of a company. (See also: Guide to Cryptocurrency Wallets: Opening a MyEtherWallet (MEW))

1. Voting: Voting rights for holders of MODs pertains to the 30% of MOD supply (9 million MODs) that have been kept on escrow for the Modum team; the holders get to vote on whether the escrowed coins will be unlocked and given to the Modum team contingent on the achievement of specific goals and milestones
2. Dividend Distribution: MOD holders would be conferred dividends derived from the financial performance of Modum’s business, which would be strategically established by Modum’s Board of Directors (BODs). The dividends will be given in the for, of Ether (ETH)

It is important to note that locked (escrowed) tokens do not have voting or profit-sharing rights. (Read more Coins, Tokens & Altcoins: What’s the Difference?)

Team

Modum is spearheaded by their current CEO, Simon Dössegger, a mechanical engineer by trade and has held a senior product and technology management role at GoPro. Their development team is filled by individuals who specialize in sensory equipment, Internet-of-things (IOT) and blockchain technology.

Modum has an impressive list of strong advisors in the pharmaceutical, investment banking industry and computing industry. They include Michael Schaer (Founder of Schaer Pharma), Werner Sporri (Chairman of S&K Partners) and Pascal Degen (Director at Novartis).

(Read more: A Guide To Fundamental Analysis For Cryptocurrencies)

Traction

Modum already has a prior track record since 2016, with numerous pilot tests being completed on its technology. There is a total of 3 pilots (tests of their technology) that includes:

1. Pilot 1.0: Successfully tracked the temperature of most shipments, with 10,000 data points recorded by their device. The pilot highlighted key areas of improvement that included faster data speeds, better device connectivity with mobile applications and creating a dashboard for data analytics
2. Pilot 2.0: Successfully monitored shipments between a wholesaler and several clinics and pharmacies whereby shipment volumes were scaled up by one order of magnitude. All improvement areas from Pilot 1.0 were introduced and tested
3. Pilot 3.0: Two phases were conducted; in the first phase, Customer processes was implemented and stabilized. In the second phase, additional efforts and the duration of the temperature data read-out process was quantified. Modum easily surpassed the objectives in stellar fashion, achieving an average readout of only eight seconds for 100% of the shipments (the goal was 95% of all readouts within 30 seconds)

Strategic Partnerships

Modum has also forged key partnerships as follows:

• Together with Communication Systems Group at The University of Zurich, Modum has received funding to complete a research project under the Swiss Commission for Technology and Innovation (Link here)
• Modum is currently producing the first generation of their sensor hardware in partnership with Variosystems a Swiss hardware manufacturer (Link here)
• Modum will enter the market in winter 2017, with a number of partnerships still underway. The formal announcements will come later this year

Awards

Modum has participated in various start-up competitions since its inception in 2016, winning cash prizes and earning key guidance and mentorship from prominent entities. They took 1^st place in the “Future and Emerging Technologies vertical of the Kickstart Accelerator 2016”, beating 850 other projects from 40 countries and taking home a respectable CHF 25,000.

Roadmap Ahead

Here is the roadmap outline by Modum’s whitepaper:

1. Milestone 1 (22^nd October 2017): Management and finalization of the minting/token distribution process
2. Milestone 2 (1^st Quarter, 2018): Mass production of their sensory devices and the development of the product ecosystem, together with integration with Ethereum blockchain. They’re also looking to explore integration with other blockchains that includes IOTA, NEO, Fabric, ETC or Rootstock
3. Milestone 3 (1^st Quarter, 2019): Delivery of the next-generation sensor integrated with emerging technologies and additional environmental variable (e.g. light/humidity sensor)
4. Milestone 4 (1^st Quarter, 2020): Delivery of the next-generation sensor with an on-chip blockchain node with the integration of more environmental variables. The complete Modum software will be delivered in a fully decentralized architecture

Token Economics

Modum raised a conservative USD13.5 million in its ICO and minted approximately 17 million MOD tokens, after giving a 30% bonus on the first 6 million tokens and another 15% on the next 6 million.

