Loom Network (LOOM): A Platform That Facilitates Large-scale Decentralized Apps on the Ethereum Network

Executive Summary

Project Description

The arrival of the Ethereum Network brought lots of great possibilities with it: decentralized applications (dApps), decentralized organizations, decentralized exchanges and so on. As functional as the Ethereum network has proven to be, however, there is a lot still to be improved at the software development level. For one, the network is quite limited and developing commercial-scale applications on the network is very inefficient. At the moment, it would be unthinkable to create a large scale application like a decentralized Twitter on the Ethereum Network. The high gas costs would make it impractical; to send a tweet alone would burn a sizable amount of transaction fees. Additionally, the network has a confirmation time of ~15 seconds, for an application — like Twitter — that is supposed to scale to millions of users, that isn’t good enough.

Loom Network aims to give developers the opportunity to build large-scale games and social apps using DAppChains. A DAppChain is an application specific side-chain that runs parallel to Ethereum; it will allow Ethereum’s computations be offloaded to the DAppChain while the DApp still exists and runs on Ethereum’s secure blockchain. According to the project, DAppChains will make DApps updatable, forkable, and have publicly shared data. Furthermore, Loom DAppChains will reportedly be democratic; users who want to support a DApp and have voting rights in its development will be able to run their own nodes on the chain. If the developer releases an update that the users don’t agree with, they may configure their nodes to reject the update and fork away.

Additionally, reports claim that DApps running on Loom DAppChains will be scalable. All transactions happening on a DAppChain will be specific to its DApp and as a result, the sidechain may use a consensus algorithm that optimizes some transactions and not others. Transactions that require the greatest security, e.g. transfer of tokens and other assets of value can still be run on the Ethereum mainnet, while portions of the DApp requiring high throughput will be run on the DAppChain.

To generate the foundation for a DAppChain, developers will be able to use Loom’s Software Development Kit (SDK). Depending on their needs, deployers will be able to select from various consensus mechanisms, develop their own rulesets, and release fully-contained node software. Using the SDK, there would be no need to implement the consensus layer or underlying blockchain logic, allowing developers to focus on the core app logic.

Existing Product

When they launched their network on the 14th of March 2018, Loom released DelegateCall.com, the first DAppChain built using the Loom SDK. DelegateCall is a Q&A site — à la Stack Overflow — for Blockchain and Ethereum-related questions; users earn karma points when their answers get upvoted and points earned can be redeemed for a tradable ERC20 “DelegateCall token” on the Ethereum mainnet.

The project is currently taking applications from developers for the closed beta of the SDK.

Additionally, the Loom network has released other working projects in the past, including Crypto Zombies, EthFiddle.com and Solidityx.Org.

Hard Cap and Valuation

The Loom project generated a total of 1 billion LOOM tokens and 450 million of them are currently in circulation. The project will have no presale nor ICO, they are privately funded and have reportedly raised about $25 million.

Price Per Token

The presale price of 1 LOOM token was approximately $0.07–$0.08.

Important Dates

The Loom platform went live on the 14th of March 2018.

Marketing Power

As of the time this post was published, Loom Network had over 51,000 people on their email list, over 12,100 members on Telegram, 4,750+ Twitter followers, and over 2,800 followers on Medium.

Team Members’ Areas of Expertise

Business experts

James Martin Duffy, Co-Founder

• Co-Founder and President of Auragin, a herbal supplement brand, for 4 years.
• Founder of KoreaJobFinder.com, an english-based job portal in Korea, for over 3 years. In 2015, he shut the site down in order to focus on Auragin.

Matthew Campbell, Co-Founder

• Co-Founder of Errplane, a platform for real-time application performance, for 5 months.

Nishant Modak & Piyush Verma, Platform developers

• They founded Oogway Consulting, a software and technology consulting company that focuses on scalability, reliability and relevance of software solutions.

Kyle Teague, Proof of Stake Developer

• Co-founder & CTO of OnFrontiers, an online platform that helps business professionals learn faster by connecting them with the right experts, for over a year.

Alex Iskold, Advisor

• Managing Director of Techstars, a VC organization for startups and entrepreneurs, for over 4 years.
• Founder & CEO of Information Laboratory (acquired by IBM), a company that built software analysis tools, for 3 years.
• Founder & CEO of AdaptiveBlue — a company that built semantic web browsing technologies — for 3 years.
• Founder & CEO of GetGlue, a social TV/second screen network, for over 3 years.

Target market experts

Loom Network’s target market is closely related to the software development market segment, and many members of the team have worked in the software development and engineering segment for some years.

Luke Zhang, Co-Founder

• Lead Developer at Blockmason Inc. — a platform with the aim of enriching the DApp ecosystem with secure and functional apps — for a year.

Roy Shapira, Game Architect

• Creative Director at Space Cowboys Studio for over 6 years.
• Lead Game Designer at CI Games for 2 years.
• Lead Game Designer at Ironbelly Studios Inc.

Marketing experts

Yuan Chin Soh, Marketing Advisor

• Associate Marketing Manager at LinkedIn for 2 years. Since March 2017, however, he has been their Marketing Operations Manager.
• Marketing Operations Specialist at Amazon for over 3 years.

Molly Thamrongvoraporn, APAC Marketing Manager

• Contractual Marketing Assistant at Dale Carnegie Thailand, an employee engagement service, for 3 months.
• Marketing at Smithsonian Institution, the world’s largest museum and research complex, for 3 months.

Legal experts

The Loom project’s Legal Counsel is Stephen H. Galebach.

Software engineering experts

James Martin Duffy, Co-Founder

• Lead Developer at Casual Steps Inc., an ecommerce platform, for over a year.
• Founder of KoreaJobFinder.com (see above).

Luke Zhang, Co-Founder

• Developer at Elemica, a business network for the process industries, for 2 years.

Matthew Campbell, Co-Founder

• Technical Architect at several firms, including Thomson Reuters, Bloomberg and Bertelsmann.

Jim Skogman, Application Developer

• Software Developer at several firms, including Codemy.net, Codemate Ltd. and Star Republic AB.

Chinmay Naik, Platform Developer

• Software Engineer at SecurView, a cyber-security solutions organization, for over 3 years.

Nishant Modak, Platform developer

• Application developer at IBM for 6 years.

Blockchain development experts

Luke Zhang, Co-Founder

• Lead Developer at Blockmason Inc. (see above).

Loom Network team has released some projects and these prove their blockchain development expertise.

CryptoZombies

• CryptoZombies is an interactive code school that teaches users to write smart contracts using Solidity.

EthFiddle

• EthFiddle has over 10,000 users, and is the most popular place to share Solidity code snippets.

SolidityX

• SolidityX is a secure-by-default superset of Solidity that compiles down to secure Solidity for deployment, avoiding known pitfalls.

Conclusion

Strengths

• Several working projects (DelegateCall, CryptoZombies, SolidityX, EthFiddle).
• A proposed solution to Ethereum’s scaling problems.
• Gaming, one of their target markets, may become a successful sector in the blockchain space (CryptoKitties).

Potential risks for investors

• The side-chains are currently centralized under Loom Network’s control.

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Disclaimers:

• Nothing written in this article is a legal or an investment advice.
• Information is provided on a best-effort basis and is subject to change without prior notice. Be sure to verify everything you read with a project team.

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The analysis was produced by Research Center team members: Alexander Hinz, Mark Jedd, Eugene Tartakovsky.

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