CPChain — An IoT Solution from Academia
TL;DR. Ecology:2. Technology:4. Decentralization:2. Valuation:3. Rating:3/10
(Update 2019-01-22: Please see the semi-annual ratings review of CPC here.)
CPChain, short for Cyber-Physical Chain, did not debut with a bitcointalk.org announcement thread. Instead, sporadic threads were posted by regular users, with general questions regarding the project. With a focus on Internet of Things (IoT), CPChain aims at providing a platform that efficiently integrates a flow of information with physical objects. At the same time, since this integrations occur over a public blockchain, real-time data can immediately be monetized. The solution is claimed to reduce overall interconnection costs while having the potential to for example increase privacy and security. Interconnection costs can be compared to for example different IoT protocols on a fragmented market. Additionally, CPChain will have distributed storage functionality in an attempt to make scaling easier.
A mainly Chinese team is lead by CEO and founder Long Chengnian, a professor at Shanghai Jiao Tong University. He is also an IEEE senior member and an ACM member. As early as 2014, he took some doctoral students of his, as well as some graduate students, and began experimenting on combining blockchain technology and IoT, which he now claims is a good fit.
A private sale in January 2018 seems to have been conducted mainly for institutional investors. VeChain, Qtum, HPB and Metaverse are all early investors in CPChain. The hardcap of USD 30M was reached. After this private sale, a total of 1B CPC tokens of ERC20 standard were issued, of which approximately 38% are circulating at time of writing. The team's 250M tokens are vested up to 3 years, with releases quarterly. A further 350M tokens are allocated to what is named "community governance". When mainnet is launched, all token holders will be able to switch to real CPChain mainnet tokens.
A tiered masternode system will be put in place, where apparently more tokens entitle the owner to a higher level masternode. More information about the system will be released in August 2018. It is at least confirmed that the consensus mechanism of choice is reputation based DPoS with possibly 21 block producing delegates. The white paper mentions a future Singaporean Foundation that will act as the main governing body of CPChain.
On the 27th of June 2018, the first alpha of PDash was released to the public. The platform makes up the foundation of CPChain's IoT data marketplace. Planned launch for mainnet is set to October 2018.
As the CPC token right now is of the ERC20 standard, it is hard to measure any economic activity surrounding the project. Looking at the token smart contract, it is evident that less than 100 Ethereum transactions per day are related to the transfer of CPC. As soon as mainnet is live, real usecases will be able to test the waters and a broader ecology is able to slowly form should the blockchain provide the promised utility.
It is a bit strange to run a large private sale without detailing the master node system of the blockchain. It cements a culture of trust from the very beginning, and the only possible defense CPChain might have for this choice is that their research has not been fully concluded on what consensus mechanism structure is most suitable.
CPChain is by all means not the only public blockchain that focuses on connecting IoT hardware and software, with said blockchain. IOTA is possibly the most famous counterpart. BD Ratings does not claim expertise on IoT protocols or even concrete usecases. It is a bit hard to establish obvious improvements by using blockchain technology together with IoT, other than possibly reducing some interconnection costs. An apt comparison might be the relatively low cost of value transfer over a blockchain, as opposed to the higher costs when using banking through Western Union etc. A global protocol of IoT might very well be easier to implement on a blockchain which is in its nature global already by utilizing internet. But in general, things get less, not more efficient, when implemented on a blockchain.
Reasons: Low on-chain activity. Mainnet not yet launched. IoT usecases with public blockchains yet to be proven.
When it comes to IoT technology, the CPChain team has great knowledge through Long Chengnian who seems to be respected in such circles. Co-founder Bin Zhao also seems like he holds a lot of merit as he worked as a chief engineer of the IoT at Shanghai Bell, a prestigious research lab company. The rest of the team consists of around 25 people, most of whom are developers. Around 40 people are expected to work on the project at the end of 2018 according the the CPChain team.
The CPChain code itself is open source, but uploaded in snapshots. At time of writing, it seems only the PDash client is uploaded. This is somewhat strange as mainnet is planned to launch very shortly.
There are still not enough information about the DPoS consensus mechanism and how the different kinds of master nodes work to set a full Technology rating verdict.
Reasons: Strong team. No mainnet and few mainnet specifics.
The main issue with this coin that is of highest importance is that of token allocation. As stated earlier, only about 38% of all tokens are circulating right now, while the rest are temporarily locked up. Since CPChain will have some kind of master node structure, possibly even with as few as 21 block producing nodes, a large threat to the blockchain's integrity is that CPC tokens are concentrated in few hands. If more than 50% of tokens are controlled directly or indirectly by the CPChain team, they will have direct control over the chain and may hardfork at will, censor transactions or whole accounts etc. The whole DPoS structure would be superfluous and the team could build the IoT infrastructure on regular databases instead.
Some code is now on GitHub, and it is very likely the mainnet code will in time be published there as well. Anything else would be unacceptable from a decentralization point of view as users should not have to trust what the clients are doing.
Reasons: Concentrated token ownership.
With a USD 68M at time of writing, as BD Ratings takes in to account the locked up tokens as well, CPChain does not stick out as overvalued when only considering the strong academic team. IOTA is obviously much higher valued, and so is VeChain. What really limits the Valuation rating is the lack of decentralization within the project; far too many CPC tokens seems to be controlled directly or indirectly by the CPChain team. As the mastermodes together run the network, this token concentration puts the chain in severe danger of being controlled by a few people. BD Ratings expect a mainnet release to answer multiple questions about this project, and a proper ratings update will be published after that.
Reasons: Concentrated token ownership.