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Analysis of UnikoinGold – Decentralized eSports Betting Token

Analysis of UnikoinGold – Decentralized eSports Betting Token

Summary

  • Project name: UnikoinGold
  • Token symbol: UKG
  • Website: https://unikoingold.com/
  • Whitepaper: https://unikoingold.com/whitepaper
  • Hard cap: US$100 million (ICO contributors own 20% of total token supply if hard cap is reached)
  • Conversion rate: Total supply of 1 billion tokens
  • Maximum market cap at ICO on a fully diluted basis: US$500 million if hard cap is reached
  • Bonus structure: None
  • Presale or white list: Pre-sale is over
  • ERC20 token: Yes
  • Crowdsale date: September 22, 2017 (please refer to UnikoinGold’s website for the most up-to-date information)
  • Token distribution date: Not specified
Video summary (video is 10:08 long):

Project Overview

What does the company/project do?

Unikrn is a gaming and eSports company based in Seattle that was established in November 2014. It is a fully-regulated and licensed eSports bookmaker with a wagering platform for eSports.

Unikrn created a token called “Unikoin” which gave users an opportunity to bet on eSports, ladder up and win prizes in markets where Unikrn was not yet licensed to conduct real-money wagering. Below are the products and services that Unikrn provides.

Gambling: 

– Includes skill-based and spectator-based wagering.

Raffles:

– Users can acquire jackpot tickets to win prizes (e.g. in-game items like skins, gaming hardware and accessories). Unikrn will also develop exclusive raffle rooms (“exclusive rooms”) where only users who purchase golden entry tickets using UKG will have access.

Premium features: 

– Users can earn UKG tokens by playing and winning video games on community servers. 

– User wallets will allow premium members to transact faster without additional fees.

– Users can tip eSports professionals using UKG.

It should be noted that Unikrn will still continue their fiat betting operations after the introduction of UKG tokens in jurisdictions where this is legal.

Interview of Rahul Sood, CEO of Unikrn (video is 1:23:33 long):

How advanced is the project?

Unikrn was started in November 2014. In 2015, the company raised $10 million from investors including Ashton Kutcher, Guy O’Seary, Mark Cuban, Shari Redstone, Elisabeth Murdoch, 500 Startups, Tabcorp (Australia’s largest betting company), Indicator Ventures and Hyperspeed Ventures.

Following the introduction of UKG token, Unikrn will begin expanding beyond Australia and UK, such as the US and other markets in the world where skill-based betting is legal. Unikrn also plans to allow third party betting operators to license its platform and utilize UKG tokens.

Unikrn has a large presence in the eSports community and has a working platform. It engages in numerous eSports-related activities including creating content for the community, running tournaments, and owning a significant stake in one of the best CS:GO teams in the world, BIG

It operates Leet, which has a series of contracts with casinos around North America to setup eSports experiences on their properties. Unikrn also owns a stake in Maingear Computers, a company that will eventually play a role on premise in casinos.

In an interview, the CEO of Unikrn stated that Unikrn has over 4 million monthly active users and around 90,000 users who have placed bets on the platform.

Future roadmap of the project is detailed below.

By November 2017

  • Players bet UnikoinGold on themselves in competitive matches.
  • Use UnikoinGold to enter high-value jackpot and skin jackpot rooms.
  • Earn UnikoinSilver for connecting game accounts.
  • Earn UnikoinSilver by competing against other players.
  • Use and earn UnikoinSilver in live betting, pre-betting, raffles, and skin jackpots.
  • Access to UnikoinGold premium content that includes insights, statistics, and Scorecentre IO with widgets.
  • White label third party betting products.
  • Betting bonuses, access to live and pre-match sportsbook wagering, and the ability to enter premium subscriber jackpot and skin jackpot rooms.
  • Full gamification of the crypto platform with leaderboards and an ELO ranking system.
  • Other anticipated offerings: bingo, casino games, cards, donations, and tournaments.

What are the tokens used for and how can token holders make money?

Below are the main utilities that Unikrn is working to make available to UKG token holders:

  • Placing bets for professional eSports matches on Unikrn’s sportsbook.
  • Ability to play for UKG in competitive skill-based video game matches.
  • Tournament hosting.
  • Rewards for hosting skill-based gaming servers using Unikrn’s API.
  • Wagering on spectator engagement applications.

As UKG tokens are used to perform various actions on the platform, the more usage the Unikrn platform has, the more valuable UKG tokens should be.

It should be noted that 15% of total tokens are going to be used as Unikrn betting reserve. The reserve will act as a price stabilization tool. If UKG price increases rapidly, Unikrn can release more tokens to balance out the supply and demand, which would stabilize token prices.

Team

Unikrn currently has a core management team of 8 people. The co-founders are both serial entrepreneurs with extensive experience in the video and PC gaming industry.

Rahul Sood, Co-Founder and CEO – Serial entrepreneur. Rahul worked at Microsoft for 6 years where he launched Microsoft Ventures in 2013. Prior to joining Microsoft, he founded Voodoo, a gaming computer manufacturer, which was later acquired by HP. He has been an advisor to the Board of Directors for the gaming company Razer since 2013.

Karl Flores, Co-Founder and CPO/CMO – Serial entrepreneur. Karl was previously the CEO and co-founder of Pinion, a game community platform which was later acquired by Unikrn in 2014. He also has prior experience in multiple roles in operations and management.

Daniel Rudolph, CTO – Created PlayAll, a skill betting platform for video games. David has over 25 years of IT experience and has prior experience in a CTO role for multiple companies in Germany and France.

Unikrn’s advisory team includes Erick Miller, CEO of CoinCircle, a new token sale platform, and Shane Fontaine, Lead Crypto Engineer at CoinCircle. CoinCircle is a new token sale platform and will be helping to set up the initial token sale for UnikoinGold.

Opportunities

  • Very solid team with the co-founders having deep expertise in the gaming industry.
  • Unikrn has already gone through the due diligence process of a number of investors and received their backing. Investors who invested in Unikrn in its Series A include: Advancit Capital (Shari Redstone), Binary Capital, Mark Cuban Companies (Mark Cuban), Freeland Ventures (Elisabeth Murdoch), Sound Ventures (Ashton Kutcher, Guy O’Seary), 500 Startups, Tabcorp Inc. and Hyberspeed Ventures (Erick Miller).
  • Unlike most of the other eSports betting platforms, Unikrn’s betting platform is tightly integrated with the gaming experience. For example, you don’t need to go to a separate site to wager your bets. Betting and other interactions with the game all happen on the same place.
  • Because of the above, Unikrn probably caters more to casual gamers / spectators. Not only can users win UKG tokens, they can also win in-game items such as skins, gaming gear, etc., increasing the use cases for UKG tokens.
  • The eSports industry is growing rapidly and eSports wagering should follow suit. Unikrn stands to benefit from this trend. According to research from Eilers & Krejcik, gaming projects that regulated sportsbook-style wagering on eSports matches will reach $20 billion by 2020.
  • Unikrn’s target users (mostly young male) should be receptive to cryptocurrency and keen to try out UKG tokens. 
  • There are not many direct competitors to Unikrn in the blockchain space. Gimli is the only project that also focuses on eSports betting, but Unikrn is at a much more advanced stage.

