Guest post by our partners at Ironwood Research Group
Classification: Utility Token
Circulating supply: 103,665,203
Total supply: 200,000,000
Market cap: $956,325,913 USD
Bittrex, Binance, Cryptopia, HitBTC, CoinExchange, Cryptox
Consensus algorithm: dPOW
As of: 2018.01.13
Komodo offers a decentralized, secure, private, and energy efficient transaction and dapp development platform. Over the years, the team has been working on a blockchain project known as the “Atomic Swap.” This technology allows you to trade from blockchain to blockchain, bypassing the need for centralized exchanges if one would like to trade one coin for another through your own wallet. This is quite an innovative and far-reaching feature, as currently most coins can only be purchased via fiat, BTC, and ETH through exchanges. The product is made anonymous through the use of JUMBLR. JUMBLR is a coin anonymizer that does not require any form of centralized assistance. Due to the project’s success, Komodo has made a significant partner – Monaize. Monaize is the first ever decentralized initial coin offering, or “dICO,” which aims to be the first crypto banking platform for small businesses, allowing would-be businesses to be remotely approved within minutes after uploading the required credentials, and provides a Black Monaize branded business card from MasterCard.
At the present time, most of the trading volume on crypto exchanges is spread over a few large centralized trading platforms, which have a good GUI (graphical user interface) and already hold a large share of the total daily volume. However, these platforms are relatively unsafe, as it requires users to trust centralized exchanges in withstanding any potential security breaches. Mt. Gox, for instance, was compromised in the past, resulting in the loss of 744,408 Bitcoins. BarterDEX, Komodo’s trading platform, avoids this potential scenario with three main components, namely through:
“Order matching, trade clearing and liquidity provision into a single integrated system that allows users to make coin conversion request, find a suitable match and complete the trade using an atomic cross-chain protocol.”
Thus, the problems that are found in most centralized trading platforms are not a concern. This is all done for a fee of 0.15%. For comparison, the most popular exchange in the United States, Bittrex, has fees of 0.25% applied to both the seller and the buyer, collecting 0.50% fees in total; whereas fees are only collected from sellers on the DEX, totaling 0.15%.
Another feature offered by BarterDEX is liquidity multiplication. In short, liquidity multiplication is the ability to put up multiple orders with the same funds. For example, say a person has 1 BTC. On a regular exchange, this person could only put a single buy order in for 1 BTC worth of KMD, but thanks to liquidity multiplication this same person can put a buy order of 1 BTC on a variety of different coins on the BarterDEX exchange. Of course, once one of the buy orders is filled, the rest will be cancelled. This is a perfect use for traders waiting to catch a flash crash of a particular coin. This is one of the key ways that the BarterDex plans to fight whales on their platform, seeing as if everyone has funds that can be automatically reallocated based on supply, in theory, the markets may be harder to manipulate.
The algorithm used by Komodo is a unique variant of the proof of work consensus called delayed proof of work (dPoW). This creates a platform that is secured by BTC’s hash power, and is fast and energy efficient. In addition, Komodo is protected by a fail-safe. For example, if the KMD blockchain were to fail, the BTC blockchain and the blockhash are available; and due its unique notary node system, the consumption of energy is lower than if it were to use computational power (PoW) to solve for the new block. To attack and destroy the Komodo platform, every single bit of information about it would need to be destroyed, because a single accurate copy of the KMD blockchain history is enough to build everything back. This feature also applies to asset chains (more on asset chains later). Usually, newer cryptocurrencies have weak security because of their lack of hashing power, but with the Komodo platform, the new currency is immediately secured by the Bitcoin blockchain through dPOW. What is important to note is that this ensures a transaction is going to be quick, inexpensive, and yet still secure (even for newer currencies). Another benefit to this is that it is a flexible system. If, for example, Bitcoin became less secure than another chain, such as Dogecoin or Litecoin, the Komodo team has contingencies in place to be able to switch the hashes to the respective coin that is the most secure.
The BarterDEX platform is anonymized by the JUMBLR system. This technology allows its users to privatize their coins. In short, the system sends the funds from a transparent address to multiple zk-SNARK addresses. A zk-SNARK address uses the technology used by Zcash. This technology allows transactions to remain fully encrypted, yet also remain verifiable and valid on the blockchain. What is important to note, however, is what it does – it makes the coin anonymous and cuts any trail to the user. This process is another way to remove any need to trust an external party, as when mixing or tumbling coins. Currently, only the KMD coin can be used in this process. This means that when using JUMBLR for, say, Horizon State (HST), the coin will automatically be traded for KMD coins. The fees to use the JUMBLR service are 0.3%, and this is significantly lower than all the known BTC tumblers. For comparison, CoinMixer has random fees of 1-3% plus a standard 0.0005 BTC. The positive side of this is that it is one of the few systems that truly anonymizes coins on a trustless system, as coin mixers are notorious for their use on the dark web and thus can be risky for those that are interested in anonymity.
