Dragonchain (DRGN)

Updated: Nov 23, 2019

The Business Ready Blockchain Platform


Dragonchain is a platform originally developed back in 2015, though at that time it was known as the Disney Private Blockchain Platform. In October 2016, it was released as open source software in October and in January 2017 the Dragonchain foundation was established to maintain the open source code. More recently the team decided to launch a commercial entity and raised over $13M during their ICO in October 2017.


Dragonchain markets itself as "the most secure, flexible, and business ready blockchain platform and ecosystem"<1> which consists of a crowd scaled incubator and smart contract marketplace.


Dragonchain Highlights

Started in 2015, ICO was October 2, 2017

Market cap: $549,121,491 <2>

Price per token: $2.30

Reddit subscribers: 3,672

Twitter followers: 52,300

Facebook likes: 3,281

Circulating supply: 238,421,940

Total supply: 433,494,437

Consensus method: ERC-20, Context-based

Website

Whitepaper

The Dragonchain blockchain platform

Dragonchain is made up of three aspects: the platform, an incubator, and the Dragonchain ecosystem.

Dragonchain Model <3>

Most blockchain applications are complex, lack scalability and may require the use of specific coding languages such as solidity. Dragonchain, on the other hand, is a hybrid commercial platform which doesn't fully embrace the decentralized nature of most blockchain platforms. In most cases this is a negative in my books, but in terms of targeting enterprise solutions that deal with sensitive data and are skeptical about blockchain technology, it actually works in Dragonchain's favour. This hybrid platform allows companies to integrate blockchain technology into their business quickly and easily through a number of features including: <4>

  • Serverless system which enables scalability via Amazon AWS, with planned support for Google App Engine and Apache OpenWhisk;

  • Smart contract functionality and libraries that can be developed in all Amazon AWS-supported languages including Java, Python, Node, C# and Go;

  • 5 levels of network consensus to provide security and protect business data; and

  • Currency agnosticism.

The serverless system and development languages is one of the biggest advantages Dragonchain has over other platforms as it solves one of blockchain's biggest issues; scaling. Furthermore, because of this businesses can leverage existing skills and technologies in order to build and maintain their applications, saving development costs and allowing them to deploy quickly and efficiently. Another area Dragonchain's hybrid platform offers an advantage is in terms of data security. This is one of the major hurdles preventing business from adopting blockchain technology, particularly for industries such as banking and health due to the public nature of blockchains and smart contracts. Dragonchain addresses these problems through context based verification, increasing security by enabling business nodes to to approve transactions based on local business logic through 5 levels of consensus: <5>

Dragonchain levels of consensus <6>

  1. Business verification (approval): at the first level, business verification controls the approval of transactions based on localized business rules (trust basis). Since the data makes use of localized business rules, it is considered trusted by the owner and can integrate existing system capabilities, reducing the learning curve of blockchain applications.

  2. Enterprise verification (validation): this level performs real-time governance, which is defined at enterprise level, in order to check the validity of blocks and transactions regardless of local business data.

  3. Network diversity verification: this level provides control and measurement, as well as distributed security from attacks, by ensuring validations from level 2 are coming from a diverse set of sources.

  4. External partner (notary): level 4 nodes are hosted by a trusted external partner which acts as a notary to cryptographically sign any level 3 verifications.

  5. Public bridge: the final level bridges the enterprise blockchain with one or more public blockchains such as Bitcoin.

Through this process of context based verification, business can interact with public blockchains through their own blockchain application, while integrating local business logic and keeping sensitive data away from the public chain.