Concerns

  • ICO participants represent 20% of total supply of tokens, meaning that the market cap on a fully diluted basis is $500 million if hard cap is reached. That is a very high valuation for an ICO project.
  • Because of the growth in eSports, Unikrn faces stiff competition from both traditional online betting companies and startups focusing on eSports. We have looked at numerous pages suggesting the best sites for eSports betting (source 1, source 2, source 3, source 4, and source 5, and Unikrn does not show up on any of the rankings.
  • Unikrn is probably going to have a hard time getting other third party betting operators to adopt UKG tokens.
  • Regulations would hinder the speed of Unikrn expanding from country to country.
  • Unikrn will be releasing tokens that are in reserve in order to stabilize token price, which may limit the upside of the tokens.

Conclusion

Overall, we are neutral about this ICO for its flipping potential but like its long-term potential. Our thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Neutral. The project is very hyped up – this is the first ICO that Mark Cuban is involved in. However, hard cap of $100 million is very high.

The amount of contribution depends heavily on the market environment, which is pretty unpredictable now that the Metropolis upgrade for Ethereum is coming soon.

For long-term holding

Good. Unikrn has a large presence in the eSports scene and is the prime candidate to benefit from the rapidly growing eSports industry. We believe the introduction of UKG tokens would attract crypto investors to try out the platform as they fit the target demography of Unikrn (mostly young male).

If Unikrn becomes successful, it has the potential to become the go-to place for eSports betting and spectating, which is a huge industry in the long-term.

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Analysis of ICON ICO – Blockchain Designed for Real World Use

Analysis of ICON ICO – Blockchain Designed for Real World Use

Summary

  • Project name: ICON
  • Token symbol: ICX
  • Website: https://icon.foundation/en/
  • Whitepaper: http://docs.icon.foundation/ICON-Whitepaper-EN-Draft.pdf
  • Hard cap: 150,000 ETH (ICO contributors own 50% of total token supply if hard cap is reached)
  • Conversion rate: 1 ETH = 2,500 ICX
  • Maximum market cap at ICO on a fully diluted basis: US$78 million assuming current ETH price of $260
  • Bonus structure: None
  • Presale or white list: Pre-sale from Sept. 20 – 22: ETH 30 or less / Sept. 25 – 27: ETH 100 or less / Sept. 29 – Oct. 12: ETH 1,000 or less (register on their website to sign up for presale)
  • ERC20 token: Yes
  • Crowdsale date: Presale from September 20, 2017 and public crowdsale from October 20 (please refer to ICON’s website for the most up-to-date information)
  • Token distribution date: Tokens are distributed after contribution but tradable in Q4 2017

Project Overview

What does the company/project do?

The ICON Project aims to connect all the activities in a country through its own blockchain. It is creating an open source ecosystem that allows organizations like government departments, universities, hospitals, and financial institutions to interact without third-party networks that charge transaction fees or delay the process.

ICON’s vision is to allow people to use ICX to pay for products and services directly to organizations that partner with the ICON Network. ICX will essentially be the currency that can be used in the real world for various products and services.

There are several key elements of ICON Network:

  • A smart contract platform named SCORE.
  • A consensus algorithm named Loopchain Fault Tolerance or LFT – ability to process large amount of transactions in real time.
  • Multi-channel – transactions can be taken place on a channel basis by configuring separate channels for each task on a single blockchain network.
  • Modular architecture – each module can be customized to ensure its high scalability.
  • Delegated proof of stake consensus algorithm – community representatives (for example, a company in the insurance community) are incentivized for the activities generated within the community.
  • Inflation – set at a maximum of 20% per year.
  • Interchain – different blockchains can be connected with the ICON Network.

Here is an introduction video of ICON (video is 2:10 long):

How advanced is the project?

ICON is a project developed by a Korean company named theloop. The engineering team of theloop began its research and development from June 2015.

theloop is a joint venture formed between DAYLI and 3 Korean universities. theloop’s parent company, DAYLI Financial Group, raised over $100 million from venture capital firms with a valuation of $4 billion.

theloop is leading four blockchain consortiums including the Korea Financial Investment Blockchain Consortium, the largest blockchain consortium in Korea and one of the largest of its kind in the world, consisting of 25 securities firms including Samsung Securities, Hana Financial Group, Korea Investment & Securities, etc.

theloop has been working with different organizations on various projects, some of which are listed below:

  • Completed a KYC/AML authentication smart contract platform for Korea Financial Investment Consortium.
  • Creating an insurance claims automation platform for Korea Healthcare Consortium.
  • Creating a digital currency payment system for Korea University Consortium.
  • Completed a proof-of-concept for an equity crowdfunding platform for YINC.

Below is the future roadmap of the ICON project:

Q4 2017

  • Financial Investment Consortium: Blockchain ID service open
  • U-Coin pilot service open: 3 Universities
  • Nexus Mainnet launch
  • DEX (Ethereum/ICX) launch
  • Wallet Web/iOS/Android
  • Public channel open
  • A.I. advisor launch
  • Expansion of DEX reserve pool to most of major cryptocurrencies

What are the tokens used for and how can token holders make money?

ICX is the currency for the ICON blockchain, similar to how Ether is for Ethereum. ICX tokens can also be used for the generation of other tokens within ICON. Since ICON also allows interchain communications, ICX is needed to transfer from one blockchain to another.

As ICX is needed to perform various actions on ICON, the more usage ICON has, the more valuable ICX tokens should be.

Team

theloop has 11 fulltime employees. Its parent company, DAYLI Intelligence, had 148 employees as of May 2017.

The bios of the core members of the team are listed below:

Jonghyup Kim, Foundation Council – 18 years of experience, previously Engineer at BT Works and Jang Media Interactive.

KJ Eee, Foundation Council – Majored in computer science and engineering at POSTECH University and developed ‘SUHOSHIN’, the first firewall in Korea. He founded Nomad Connection and has gained 3 million users through P2P Media Service Zimly. Currently, he is the CEO of DAYLI Intelligence.