As mentioned before, there is a relationship Monaize, the first-ever dICO, which, with the available information at hand, is set to be a very successful project, as it is an attempt at creating an inexpensive and transparent e-banking platform for small businesses that utilizes cryptocurrencies. If Monaize proves to be a success, more partners are sure to be announced. Unfortunately, the dICO was delayed temporarily in order to improve technical difficulties with some of the simpler aspects of the system. That is, while performing a simulation of a dICO, the Komodo team noticed a few problems. The main problem (a lack of liquidity) was fixed in a mere three hours by the team, but there still remain issues the team faces. One issue the platform has is that there is significant congestion of the BTC blockchain, which can cause an atomic swap to fail, though the development team has a workable solution. Further, users also have trouble understanding how UTXOs are used, which, due to the complexity of UTXOs, KMD is working on a completely back-end process for this, enabling a seamless experience for the user, with no technical expertise being required.
To expand some on UTXOs, BarterDEX shows the value of UTXOs, but it cannot break it down into a more convenient number – only the blockchain can. This is an issue for people with a lack of understanding of what BarterDEX does and how it works, and this directly affects Monaize as the dICO requires the use of atomic swaps to receive the coins. Since people have trouble understanding the nature of atomic swapping and their relation with UTXOs, the team has decided to delay the dICO to make the process simpler. To solve this final problem:
“[The] Komodo team added an autosplit function as an API call that automatically splits UTXOs prior to the swap, providing a more user-friendly trading experience. [This] function is now being integrated into the GUI.”
We deem it a sign of professionalism that the team delayed the dICO, as it shows they are committed to making such an important feature of their platform a resounding success rather than just getting by with what they currently offer.
Among all the other decentralized platforms Komodo is competing with, Ethereum is by far its biggest competitor, and is so far in the lead in terms of visibility and market cap. Both platforms were launched at a similar time, yet Ethereum is much more prominent than KMD ever was. Nonetheless, Komodo provides better anonymity, energy efficiency, and security that are not equalled by Ethereum as it stands now.
Unlike Ethereum (which is currently having trouble with blockchain bloat), Komodo has very high scalability due to its asset chains. Asset chains are separate blockchains that are easily created through the Komodo daemon. These asset chains have all the features that the KMD coin has but are independent from it. These coins can even be traded as WLC (WLC is an asset chain that is currently traded on Cryptopia). Not only does KMD already handle around 80 transactions per seconds but all the asset chains also handle this many, if not more. An asset chain can be created to replicate already working technology used by other coins to increase the scalability, and the more asset chains there are, the higher the number of potential transactions there can be. Since these asset chains have their own blockchain and their own nodes, they don’t overwhelm (bloat) the Komodo network like an ERC20 token would, slowing down the network. The more ERC20 tokens there are, the slower the ETH network becomes. Unlike the Ethereum network, Komodo will not see any decrease in the speed of its network no matter the amount of asset chains. Further, through the use of parallel asset-chains, Komodo will one day be able to potentially process a number of transactions not seen before in the world of cryptocurrencies, as outlined in this video.
One of the most important features Komodo offers is decentralized initial coin offerings. ICOs are always risky as:
“ICOs are generally conducted in escrow, whereby the purchasers must transfer money to one node, typically a website on a single server, and then wait while the issuer verifies the transactions, and eventually distributes the coins. During this time, the funding is centralized, and therefore vulnerable.”
To address this issue, Komodo decentralizes the ICO. When an ICO is centralized, everything is hosted on a single node. This means that you are at a risk of losing your funds if there is any problem with the node. The solution is to decentralize the ICO. The coin offered is spread over multiple nodes, so the funds cannot be entirely lost as the nodes only hold a fraction of the total supply. Additionally, dICOs also have the advantage of allowing anyone to invest without any regards to their country of origin, since no one can verify the exact provenance of the funds in a decentralized ICO. The advantages dICOs have over a standard ICO are quite considerable, as they are safer for both the investors and the company, and all-around more equitable for would-be investors.
Finally, those staking Komodo can enjoy a 5% growth of their stack every year by simply holding the coin in one’s personal KMD wallet (not an exchange wallet). This is due to there being 200 million coins available, but only 100 million are currently in circulation, with the rest being used to pay out in interest. For example, someone holding 1,000 KMD coins on his desktop wallet will have 1,050 KMD coins after a year (provided he transfers the coins to a new wallet address) or uses the “claim interest” button in their native wallet. This transfer can be done at any time of the year as the interest gain is calculated with each new block. Therefore, the person holding the 1000 coins could hold them on his desktop wallet for 6 months and then decide to transfer them to another wallet address to gain 25 KMD. The 5% would then be applied over 1025 KMD instead of 1000. The team estimates it will take around 14 years to give out all of the additional 100 million coins. A person holding 1,000 coins would have nearly 2,000 when there are no more coins to release, all from interest alone. The interest is also calculated every block, meaning there is no problem moving KMD coins to sell or purchase and still receive the interest. This feature also means that there will always be locked up coins, which will increase the scarcity for the coin and, therefore, the price.