DragonFund Incubator

The DragonFund Incubator is the pillar of the project which will work with companies to demonstrate how blockchain technology and smart contracts would be beneficial and help those companies develop token ecosystems. In the current crypto environment, this positions Dragonchain to compete with other ICO platforms. However, unlike other ICO platforms, the DragonFund uses a model more like YCombinator where they actively work with the teams over an extended period of time, guiding them through the process. Organizations are able to access a number of benefits via the DragonFund Incubator including: <7>

  • Standard processes for the incubation of blockchain startups and integrations;

  • A marketplace dashboard for community engagement and to monitor and compare projects;

  • Direct access to legal, technical, marketing and economic subject matter experts;

  • The Dragonchain team will help model digital economics within the token model including business design, user acquisition and retention, lifetime value, create of network effects, monetization models, data strategy and KPI's; and

  • Expedited launch cycles.

For companies looking to build out and adopt blockchain technologies but lack the know-how and resources, this will certainly be an attractive offering. Although the details haven't been formalized, the Dragonchain team will receive licensing fees and token ownership in return for incubation; this approach will not only bring revenue to Dragonchain, but token ownership is a strong incentive to work on promising projects.

There are already several projects under incubation including: <8>

  • Look Lateral, a blockchain-based provenance and marketplace for arts;

  • LifeID, an open identity platform which allows users to manage their digital identity; and

  • Seed2You, a smart contract application for the cannabis sector.

Marketplace

The Dragonchain marketplace is where users and businesses can access and purchase pre-built smart contracts and connect with qualified vendors. This is one pillar of Dragonchain that is still in it's infancy so details are limited though I'd expect the smart contract library should be appealing to new ventures as it would save both development work and planning.

DragonchainsTokens

Dragonchain tokens (Dragons or DRGN) are required to interact with the Dragonchain platform, incubator and marketplace and as such are integral to the Dragonchain ecosystem. There are three main use cases that create value for DRGN:

  1. Interacting with the Dragonchain platform to launch nodes, create smart contracts and more;

  2. Dragons are given to developers who contribute to maintaining and improving functionality of the Dragonchain foundation's open source code; and

  3. Dragon holders will be granted presale access to DragonFund incubator projects.

Dragon holders are further incentivized to hold DRGN through an initiative called the Dragon Slumber Score. The higher your slumber score, the greater your discount, the earlier you get access and the higher allocation you receive. The Dragonchain team have produced the following infographic which details how the slumber score is calculated and the role it plays.

Dragon Slumber Score <9>

Roadmap

Dragonchain Roadmap <10>

2018 should be a big year for Dragonchain, with a number of milestones on the roadmap. March will mark the launch of the AWS serverless platform which will enable the Dragonchain platform to scale and will be followed up by Google Cloud in August and Azure in October. In June the commercialized dashboard and marketplace will launch and will be followed by the full roll out of the incubator program in September.

The team

Most of the core team started on the project back at Disney and bring a wealth of experience to the table. Joe Roets, the CEO, was the senior software architect and principal blockchain architect at Disney and has blockchain experience going back to 2014 in addition to over 25 years experience in software development design and architecture. Eileen Quenin, VP of strategic partnerships and president of the Dragonchain Foundation, was a core team member of the initial project at Disney and has extensive UX experience across major companies such as Amazon Payments, Disney and GE. Paul Sonier, CTO, was also involved in the early days and has nearly 20 years experience in software engineering while George Sarhanis, CBO, has nearly 20 years experience in business management, strategy, finance and partnerships.

The advisory team definitely isn't to be overlooked and includes Maria Smith, the VP of partnerships and payments for Starbucks and former VP of finance for Disney, as well as Ed Fries, the former VP of Microsoft, co-founder of Xbox and board member for several gaming, VR and technology startups.

