Does it Really Cost $50M to Fund PolySwarm’s Anti-Virus Company?

PolySwarm is raising $50 million to fund its noble effort of becoming a decentralized threat intelligence market made possible by Ethereum smart contracts and blockchain technology. Polyswarm incentivizes rapid innovation in the $8.5 billion per year anti-virus and automated cyber threat intelligence space with precise economic incentives that reward timely and accurate threat intelligence concerning the malintent of files, network traffic and URLs. So far, PolySwarm has raised about half of the $50 million and will end its public sale of tokens on March 22, 2018. I watched a very informative ICO Review on PolySwarm from David Hay, watched PolySwarm’s 2-minute pitch video on its website, and read its white paper to come up the curve on their business plan, but I am still a little foggy on why they need $50 million to run, grow, and maintain their business.

This is not a shot at Steve Bassi, Paul Makowski, Ben Schmidt, Nick Davis, or Max Koo (the founders of PolySwarm), but I would just like to know why it cost $50 million to fund essentially a community of virus special ops commandos who are rewarded like mercenaries via “bounties” of Nectar tokens when they take out a virus. After reading the white paper, I have a better understanding of the math associated with the distribution of funds. Just so everyone is on the same page, here is how the math breaks down: 70 percent of the tokens are being sold in the public sale, so if 70 percent equals $50 million then the total value of PolySwarm is just over $71 million; there are 1 billion Nectar tokens but only 500 million currently in circulation, so that puts the price at $0.142 per token; 15 percent of the remaining 30 percent will be distributed to enterprises, vendors, and security experts joining the PolySwarm ecosystem; and the final 15 percent will be used by Swarm Technologies, Inc. (the parent company and developer of PolySwarm) for marketing of PolySwarm through “hackathons” – great event name BTW.

I’m sure you are probably bored with math, but my mama was a math teacher so it’s kinda my thing and there’s just one more math illustration I’d like to highlight for you. In the “Distribution” portion at the end of the white paper, the math is broken down as follows: 55 percent will be allocated to protocol and software development (that’s $27.5 million of the $50 million); 15 percent will be allocated to legal ($7.5 million); 14 percent to marketing ($7 million); 10 percent to tax ($5 million); 3 percent to office expenses ($1.5 million); and 4 percent to operational overhead ($2 million).

Finally, I’d like to touch on the “Roadmap” for PolySwarm: Alpha Version on April 30, 2018; Beta Version on May 31, 2018; Gamma Version on July 31, 2018; PolySwarm 1.0 in the fourth quarter of 2018; and PolySwarm 2.0 in the second quarter of 2019. Enough math and timeline talk out of me, and I just want to be clear about my intentions for this article… It is my aim to ask questions when I do not understand why something does not make sense. I have some experience with cybersecurity and software development but am a novice at best, which is why I would like to here from the above-mentioned management team on the reasoning behind the need for $27.5 million to develop the software and protocols for PolySwarm – to be fair that number would only be about $13.75 million as of the funds raised right now but still that is a lot of cheddar. Thank you for reading, and I look forward to clarification and education by the powers that be at PolySwarm…