ICON also has a strong team of advisors, including Don Tapscott, co-founder of the Blockchain Research Institute, Jason Best, co-founder of Crowdfund Capital Advisors, Jehan Chu, Managing Partner of Kenetic Capital.

Opportunities

  • The company is started by a Korean FinTech startup that is valued at $4 billion. It is now established as the market leader in Korea with the largest blockchain network, with over 40 organizations in the financial services, insurance, education, and hospital space.
  • The project has been under development for over 2 years and has real world applications. The first production blockchain service, a KYC authentication platform, was launched in August 2017 with 25 securities firms.
  • An experienced team is running the project. DAYLI Intelligence has over 100 employees and most of whom has contributed to the project in some way.
  • Coinone, one of the top 10 exchanges globally, is most likely going to list ICX as Coinone and ICON are owned by the same company. This is going to provide ample liquidity for ICX.
  • The interchain capability makes ICON a blockchain agnostic platform. It can benefit regardless of which blockchain becomes the dominant platform in the future

Concerns

  • It is uncertain whether ICX tokens will be tradable before migrating to its own blockchain (which is estimated to happen in November 2017). Therefore, it has a longer lock-up period than most other ICO projects.
  • ICON may face difficulty expanding outside of Korea due to language and culture barrier.
  • There are uncertainties around the regulatory environment for Korea regarding ICOs. If ICOs are not allowed in Korea, it would somewhat limit the use case for ICON.
  • The maximum inflation of 20% is quite high and dilutive to ICO participants.

Conclusion

Overall, we are neutral about this ICO for flipping but like its long-term potential. Our thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Neutral. The upside potential is great and the ICO should have no problem reaching the hard cap given market response, but ICX tokens will not be tradable until Q4 2017, which is longer than most of the other ICOs.

For long-term holding

Good. The ICON project is one of the most advanced ICO projects out there, with an established technology and strong partnerships with various large enterprises and government affiliates. 

We believe ICON can be a strong competitor to other blockchains like QTUM and NEO, which currently have a market cap between $500 million to $1 billion. Therefore, ICX has strong upside potential.

For more information about the ICO, please visit the following links:

Website: https://icon.foundation/en/ 

Whitepaper: http://docs.icon.foundation/ICON-Whitepaper-EN-Draft.pdf 

ICON blog: https://medium.com/@helloiconworld 

Github: https://github.com/theloopkr/loopchain

Interview of ICON co-founder Min Kim by Bitsize Bitcoin (video is 38:10 long):

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Analysis of AirToken ICO – Mobile Accessibility Using Advertising and Microloans

Analysis of AirToken ICO – Mobile Accessibility Using Advertising and Microloans

Summary

  • Project name: AirFox / AirToken
  • Token symbol: AIR
  • Website: https://airtoken.com/
  • Whitepaper: https://airtoken.com/paper/AirFoxICO_WhitePaper_v3.0.pdf
  • Hard cap: US$21 million (ICO contributors own 70% of total token supply if hard cap is reached)
  • Conversion rate: Total supply of AIR is 1.5 billion
  • Maximum market cap at ICO on a fully diluted basis: US$30 million
  • Bonus structure: First $0 – $2m – 30% / $2m – $4m – 20% / $4m – $8m – 10%
  • Presale or white list: White list available at Airtoken website. If you want to purchase in the public crowdsale you need to participate in the whitelist. For more details, please refer to this blog post. 
  • ERC20 token: Yes
  • Crowdsale date: There is no public crowdsale, participants need to be whitelisted which starts on September 14th at 14:00 UTC (please refer to AirFox’s website for the most up-to-date information)
  • Token distribution date: Tokens will be distributed 2-6 weeks after the end of crowdsale

Video summary (video is 8:49 long):

Project Overview

What does the company/project do?

AirFox was founded in 2015 as part of Harvard University’s Innovation Lab with the goal of providing mobile affordability to the underserved, low-income consumer who is restrained by the cost of mobile data.

AirFox currently has two free Android apps that integrate with AIR tokens. The AirTokens used in the current apps are worth 1/100 of the AirToken purchased from the ICO and will be included in the 30% tokens in the AirFox Reserve.

  • AirFox Browser: A mobile browser that blocks outside ads and trackers. Users can earn AIR tokens by opting in to AirFox ads. 
  • AirFox Recharge: Users can opt to view ads and complete offers (e.g. complete surveys, watch videos, install apps, etc.) to earn AIR. Users can also purchase AIR directly using local currency. This app will eventually be able to grant microloans of AIR to users.

Screenshots of the AirFox Browser available for Android:

AirFox Apps

It looks like the two apps were taken off the shelf and recently added back on Google Play. As a result, we were not able to find the download and popularity statistics from third party analytics.

Benefits for users:

  • More affordable and accessible mobile internet.
  • Can get access to mobile capital via P2P micro-loans in the form of AIR. Lender will receive back AIR and interest.

Benefits for wireless carriers:

  • Can monetize low ARPU subscribers (i.e. prepaid users which have 1/8th of the ARPU of post-paid users) and get them to use more data. This could help them maximize their revenue per user.

Benefits for advertisers:

  • Improved ROI, fewer intermediaries, better data targeting and less fraud.
  • Expand reach to lower income users.
  • Can target and reach unbanked prepaid subscribers.
  • Can directly sponsor all or a segment of users with AIR tokens for opt-in, attention, or engagement.
  • Improved monetization, user reach, and user experience.
  • Can use the AIR tokens reward, micro-loan, and advertising system for higher user output.
  • Can offer in-app purchases, digital products, and physical products as a microloan.
  • Users can easily buy their services using AIR tokens.
  • Advertising-based publishers can reward active users with AIR tokens.

AirFox will initially focus on Brazil and the surrounding Latin American countries, and eventually expand to other countries globally.

Here is an introduction video for AirToken (video is 3:25 long):

How advanced is the project?

Incubated at Harvard’s Innovation Lab, AirFox is a TechStars Boston alum and is venture backed by venture funds and other angel investors. According to Crunchbase, AirFox has raised $1.2 million in 2 rounds.

Since inception in 2016, AirFox has generated $600,000 of revenue in the first 10 months, delivered over 1 billion impressions. 

AirFox’s business-to-business platform has enabled more than 2 million unique United States prepaid wireless subscribers to reduce their mobile costs. Here is a spreadsheet showing carrier coverage (a CSV file).

Below is AirFox’s product / mobile applications roadmap. For more information, please refer to their whitepaper.