What sets Dragonchain apart

  • Platform projects have been amongst the most successful applications of blockchain technology (Ethereum, NEO, etc.);

  • The platform has been developed and iterated upon over several years;

  • The hybrid structure which integrates local business rules is more likely to be trusted by organizations and can be quickly and affordably implemented;

  • The 5 step context based verification should address data privacy concerns for many companies;

  • Support for all Amazon AWS languages removes a significant barrier of adoption and enables organizations to make use of existing skills;

  • Serverless platforms will address scalability issues other blockchain projects have;

  • The incubator program is an attractive option for organizations looking to get started with blockchain technology and offers a positive spin on the ICO space;

  • There is a clear use case of the DRGN token and incentive to hold via slumber score;

  • There are a number of existing incubator projects which shows some early adoption;

  • The team is U.S.-based which should help with adoption in a major market;

  • A strong team with extensive experience and familiarity working with one another;

  • All-star advisors; and

  • Currency agnosticism and ability to interact with other public blockchains.

Concerns about Dragonchain

  • Platform projects are a competitive space with existing market leaders like NEO and Ethereum and a growing number of enterprise-focused platforms like ARK and Neblio;

  • Large organizations have begun developing their own private blockchain platforms which may threaten Dragonchain;

  • Although they have a few existing incubator projects, I've yet to see any solid evidence of any major partnerships or commercial entities that are considering making use of the Dragonchain platform;

  • Vision for the marketplace seems lacking at this point in time and seems to be a bit of an afterthought when compared to the other two pillars of Dragonchain;

  • The economic model has not really been defined as they are focusing on the platform, however the amount of revenue generated through commercial platforms and incubator projects will likely influence the price of DRGN; and

  • Given the total supply at the peak price, the valuation of Dragonchain was well over $2.5B which is a high figure for something with minimal adoption.

Competitors

As mentioned above, there are several competitors in the platform and enterprise platform space, some of which I'm a big fan of. However, Dragonchain's hybrid structure differentiates it from these other platforms and offers significant advantages in terms of speed to market, cost and support.

The biggest competition for Dragonchain, in my opinion, doesn't actually come from existing blockchain platforms. Many large corporations including tech firms, banks and more have already started actively developing their own private blockchain platforms. My first concern is that this potentially eliminates a huge market for Dragonchain and my other concern is that once these private blockchains are developed, they could then be offered to other organizations, like selling software. If that's the case though, there's likely still a niche for Dragonchain with mid-sized organizations who are interested in developing their own blockchain platform but don't have the resources and skills. The incubator program as well should remain a fairly unique offering that could become the primary pillar if Dragonchain struggled in the commercial platform space.

Conclusion

Dragonchain is an enterprise blockchain platform and ecosystem that makes use of a serverless platform and AWS-supported languages to get businesses up and running with scalable and secure blockchain technology. The ecosystem also consists of a YCombinator-style incubator and smart contract/vendor marketplace, all of which integrate the Dragon token.

The Dragonchain platform overcomes many issues facing current blockchain technology including security, scalability, technical ability, and speed to market while the incubator provides a new, more comprehensive twist on current ICO's. The team and advisors are strong and have extensive experience, the project has been in the works for years and there's a clear value proposition for the services offered and the Dragon token, all of which make me a fan of the project. I think it's a great play in the short-to-mid term, especially with more incubator projects in the works; long term I have concerns about Dragonchain, mainly due to the reasons outlined in the competitors section.

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References and Notes

<1> Quoted from https://dragonchain.com/

<2> Price, market cap, supply and logo are taken from coinmarketcap.com. All social stats taken directly from social media pages

<3> Image taken from page 11 of the Dragonchain whitepaper

<4> Adapted from page 2 of the Dragonchain whitepaper

<5> Details adapted from pages 6-7 of the Dragonchain whitepaper

<6> Image taken from page 6 of the Dragonchain whitepaper

<7> Taken from page 2 of the Dragonchain whitepaper

<8> Projects taken from pages 12-13 of the Dragonchain whitepaper

<9> Image taken from https://dragonchain.zendesk.com/hc/en-us/articles/115003711091-What-is-a-Dragon-Slumber-Score-INFOGRAPHIC

<10> Image taken from https://dragonchain.com/roadmap

All other information is either adapted from the whitepaper and other research or is personal opinion.

Crypto Advocate has holdings in Dragonchain.


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