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FastForward Announces Factom Inc. to Enter Receivership

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The Factom protocol is seeing one of its first adopters, Factom Inc., potentially taking its final steps, as the company enters receivership.

While the Factom protocol, itself, was developed and nurtured through its infancy by The Factom Foundation, this board has long since dissolved.  This dissolution occurred after years of developing the protocol, to a point where it was able to operate on its own, in a decentralized fashion.

Unfortunately, Factom Inc., which utilizes the Factom Protocol, has not fared well with the current economic climate, resulting in the current situation.

Factom Inc.

Factom Inc. while intimately related to the Factom protocol, does not represent the Factom Ecosystem as a whole.  They are simply one company, which builds solutions utilizing the open-source and decentralized protocol.

Some of the solutions Factom Inc. has built include,

Intellectual property surrounding these solutions, as well as company assets, will now find themselves in the hands of primary creditor, FastForward.  As such, FastForward will facilitate the upcoming receivership process.

Will FastForward rebrand Factom Inc.? Will they liquidate assets? Will they simply restructure?  Time will tell what this process entails.

Authority Node Operator (ANO)

As an open-source and decentralized protocol, the Factom blockchain is managed through a series of Authority Node Operators (ANOs).  These companies, all of which must meet eligibility requirements and undergo trialling, are described as block validators.

Currently, there are 27 different companies which hold this position, with Factom Inc. being one of them.

The Writing was On the Wall

News of Factom Inc. entering into receivership should not come as a complete surprise.  On March 19, 2020, Factom Inc. creditor ‘FastForward’ indicated that this may happen.

In their update at the time, the company had the following to say,

“…at the end of March 2020, without any additional support or funding, Factom Inc. will be forced to enter discussions with creditors about the distribution of its assets.”

Needless to say, additional funding did not materialize, resulting in the development discussed here today.  On April 2, 2020, FastForward announced the decision by Factom Inc.

Ed McDermott, Director of FastForward stated,

We are extremely disappointed with this news from Factom. In light of this Dissolution Event under the SAFE we are taking swift action to protect our position as best we can in the circumstances albeit the ability to generate any meaningful return is uncertain. As we go through the Receivership process and understand more of the events that led to this position our position as investors in Factom is expressly reserved.” 

Receivership

Receivership is a process built to allow for creditors to gain control of a company.  This occurs in an effort for them to either impart restructuring efforts, or liquidate assets.

The purpose of which is to allow for an opportunity to bring the company back to profitability, and/or reimburse creditors their funds.

On-Going Applications

While these may be dark times, there do remain a few promising applications/implementations of the Factom Protocol, which are expected to be unaffected by the receivership proceedings of Factom Inc.  The following are a couple examples of this.

PegNet

Launched in October of 2019, PegNet is an example of one of the more promising, and successful, applications which utilize the Factom Protocol.  It is also an example of one of the applications not associated with Factom Inc., which will continue to operate unaffected.

To date, PegNet is said to have already facilitated over $1 billion in transactions.

Factom Asset Token (FAT)

The FAT protocol is another example of a project built atop the Factom blockchain.  This one, in particular, holds the promise and flexibility to support digital securities.

We previously took a brief look at how FAT operates, including its ability to support non-fungible tokens.

Security Token Standards – Factom Asset Token (FAT)

What is the Factom Asset Token (FAT) Protocol?

Past Successes

There is an unfortunate trend in the world of cryptocurrencies and blockchain – an attraction to hollow, ‘get rich quick’ schemes.  Visit the top companies listed on coinmarketcap.com, and you’ll see it populated with many companies which have, to put it bluntly, accomplished next to nil.

Unable to crack the top-100 coins by marketcap for months now, Factom, is not one of these.  Overall, the Factom blockchain, and the various solutions built on top of if, have experienced quite a few successes and legitimate adoption over the years.  Arguably the most prominent, and well known, example of this is their proclivity for attaining subsequent government grants and pilot programs.  While the protocol lives on, unfortunately, these examples were not enough to save Factom Inc. from its current situation.

If a company and the protocol it is built upon, which has received this amount of attention from reputable organisations can suffer, so can any.

In Other News

Beyond what has been discussed here today, the following articles touch on multiple recently announced utilizations of the Factom protocol.

Knabu to Utilize IdentityMind and Factom in Pilot Program

Sphereon Chosen to Integrate DAML with Factom Protocol

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