Phase I – August 1, 2017

  • Users can earn free AIR via ads in the AirFox Browser and/or Recharge apps.
  • Users can use the AirFox browser to access the internet faster and more data efficiently.
  • Users can use tokens to redeem mobile data and send it to themselves or to other users over 500 wireless carriers (5 billion prepaid SIM cards).
  • Qualified active users can redeem micro-loans of AIR by collateralizing their prepaid account (based on an internal credit scoring system).
  • Use of AIR is expanded to other items outside of mobile recharges. 
  • Users can redeem micro-loans of AIR for physical and digital products.
  • Use of AIR and advertising / microloan blockchain system is expanded to external applications and across a direct network of publishers and advertisers. 
  • Publishers and advertisers can reward users with AIR via advertising moments and use the micro-loans system to enable capital for in-app purchases.

What are the tokens used for and how can token holders make money?

Users will receive AIR rewards for opt-in advertising and micro-loans of AIR based on the internal AirFox user credit-score. Users can redeem AIR tokens for mobile data recharges across prepaid carriers around the world, and eventually physical and digital products, across publishers and advertisers.

Advertisers can directly sponsor all or a segment of users with AIR tokens for opt-in, attention, or engagement.

To ensure the AirFox ecosystem is actually useful, the platform needs a large number of advertisers and users. The more advertisers and users on the AirFox platform, the more valuable AIR tokens should be.

The picture below shows the flow of AIR tokens:

Flowchart for Air Tokens

Team

AirFox was founded in 2015 in Boston. The management team is currently comprised of 6 members.

Victor Santos, Co-Founder & CEO – Previously the co-founder and COO of Ciao Telecom, a platform for VoIP entrepreneurs and an advertising-based mobile virtual network operator. Prior to that role, he worked at Google for two years as a Product Marketing Manager and at iWorld Services for two years as a Business Development Manager.

Sara Choi, Co-Founder & COO – Previously the Head of Product at Ciao Telecom and worked at Google for three years (in marketing) and at YouTube for one year (in operations). She graduated with a BA degree in Biology from Harvard University.

James Seibel, CTO – James was previously a software architect at Lola Travel (founded by the co-founder of Kayak) and was the Head of Engineering at Apperian (acquired by Arxan Tech). He obtained his MS and BA degrees in Computer Science at Boston University.

AirFox is backed by various investors, including TechStars, Project 11, NXT Ventures, Launch Capital, RightSide Capital and other investors in Boston. Their advisors include Jennifer Lum, co-founder of Forge.AI and Adelphic Mobile, Semyon Dukach, Managing at One Way Ventures, and Amy Spurling, ex-COO and CFO at Jana.

Opportunities

  • AirFox is a revenue-generating company since 2016 with VC funding, making this ICO more established and less risky than most of the other projects.
  • AirFox’s services are proved to have real world demand. Over 2016, AirFox enabled more than 2 million unique prepaid wireless subscribers in the US. AirFox also delivered over 1 billion impressions to advertisers, helping them reach a lower income audience.
  • The team is solid with good credentials.
  • The space for microlending for the unbanked is very large and AIR token’s upside can be substantial if the project succeeds.

Concerns

  • We couldn’t verify the usage of the two AirFox apps on Google Play as they were re-added on the platform recently. On this page, it shows that the app only has 10-50 installs.
  • AirFox’s ads are probably not going to be as relevant as those provided natively (e.g. from Google) because Google and other advertising platforms can use trackers to provide better targeting to users. Hence, advertisers may not be as keen to publish ads on AirFox and may pay a lower ad rates compared to other platforms.
  • The microlending feature, which is a large part of AirFox’s vision, is not proven and it is uncertainty whether it will gain traction after the rollout. 

Conclusion

Overall, we like the ICO’s flipping potential but are neutral about its long-term potential. Our thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Good. This project has a relatively low hard cap with $6.5 million sold in presale already. It should have no problem filling the hard cap even in this uncertain market environment. Note that early participants can obtain a higher bonus, further increasing the potential upside.

However, note that the token distribution timing depends on (1) how quickly the hard cap is reached from the whitelisted participants, and (2) how long it takes to distribute AIR tokens after the end of the crowdsale (this blog post says it should be 2-6 weeks after ICO).

For long-term holding

Neutral. As mentioned in the “Concerns” section, the microlending feature, which is a large part of AirFox’s vision, is not proven and it is uncertainty whether it will gain traction after the rollout.

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Analysis of Change Bank ICO – Crypto Bank for Borderless Finance

Analysis of Change Bank ICO – Crypto Bank for Borderless Finance

Summary

  • Project name: Change Bank
  • Token symbol: CAG
  • Website: https://change-bank.com/ 
  • Whitepaper: https://drive.google.com/file/d/0B4RKXcemFwwbNW5wVGtBMWM0c2s/view
  • Hard cap: 200,000 ETH (ICO contributors own 40% of total token supply if hard cap is reached)
  • Conversion rate: 1 ETH = 500 CAG
  • Maximum market cap at ICO on a fully diluted basis: US$150 million if hard cap is reached assuming current ETH price of $300
  • Bonus structure: Pre-sale – 25% / first 24hrs – 20% / 1st week – 15% / 2nd week – 10%
  • Presale or white list: Presale ongoing 
  • ERC20 token: Yes
  • Crowdsale date: September 16, 2017 (please refer to Change’s website for most up-to-date information)
  • Token distribution date: Tokens will be distributed immediately after contribution and tradable after the end of ICO

See our video summary (video is 8:15 long):

Project Overview

What does the company/project do?

Change aims to be a full-service crypto bank, offering payments with cryptocurrencies as well as a fully integrated marketplace of FinTechs.

Change plans to develop several products:

Crypto wallet – facilitates the storage of all major cryptocurrencies, easy management of crypto portfolios, simple transfers of funds between peers, and other functionalities.

Change Card – a crypto debit card which allows users to spend their cryptocurrencies in online and offline locations worldwide.

Marketplace – an all-in-one platform for financial services. Users can use their cryptocurrency to invest in stocks, P2P loans, real estate, buy travel or car insurance or take a loan in cryptocurrency.

Change is also involved in the e-Residency initiative by the government of Estonia. e-Residency gives users a digital identity in the European Union – this can be used to start a company, open a bank account, file taxes, sign documents, etc. without physically being in the EU.

Change intro video (video is 1:28 long): 

How advanced is the project?

Change was founded in early 2016 in Singapore. It has received backings from angel investors with over USD 200,000 in early investment. Afterwards, other FinTech startups in the region also joined Change.

The beta was released in Q2 2017. The mobile app allows storing, spending and moving fiat currency, as well as integrating APIs with Smartly and Danabijak, startups founded by Change partners.

By 2018, Change is scheduled to launch a global FinTech marketplace, which allows users to browse and purchase all kinds of financial services using cryptocurrency.

What are the tokens used for and how can token holders make money?

