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SONM From Russia with Love Red Flags: Past ICO Review

Wed, 05/30/2018 - 09:31
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Eric Eissler
Fog-computing platform is opaque when it comes to answering questions; cries of “scam” abound
SONM From Russia with Love Red Flags: Past ICO Review
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The race for supercomputers has been a paradigm that has run from the 1950s through the present day. The Soviets sent the first satellite and the first man into space, but the Americans sent the first man to the moon.

It has always been one trying to outdo the other. This time, in the race to create a cloud-based (or “fog” according to the website) supercomputer, the Russians have come up a bit short and with a few red flags.


Got some spare change?

SONM’s one-day ICO on June 15, 2017, raised a surprising $26 mln and entered the token trading market one month later at $0.03 per token. At the time of writing, it has risen to $0.21 per token.

In the interim, if it had experienced a surge to a max of $0.70 in January 2018 as many other tokens did during the tumultuous times around the holidays.

A fistful of change will get you a few tokens, but it is uncertain how this token will fare because there are a few red flags that make the tepid investor stop and wonder.


Waving red flags

When you speak the truth, there is no need to make up a story with holes in it. When you like you change details or terms, such as percentages. According to a story on Reddit, The dividend percentage, which is something that should be decided very carefully and shouldn't change at least after pre-ICO. That's what a reliable company would do. SONM did not.

Furthermore, they did not use escrow, but rather the team had multi-sign contracts that the team held themselves, this raises some suspicion, because a third, neutral party should be involved with kind of financial instrument due to the ease of committing fraud.

Moreover, the communications with the public, investors and potential investors  are filled with unanswered or vaguely answered questions which adds more to the bad public image the company already gave itself.

On a final red note, there were many accusations of scam floundering about, while, it seems some people might have gotten burned, SONM did not close up shop and run away with the money, it is still up and running and on the boards to trade.

But with a shaky start and foggy background, many would be leery about investing money in something that might just shut down overnight.


What is it supposed to do anyway?

Glad you asked, SONM is akin to Golem, and a direct competitor too. According to the Somn website:

SONM Customers (consumers, clients, buyers) are people and companies, that have a demand of computing powers- hardware PCs, servers or virtual machines of different kind. Customers define what resources and capabilities are required and what price is acceptable for them on the global decentralized marketplace of SONM.

Tight-lipped and shadowy

After scouring the Reddit boards, there appear to be some angry people that seem to have gotten burned, or who feel ripped off in some way after investing.

Despite all this, the company continues on and so does the trade, albeit the price has not risen much since January 2018.

Flat activity could be some indication that there is a lack of interest and general wariness towards this company.


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About the author

Eric Eissler is based in Chicago and works in higher-education administration and finance. He is a freelance writer covering blockchain technology, fintech, cryptocurrency, the oil and gas industry, and international politics.