Modum (ticker: MOD) is a supply-chain blockchain solution that tracks sensitive conditions during the transportation of goods, specifically pharmaceuticals. It solves the problem of pharmaceutical companies required by EU regulations to strictly manage the temperature of drugs at all times, which is most problematic during times of transit.

The system works by matching a physical logger that is sensitive to changing temperatures to a smart contract that has been signed before pharmaceuticals are distributed. If conditions are met, the pre-agreed payment conditions go through, but if the logger notices a breach of the contract, payment is not released. At that point discussions are expected to occur between the relevant parties. Modum claims its platform could save industry-wide expenses in the EU by 3 billion USD. [1]

Modum is an ERC-20 token. The Modum token acts as a profit-sharing token and acts as a right to vote on certain company decisions. The amount of profit or voting power one person is entitled to is proportional to the amount of Modum token they own relative to the public circulating supply.

Sentiment analysis

  • Open source: Yes

  • Telegram: 2758, 1738 (first for discussion, second for announcements)

  • Twitter: 14,700 followers

  • Reddit: 6100 followers

  • Blog: Medium Activity, monthly updates from founder


Modum was founded in 2016 and launched in August 2017 after several prior trial runs. The website lists 27 employees and five members on the board of directors. The employees include five software engineers, four embedded engineers and two data scientists. There are three in product management and two in marketing. The board of directors include two blockchain experts, a pharmaceutical distribution expert and legal expert. Several of the board members have previous success with startups, but no highly visible blockchain projects. [2]

Utility and Incentives

MOD is an ERC-20 token, so it uses the same consensus algorithm as Ethereum, which is currently proof of work.

As an incentive scheme, Modum has set out certain milestones it aims to reach. All holders of MOD can vote at a predetermined date on whether a milestone was met, where one MOD token counts for one vote. If a majority says it has, a predetermined amount of stored MOD are released to the wallet. MOD owners also receive dividends in periods where there is a reported profit.

The incentive for users of Modum is that they have a say in whether or not the team at Modum has done sufficient work to deserve their locked up tokens. Modum holders are also incentivized by the idea of a direct revenue stream from company profits. While this incentive seems very straightforward and attractive to someone new to cryptocurrency, there isn’t much structure on when profits are awarded to the token holders. For example, there isn’t anything in place that stops Modum from raising costs for development of the company rather than paying out token holders. This decision is not voted on by MOD owners. However, since the Modum team is incentivized by a pool of MOD, they should be doing everything in their power to raise the price of MOD, which means actually paying out a dividend of the profit.

It is worth noting here that a profit sharing token can easily be seen as a security, and that Modum is open to regulatory risk as it did not raise money as a security, but rather as a utility token.


Modum raised funds via an ICO. They raised $13.4 M USD. They sold 14,670 of 30,000 tokens. The sale lasted three weeks. 3% of the total tokens issued were also held aside for a bug bounty program, which rewarded developers for finding bugs in Modum’s open source code. [3]

Market Opportunity

Modum intends to disrupt the pharmaceutical logistics market, and potentially other markets that require temperature sensitivity during transportation. The pharmaceutical industry in the EU is worth over 160M euros as of 2018, and the US is likely to follow it with stricter pharmaceutical transport regulations.[4] These markets have a potential for disruption because the strict regulations require an easy way to ensure they have been followed. SophiaTX (ticker: SPHTX) is another token focused on pharmaceutical logistics. The SophiaTX platform also focuses on transportation and construction, potentially giving Modum an advantage in the pharmaceutical center due to resource allocation. Both are Switzerland-based, and SophiaTX has received good media press, but Modum does have first mover advantage, with SophiaTX publishing a whitepaper in November 2017, and launching their Mainnet in July 2018. SophiaTX’s market cap is $10.2 M USD in contrast to Modum’s $3.6 M USD, but again, SophiaTX is focused on more use cases than just pharmaceuticals, focusing on blockchain integration into business processes more broadly.

Current Status and adoption analysis

Out of the 4 milestones outlined upon launch, Modum has completed 2 so far, and the next 2 have not reached their minimum deadlines. The next major milestone is to integrate an additional environmental sensor by the end of Q1 2019 (at the earliest).[5] The biggest obstacle for Modum at the moment is institutional partnerships. Since this is a corporate enterprise, it relies on securing relationships with distributors of pharmaceutical products. It is also limited to regions in which regulations dictate strict temperature controls for pharmaceuticals. The token seems easy to use and has received good response from industry thus far. Insofar as Modum saves distributors (both wholesalers and online sellers) money and ensures easy cooperation with regulations, it can gain high levels of corporate adoption.