There are several uses of CAG tokens.

Using the marketplace

  • Third-Party Service Providers (TPSPs) share 20% of their revenues generated from Change users with Change. This 20% is distributed between Marketplace investors and holders of Change coin in a 1:5 ratio. With 16.67% going to marketplace investors and 83.33% being distributed to CAG holders.

Change card

  • 0.5% of all payments volume will be distributed to CAG holders.

Currency for TPSP

  • CAG will be the facilitator of any transactions other than spending (excluding the temporary period in the beginning where other cryptocurrencies are enabled).

As CAG tokens are used (1) as a currency on the Change platform, (2) to receive a portion of income from purchases from the TPSP, and (3) to receive a portion of transaction volume from Change Card, the more usage the Change platform has, the more valuable CAG tokens should be.

Team

Change has a team of 10, with most of the core members worked/working at other FinTech startups.

Bios of the core members are listed below:

Kristjan Kangro, CEO – Serial entrepreneur. Previously CFO of Expara and CEO of SwingBy.

Artur Luhaaar, Partner – Serial entrepreneur. Current CEO of Smartly and former analyst at an investment firm.

Gustav Liblik, Partner – Serial entrepreneur. Current CEO of Catapult, former CEO of Wastescanner.

Edgars Simanovskis, CTO – Also the current CTO of Danabijak. Previously an iOS developer for various companies.

Change has a strong team of advisors, including Roger Crook, ex-CEO of DHL Global Forwarding, Rob Findlay, Founder of Next Money, and Miguel Soriano, Professor at the National University of Singapore.

Opportunities

  • Change has a strong team with experience working in Fintech companies. It also has a number of legit advisors, including the former CEO of DHL Global Forwarding. 
  • Although it doesn’t benefit Change’s business directly, Change has an official partnership with a sovereign government, Estonia. This is going to provide validation to Change’s concept and put it steps ahead of many other blockchain projects.
  • Change has a very ambitious goal of providing pretty much all the services that a traditional bank provides. If successful, the upside to the business and token value can be substantial. It also allows many financial services to be paid using cryptocurrency.

Concerns

  • Here is the description of Change on their FAQ page: “Change is a crypto bank offering a wide range of financial services including a bank card, investment opportunities on a global marketplace, cryptocurrencies, insurance and more.”
    • There’s probably a lot of local regulations that will apply, particularly in the insurance and investment space. This would slow down Change’s development.
    • Change has stated that regulations don’t apply to them because Change is merely aggregating a variety of FinTech companies (which are properly licensed themselves) into one marketplace. Also, if they were to obtain a banking license, it is only to add legitimacy and not vital to its business.
    • However, we believe regulations should still apply in many jurisdictions. For example, an insurance agent needs to be licensed to sell insurance products offered by different companies (which themselves are all properly licensed). For example, human resources startup Zenefits was penalized in several states in the United States because of insurance licensing violations.
    • If Change is only offering referrals, then they are acting like an affiliate which earns income by referring businesses. They may not be objective when it comes to the services that they refer. Users may be able to get a better rate elsewhere or by going directly to the referred companies themselves. Also, if Change is merely acting as an affiliate, they may not be able to accept payments from users directly, which is not consistent with Change’s business model.
  • Most members of the team are working on Change and other startups at the same time, meaning they are not working in Change fulltime. It is unclear how they are going to allocate their time between different ventures.
  • CAG tokens are not necessarily for purchases in the Change Marketplace, at least in the beginning. Users can use all major cryptocurrencies. This is going to reduce the need for CAG as a utility token.
  • Competition – there are a number of blockchain projects in similar space as Change
  • The roadmap is vague. In the white paper, the only milestone after ICO is “delivery of first Change crypto cards; beta for marketplace launched”. This may indicate the lack of detailed planning for the team in terms of the execution and carrying out the game plan for the project.

Conclusion

Overall, we are neutral about both the ICO’s flipping and long-term potential. Our thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Neutral. On one hand, the project has good awareness with the partnership with the Estonia government and strong team of advisors. 

On the other hand, presale is stalled at around 30,000 ETH. With a minimum contribution amount of just 10 ETH, there is not much to prevent small contributors from participating, so the pre-sale is essentially a public crowdsale. It seems to us that the project doesn’t have enough demand to fill the hard cap, especially in this market environment. 

However, the crypto market can change very quickly and given the 1-month crowdsale period, Change has plenty of time to raise funding, hence the neutral rating.

For long-term holding

Neutral. We believe the team underestimates the challenges with legal and regulatory issues. With the lack of details in the white paper, we are unsure of the execution abilities of the team.

What’s likely going to happen is that Change will realize there are a lot more legal hurdles than they initially thought. They will need to expand slowly, country by country after getting all the relevant licenses in each jurisdiction. Therefore, it may take a long time to realize the team’s vision.

Change also has a very ambitious goal of providing many different kinds of services under one umbrella. Generally, the more ambitious goal a project has, the more likely it will fail. Therefore, we believe Change is more of a high-risk high-return play.

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Crush Crypto Weekly – September 9, 2017

Crush Crypto Weekly – September 9, 2017

The biggest news this week was definitely China’s ICO ban. On Monday, the Chinese government ordered the suspension of all ICOs conducted by Chinese companies to put an end to ICO scams in China’s unregulated ICO market.

The ban affects all Chinese companies conducting ICOs and managing ICO fundraising platforms in China. Interestingly, the ban does not stop Chinese citizens from participating in foreign ICOs. The official notice only mentions that “the public needs to stay aware of the risks of coin offering fundraising and trading”.

The news created a lot of FUD (fear, uncertainty, and doubt) in the crypto market. As a result, Bitcoin prices dropped 8% to around $4,300 while Ether prices dropped 16% to around $300 from the previous week. Cryptocurrencies originating from China were hit particularly hard. NEO, for example, tumbled 28% from the previous week to around $23.

Amid all the fear, we need to put things in perspective. China has tried to restrict cryptocurrencies before. This is not something new and yet cryptocurrencies have been able to bounce back every time after a China crackdown.

Moreover, the Chinese government’s concerns do have its merits. In the last few weeks before the Chinese ICO ban, more and more people were asking for our opinion in Chinese ICOs because they were hot. This was an indication that people were getting greedier and were willing to invest in things that they were not familiar with.

Having worked in Asia for several years, I know there are a lot of scams out there and that is why I have largely avoided reviewing Chinese ICOs. The only Chinese ICO I was comfortable enough to write about and recommend was Red Pulse.

There’s a lot of speculation going on right now but no one really knows what the Chinese government will do. It’s always good to think about the worst case scenario, which we believe would be China banning cryptocurrency trading entirely.