What is great about the Modum’s token economics is that its circulating supply is low, and therefore has good potential to exponentially increase in value. Given that only 17 million out of the allocated 20 million MOD (hard cap) were minted, its maximum totally supply is decreased from 30 million to approximately 27.2 million MODS. Add that to the fact that their market capitalization is hovering at $37 million USD, I would opine that they have much more room to expand given the success of their pilot tests and the lucrative pharma market they’re trying to enter.

(See also: Bitcoin vs Alt Coins Returns: Comparison of Gains Between Bitcoin & Altcoins Investing)

Competitors

Recently, various start-ups (Chronicled, Everledger, Skuchain, Blockverify, ubirch, Provenance etc.) and large corporate players (IBM, Microsoft, Walmart, Maersk, BHP Billiton, etc.) have begun to run proof-of-concept studies, committing significant R&D resources to building new platforms and fostering international collaborations.

Other blockchain-for-supply-chain-startups includes Ambrosys, Provenance, Chronicled, WaltonChain.

Modum’s unique edge over these competitors is that they have focused on a specific, market-driven use case in order to enter the market quickly and effectively. They are focused on applying our technology for use in pharma distribution in order to help distributors and manufacturers meet the updated regulations outlined in the Good Distribution Practice of Medicinal Products for Human Use.

Strengths

• Compelling Business Case: Although Modum’s aims to be the Blockchain leader in the supply-chain sphere, they deliberately chose to focus on Pharma industry as their initial focus due to the compelling need of the industry for a viable enhancement solution. But what’s great about this strategy is that the high standards and requirements of tackling the Pharma industry create a feasible precedent for use-cases in other industries. Also, Modum’s solution tackles a relevant, business need
• Blockchain Agnostic: Although Modum is built on top of the Ethereum Blockchain, it is currently testing integrations with other Blockchains to expand its applications and to avoid dependency on a single platform. They’re also exploring integrations with Rootstock, NEO, IOTA, Tezos, Hyperledger and Waves blockchain
• Broad Applications: The pharma industry is only the first use-case for Modum’s technology, and given that Modum plans to extend their tracking sensors by integrating other environmental variables (e.g. light, humidity, acceleration) gives them an edge in penetrating supply-chains in other industries. This will open up different markets for Modum for future expansion
• Promising Track Record: Modum has had successful pilot tests of its integrated technology, with each successive test churning better results. Their last pilot tests achieved an average readout of 8 seconds for 100% of the shipments, which blew away the customers objective of 95% readouts within 30 seconds
• Strategic Partnerships: Modum has a is supported by a wide range of partners, from The University of Zurich to the Swiss Commission for Technology and Innovation, which is an agency of the Swiss Government. This is a positive sign of credibility
• Low Coin Supply: MOD’s coin supply is fixed at 30 million, with 17.36 currently in circulation. As the business value of Modum increases, the value of MOD tokens will also increase as it is backed by Modum’s earnings. And considering MOD's supply is fixed, its value will increase with time as it’s a deflationary token

Potential Weakness

• Dependency on Regulations: Modum’s foray into the Pharma industry – though solving a real business need – is contingent on the enactment of EU regulations that strictly monitors deviations of the temperature of medicinal products. The rescinding of that regulations may compromise Modum’s advantage of cost efficiency. However, this seems unlikely as the regulations in the USA pertaining to medicinal goods will follow in a similar direction
• Classified as a “Security”: MOD tokens could very well be under the definition of a “financial security” as it mimics the characteristics of shares in a company. Since holders of MOD tokens are entitled to voting and profit-sharing rights, different countries may impose regulatory tax burdens on holders

Summary

Modum is a business that possesses a real product focused on solving a real business use-case. The integration of Blockchain technology, smart contracts and sensory devices allows Modum to have a first mover’s advantage offering a single, integrated supply-chain solution that is well positioned against current industry practices because it offers a passive monitoring solution.

Verdict: Excellent Project

Here is a current list of exchanges that Modum (MOD) tokens are traded on: List of Exchanges

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This represents the writer’s personal opinions and does not – in any way- constitute a recommendation of an investment or financial advice. Please assume caution when investing in cryptocurrencies and do so at your own risk, as it is extremely volatile and you can lose your money.

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