Most, if not all, of the Komodo team members believe in privacy protection, and hence, they use pseudonyms. Some of the key team members are:
JL777 “James Lee”
Lead Developer (Founder)
JL777 is an anonymous developer and founder of Komodo. Prior to working on Komodo, James worked on a variety of projects, including JL777Hodl, MGW, NXTventure, Iguana, crypto777, and InstantDEX. James has been fairly active online, and much of his coding and projects are available for public viewing on his GitHub.
CA333 (Kadan Stadelmann)
General Manager (CTO)
CA333 is in charge of security on the Komodo team. His work is mostly working with security tests, network tests, and troubleshooting with the team’s developers. He also does marketing work, such as by visiting expos and conferences. Prior to working with Komodo, CA333 was the IT Project Leader and a Software Developer for the Austrian Government.
Fadedreamz (Mohammed Nazmul Alam)
Fadedreamz has more than five years of experience working with a Fortune 500 company (Samsung), where his task was to write Linux device drivers, Windows device drivers, portable frameworks (Android, Linux, Windows, Raspberry Pi, iOS), and to facilitate end-to-end solutions involving customized hardware. He has a BSc in computer science (Khulna University), and is currently working on finishing an MSc in computer science (Concordia University).
Sysadmin / IT Expert
Mihail is a security specialist, systems administrator, developer operations engineer, and PHP developer. Prior to working on the Komodo project, Mihail was the Lead Developer and Security Engineer for Dengi Online, and is currently the Chief Technology Officer for Creative Telematics & Trade.
Project Manager / Front-end Developer
Satinder works fulltime on the SuperNET/Komodo project, and is in charge of developing the GUI implication of EasyDEX (now unused as it is the predecessor of the BarterDEX). EasyDEX is the Komodo decentralized exchange platform. Additionally, Satinder has been active with Komodo at conferences, and runs a YouTube channel in support of the project.
Additional members on the Komodo Developer team include Rick, Decker, Pbca26, and Srg. The Komodo team is also supported by a number of administrative and support team members, in addition to ambassadors, advisors, and the marketing team.
The ICO started on October 15th and ended on November 16th, 2016, with bonuses ranging from 25% to 5% depending upon how early investors participated. The ICO raised $1,983,781 in total.
- According to Komodo’s website, they are in the process of upgrading their site with new functionalities, content, and design.
- The Komodo team is looking for even more members to be a part of their team. They are hiring writers, social media experts, ambassadors, and full stack developers.
- A new version of BarterDEX was released as of December 16th, 2017.
The Komodo Platform is far from new to the scene of cryptocurrencies. While it has never drawn too much attention to it in the current booming market, it seems like that is about to change. Komodo has done considerable re-structuring with their team since its inception, and they seem ready to release their full suite of features. However, Komodo will not be entering a vacuum; there are already a slew of existing platforms that it will be competing with. The two most notable would be Ethereum and NEO. Ardor is also a platform with a similar structure to Komodo that is currently more comparable with Komodo based on their market capitalization.
To carve out its niche within this technological space, it is going to have to stand out from the rest. Its dICO, privacy features, and asset chain structure gives it an edge over Ethereum in its current state, theoretically fixing the current scaling issue and offering business a way to keep sensitive information secure. Furthermore, in the long run Ethereum has a roadmap aiming to fix these issues, but they aren’t currently in place. If Komodo is able to establish themselves as an alternative in the meantime, then it is likely to grow alongside Ethereum in the future. However, Komodo will be competing more closely with NEO, which does not currently suffer the scaling issues of Ethereum, and NEO is currently positioning itself as a solid and serious platform for business, compared with Ethereum’s more open ecosystem.
They will also be hosting the first-ever dICO with Monaize, an event, if successful, that is likely to let Komodo attain new heights and more recognition in the space. Recently, Komodo has seen a surge of new members on its various social media platforms, and has started to garner considerably more attention in the past few months. Ironwood expects Komodo, with its varied feature set, to perform well in this rapidly emerging market.
Disclaimer: All content provided by IRG are our observations and should not be considered financial advice. IRG is not an investment group; we are a research group that meticulously scans the market for those projects we deem to have the most potential. Cryptocurrency investment is subject to high market risk and volatility, invest responsibly at your own risk.
Seek a licensed professional before making any investments.
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 Carter Dougherty & Grace Huang, Bloomberg, February 28th, 2014, https://www.bloomberg.com/news/articles/2014-02-28/mt-gox-exchange-files-for-bankruptcy
 JL777, barterDEX Whitepaper, October 30th, 2017,
 Komodo, “Monaize Mock dICO Transparency Report,” https://komodoplatform.atlassian.net/wiki/spaces/KPSD/blog/2017/11/12/10518596/Monaize+Mock+dICO+Transparency+Report
 Komodo, “The Decentralized ICO Platform,”