But keep this in mind – China was not able to do that when the cryptocurrency market was much smaller so we think it would be hard for them to enforce a ban effectively now when the market has grown substantially. It is also a lot more difficult to ban decentralized vehicles like cryptocurrency.

Facebook and Google are also banned from China and they are doing just fine. The fact that China has decided to ban ICOs indicates to me that it is a legitimate thing that China is worried about, and not just a fad.

Having considered the above, I personally would not worry too much now. If you have a heavy exposure in Chinese cryptocurrencies, you may want to consider adjusting your portfolio to reduce your overall risk profile.

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Analysis of Kyber ICO – Decentralized Exchange for Instant Trading

Analysis of Kyber ICO – Decentralized Exchange for Instant Trading

Summary

  • Project name: Kyber Network
  • Token symbol: KNC
  • Website: https://kyber.network/
  • Whitepaper: https://kyber.network/assets/KyberNetworkWhitepaper.pdf
  • Hard cap: 200,000 ETH (ICO contributors own 61.06% of total token supply if hard cap is reached)
  • Soft Cap: None
  • Conversion rate: 1 ETH = 600 KNC
  • Maximum market cap at ICO on a fully diluted basis: US$102 million if hard cap is reached (assuming current ETH price of $310)
  • Bonus structure: None
  • Pre-sale / white list available: Sign up for the white list is over
  • ERC20 token: Yes
  • Timeline: September 15, 2017 (please refer to Kyber’s website for the most up-to-date information)
  • Token distribution date: Tradable 1 week after the token sale (September 24, 2017)

Project Overview

What does the company/project do?

Kyber Network is a new decentralized exchange that allows for instant trading and conversion of cryptocurrency. It has the following key properties:

  • Trustless: All transactions occur via smart contracts and no funds are held on the exchange.
  • Liquid: They will utilize a network of reserve operators, who will maintain a reserve of all tokens to provide liquidity for transactions.
  • Instantaneous: Kyber claims that it will have no waiting time for confirmations and no deposits will be required. Users can get their tokens as soon as the transaction is put on the blockchain.
  • Locked-in conversion rate: Users will know the conversion rate before sending the transaction and receive the corresponding amount.

Below is a flowchart showing how KyberNetwork works.

Kyber Network flowchart

Primary uses of KyberNetwork include:

  • Exchange: Convert and exchange tokens securely and instantly. At the moment, KyberNetwork does not collect any fees from the users’ exchange transactions.
  • Proxy payments: Users can pay anyone in any token with their own tokens. Kyber performs the conversion and forwards the payment.
  • Derivatives: Users can hedge against price fluctuations by engaging in forward transactions.
  • Cross-chain payments: For example, users can receive payments in Bitcoin and other cryptocurrencies in Ether.

KyberNetwork does everything on-chain because off-chain channels do not provide settlement guarantee, relies on trusted third parties and has low compatibility with Ethereum smart contracts.

KyberNetwork can provide instant liquidity because they have a reserve system. Initially, Kyber will be the sole reserve manager to ensure they have the tokens available when users request an exchange. Over time, anyone can become a reserve manager, provide liquidity and earn income from the role.

Here is Kyber’s intro video (video is 2:23 long)

How advanced is the project?

Kyber released the MVP on Testnet in August 2017, which included the main KyberNetwork contracts, a user web-wallet and the reserve dashboard for reserve managers. You can check out the MVP here. 

The future roadmap for Kyber is listed below:

  • Q1 2018: First mainnet launch, support trading between tokens and ETH.
  • Q2 2018: Support trading arbitrary token pairs.
  • Q3 2018: Support trading advanced financial instruments.
  • Early 2019: Support cross-chain trading.

Here is a video demo of the MVP (video is 2:16 long):

What are the tokens used for and how can token holders make money?

KNC tokens have two primary uses.

KNC tokens are required for reserves to participate in the network and to reward various parties who will help generate more trading activities in the platform. Before operating, KyberNetwork reserves need to pre-purchase and store KNC tokens. In every trade, a small fraction of the trade volume will be paid by the reserve to KyberNetwork platform in KNC.

The collected KNC tokens from the fees, after paying to the supporting partners, will be burned, i.e. taken out of circulation. The burning of tokens could potentially increase the appreciation of the remaining KNC tokens as the total supply in circulation reduces.

The value of KNC will be mostly derived from the second use – profits to be used to buyback KNC tokens and taken out of circulation. This acts like a share buyback in the stock market.

It can cause the token value to appreciate even if the project itself does not appreciate in value. For example, even if the market cap of Kyber stays the same, because profits are used to buy back tokens, the number of KNC tokens in circulation will decrease. Token holders will own a larger piece of the project, causing token value to appreciate.

As the value of KNC tokens hinges on how much profit KyberNetwork can generate, the more volume and profit the network generates, the more valuable KNC tokens should be.

Kyber vs. 0x

Kyber and 0x are both high-profile ICOs that tackle similar problems, so we dedicate this section to do a comparison between Kyber and 0x. You can read our analysis on 0x here.

Areas where Kyber is better:

  • Kyber’s idea, if implemented successfully, would create a better product than 0x. The features not available from 0x are listed below.
  • Guarantee liquidity: Users can always find a counterparty to settle their trades so they don’t need to worry about not being able to trade their cryptocurrency, no matter how illiquid the tokens are.
  • Instant transfer: Once users enter into a trade, they can receive the token that are being exchanged instantly. With the 0x protocol, unless you are the taker of the trade, you don’t know how long it takes until another party takes your order.
  • Kyber lets you pay a merchant with any tokens and the merchant would receive another cryptocurrency (for example, Ether) in return, eliminating the need to convert your tokens back to a more popular cryptocurrency before paying the merchant.

Areas where 0x is better:

  • 0x has first mover advantage with many dApps and relayers using 0x as part of the component. Projects that partners with 0x include Ethfinex, Augur, District0x, Status, among others. You can see the list of dApps and relayers that adopt the 0x protocol.
  • Ethfinex is probably going to be the first functioning decentralized exchange that is actually good and widely used because its creator, Bitfinex, has extensive experience running one of the largest cryptocurrency exchanges in the world. This is just one of the relayers built on top of 0x, demonstrating the potential of the 0x project. 
  • Kyber is an exchange while 0x is a protocol where other dApps can use it as a component. All else equal, protocols are more valuable because different projects can be built on top of it.
  • Since both Kyber and the reserve operators need to make a profit, we imagine that the fees charged by Kyber (i.e. the bid/ask spread) would be higher than existing exchanges.

Having compared the two projects, Kyber is actually more similar to ShapeShift than 0x. Kyber is like a decentralized version of ShapeShift. ShapeShift charges higher fees than most exchanges because they take on the risk of being a market maker. Same thing goes for Kyber.

At the end of the day, we believe it all depends on the fees that Kyber will charge (in the form of bid/ask spread). If Kyber can match or get close to the fee level that 0x relayers charge, then Kyber is better than 0x because of the guaranteed liquidity and instant exchange features. However, if Kyber’s fees are much higher, then 0x is better than Kyber for most users.

Team

The team is currently comprised of 7 members. The three co-founders previously worked together at SmartPool, an open source project for the decentralization of mining pools in existing cryptocurrency which had Vitalik Buterin as an advisor.

Loi Luu, CEO & Co-Founder – Blockchain veteran who developed different projects in the past. He developed Oyente, the first open-source security analyzer for Ethereum smart contracts. He was a co-founder/developer of SmartPool, a decentralized mining pool project. Loi is a PhD candidate in Computer Science at National University of Singapore.

Yaron Velner, CTO & Co-Founder – Yaron holds a PhD in Computer Science from Tel Aviv University. He has over 10 years of experience in software engineering and was also a co-founder/developer of SmartPool.

Victor Tran, Lead Engineer & Co-Founder – Victor is a backend engineer and Linux system administrator with experience in developing infrastructure for social marketing and advertising networks. He co-founded and was the CTO for several start-ups in social marketing. He was also a developer at SmartPool.

Kyber Network is backed by strong advisors, including Vitalik Buterin (Founder and Chief Scientist of Ethereum), Prateek Saxena (research professor at National University of Singapore) and Leng Hoe Lon (CEO & co-founder of Shentilium Technologies, co-founder of TrackRecord Asia, CEO of Tudor Capital Singapore, and Managing Director of Goldman Sachs).

They are also partnered with a number of VC firms, including HyperChain Capital, BITSSET, Finden Capital, Pantera, Fenbushi Capital, Kenetic Capital, FBG Capital and Danhua Capital

Opportunities

  • The project’s idea is great and would push cryptocurrency as a whole forward. Instant exchange in a decentralized manner? Imagine how much better it would be compared to the exchanges that we are dealing with now.
  • The project has a strong team who worked together in another blockchain venture prior to starting Kyber.
  • Kyber is one of the two projects that Vitalik is an official advisor of, with the other being Omise GO. Omise GO is one of the most successful ICO this year and became the most valuable token after trading for just two months. It generated 37x return compared to Ether over the same period.
  • Kyber ICO has generated great awareness. Its Slack channel is the largest in the world with over 33,000 members. There are 38,000 white listed participants for the ICO, make Kyber one of the most anticipated ICOs of the year.
  • KNC token allows token holders to enjoy the profits made by Kyber in the form of token buyback. Because of this, KNC tokens have better value proposition than most other ICOs.

Concerns

  • The reserve system is pretty capital intensive. Guaranteeing liquidity for every tokens out there require reserve managers to hold a non-trivial amount of random illiquid tokens and it can tie up a lot of capital.
  • The final stage for Kyber, cross-chain trading, will take a few years, if ever, to realize as Polkadot and Cosmos will not be usable anytime soon.
  • Kyber is slower than 0x in terms of development. If relayers built on 0x protocol are successful, users may not want to switch to Kyber.

Conclusion

Overall, I like this ICO both for its flipping and long-term potential. My thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Good. Kyber is one of the most anticipated ICOs of the year with 38,000 white listed participants. Many of them would not be able to invest as much as they would like to, leaving plenty of unmet demand.

For long-term holding

Good. Kyber’s idea is great and has a good chance of success if executed corrected. ShapeShift is already a successful and fast-growing venture, and Kyber aims to be a better version of ShapeShift. The cryptocurrency trading industry is large and there can be multiple winners in this space.



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Analysis of Ambrosus ICO – Blockchain-Based Supply Chain Ecosystem

Analysis of Ambrosus ICO – Blockchain-Based Supply Chain Ecosystem

Summary

  • Project name: Ambrosus
  • Token symbol: AMB
  • Website: https://ambrosus.com/
  • Whitepaper: https://ambrosus.com/wp-content/uploads/2017/09/Ambrosus-White-Paper-V8-1.pdf
  • Hard cap: CHF 100 million (ICO contributors own 40% of total token supply if hard cap is reached)
  • Soft Cap: None
  • Conversion rate: 1 ETH = 1,000 AMB
  • Maximum market cap at ICO on a fully diluted basis: CHF 250 million if hard cap is reached
  • Bonus structure: 10% for contributions over 300 ETH / 20% for contributions over 1,600 ETH / 30% for contributions over 3,200 ETH
  • Pre-sale / white list available: Pre-sale ongoing through Bitcoin Suisse
  • ERC20 token: Yes
  • Timeline: September 13, 2017 (please refer to Ambrosus’ website for the most up-to-date information)
  • Token distribution date: After the end of ICO

Project Overview

What does the company/project do?

The Ambrosus network is a blockchain-based ecosystem for supply chains, ensuring the origin, quality, compliance and proper handling of items tracked by the network.

Ambrosus’ primary focus is on improving supply chains for life-essential products, specifically food and medicine, although the protocol can be applied to other supply chains.

There are different components to the Ambrosus ecosystem:

  • Sensor Systems – Hardware sensors that feature plug-and-play compatibility with Ambrosus’ blockchain network. The hardware products include a range of non-invasive and rapid analytical devices for on-site measurement of biological samples.
  • Blockchain protocol – Ambrosus is building its protocol on Ethereum that will self-execute based on quality and safety data generated by sensors.
  • Secure data storage – All process readings are immutably recorded in a decentralized manner, which protects from hacking, data manipulation and fraud.
  • Developer tools – There are developer tools and modules to allow community members to build distributed apps, extensions and protocol upgrades, creating valuable solutions for society, including consumers, farmers, pharmacies, distributors and business owners.

Here are a few of Ambrosus’ use cases:

  • Food origins and tracing: Suppliers and distributors sign-off the batches of products by linking their individual identity to the signatures. This allows precise attribution of responsibility for quality assurance and prevents fraud.
  • Logistic sustainable improvement: Combination of temperature sensor and surroundings sensors to assess any container unusual physical parameter variation and bad exposure. Measurements at the container level are performed and alarms are triggered, informing the logistics directly.
  • Food delivery without the middleman: Food orders with partner restaurants and cafes would be placed through the decentralized marketplace and customers would pay directly to the delivery people without the payment passing through the middleman.

Here is an introductory video of Ambrosus (video is 1:55 long):

How advanced is the project?

Ambrosus was founded in 2016 and launched publicly in July 2017. They have released a demo. Here is a short walk through video of the demo (video is 1:12 long):

They have detailed their future roadmap in a blog post. Key dates are listed below:

  • October 2017 – Release of Alpha-version of Supply Chain Management Protocol; Release of Proof-of-Concept for sensing system, edge and central gateways.
  • November 2017 – Release of Alpha-version of the quality-driven decentralized marketplace for food and commodities.
  • December 2017 – Release of an Alpha-version of decentralized commodities trading platform.
  • February 2018 – Launch of Alpha-version of large-scale decentralized storage solution for supply chain sensors.
  • March 2018 – Launch of a public Beta version of marketplace, exchange platform and product checker software integrated into Ethereum blockchain.
  • June 2018 – Release of the first generation sensor systems for Ambrosus (sensors, tags and tracers) combined with self-healing (mesh) network functionality.
  • Spring 2019 – Launch of the first Generation of Nano sensors and Biosensors

What are the tokens used for and how can token holders make money?

Amber is the native token of Ambrosus, used to help trace products through their value chain, linking the information gathered to the records about the batch.

The tokens are used to keep information on the Ambrosus network up to date as products move across the supply chain. Amber tokens are sent to the network alongside readings and remain locked in the Measurements Smart Contract until a batch has completed its movement through the supply chain.

Amber is also the fuel for the Ambrosus ecosystem, used to access the network services, interact with the sensor systems and to enter commercial agreements assured by smart contracts.

As Amber is used to perform different actions within the Ambrosus ecosystem, the more usage the Ambrosus platform has, the more valuable the Amber tokens should be.

Team

The team is comprised of 8 core members, with experience in the areas of sensor technology, data encryption, supply chains, blockchain, smart contracts and dApps.

Angel Versetti, CEO – Previously worked at the United Nations, World Resources Forum and Bloomberg.

Dr. Stefan Meyer, CTO – Previously led R&D projects at Nestle and other companies. He holds a PhD in Food Science (ultrasound applications in food industry) from the University of Leeds and MSc in Geosciences from the University of Lausanne.

Professor Jean-Paul Sandoz, Lead Engineer – Over 40 years of experience in seniors and microelectronics. He has served as Professors at the Engineering College of Le Locle and at the University of Applied Sciences of Western Switzerland for over 30 years.

The project is also backed by strong advisors including Dr. Gavin Wood (co-founder and ex-CTO of Ethereum), Dr. Jutta Steiner (co-founder of Parity and Grid Singularity), Dr. Vlad Trifa (founder of Web of Things and former Head of Digital Lab at Swisscom), Prof. Malcolm J W Povey (Professor of Food Physics at the University of Leeds), and Jehan Chu (Managing Partner of Kenetic Capital).

Opportunities

  • The project has an above-average team and all-star advisors, which would legitimize the project even when the company is publicly launched only three months ago.
  • Presale has raised around CHF 30 million already.
  • New regulations or more stringent requirements around the distribution of specialty goods, such as medicinal products could increase demand for supply chain QA. For example, a recent change under the EU regulation, Good Distribution Practice of Medicinal Products for Human Use, requires companies to report any deviations to the distributor and the recipient of the affected medicinal products

Concerns

  • Food sensor and tracking is very common and lots of companies are doing it already. Ambrosus faces stiff competition in the traditional space, such as GlobeRanger, Oceansoft, and Blue Maestro, as well as in the blockchain space from Modum.
    • Modum has a blockchain-based temperature tracking system for medicinal products, with sensors that record environmental conditions during shipments. When goods change ownership, the data is checked against Ethereum smart contracts to validate the transaction and triggers alerts, payments, etc.
    • Modum already has a working product with 43 registered companies and 844 shipments, which is more advanced than Ambrosus.
    • They were featured on Nasdaq, World Economic Forum, among others, and have won several awards including Kickstarter Accelerator 2016.
    • Their token sale started on September 1, 2017 and their hard cap is $16.4 million – 16% of what Ambrosus is asking.
    • When asked about the difference between Ambrosus and Modum, Ambrosus keeps mentioning that they are creating a blockchain and Modum is not. However, is it necessary?
  • The project is launched only three months ago based on the LinkedIn profiles of the CEO and CTO. We feel like this project receives the attention it has solely because of Gavin Wood and other advisors. We don’t even see a picture of the hardware – the component that is essential to the Ambrosus platform.
  • We believe Ambrosus is an average business idea, one that is difficult for the company to gain a substantial competitive advantage over other competitors and gobble up market share.
  • Seems like the only advantage Ambrosus has over existing competitors is that data on the Ambrosus platform is incorruptible and tamperproof. However, is it really needed? We don’t believe so.
    • Moreover, Ambrosus is creating its own blockchain. We would question the security of it because there won’t be much decentralization of nodes as there’s no incentive for independent parties to validate the transactions on the Ambrosus blockchain.
  • Food contamination is not a very big problem that we are facing. Here is a list of major foodborne illness outbreaks. As you can see, they happen rather infrequently.

Conclusion

Overall, we are neutral on the ICO’s flipping potential and dislike its long-term potential.

This project is hyped because of its advisors. All-star advisors are great for an ICO only if the project makes sense. A company that was launched three months ago raising CHF100 million to create food sensors and a related blockchain doesn’t make much sense to us. Without business fundamentals, all the advisors in the world would not help the project.

My thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Neutral. The team of advisors really bring the awareness up. However, the hard cap of CHF 100 million is exceptionally high, especially if you consider the company is publicly launched only three months ago. The two token ICOs raising over $100 million, Bancor and Status, are both delivering negative return so far.

In addition, with Modum and Ambrosus’ ICO being so close together, many investors would compare the market cap of each ($23 million for Modum and CHF 250 million for Ambrosus on a fully diluted basis if hard caps are reached). Doing so would make Ambrosus’ valuation seem that much more expensive.

For long-term holding

Bad. As mentioned above, we don’t believe a blockchain solution is really necessary in the food safety supply chain space. Therefore, the chance of Ambrosus being a success is low.

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Analysis of Kin ICO – Decentralized Ecosystem of Digital Services

Analysis of Kin ICO – Decentralized Ecosystem of Digital Services

Summary

  • Project name: Kin
  • Token symbol: KIN
  • Website: https://kin.kik.com/
  • Whitepaper: https://kin.kik.com/papers/Kin_Whitepaper_V1_English.pdf
  • Hard cap: US$75 million (ICO contributors will own 5% of the total token supply if the hard cap is reached)
  • Soft Cap: No soft cap
  • Conversion rate: Total of 10 trillion KIN will be created
  • Maximum market cap at ICO: US$1.25 billion if the hard cap is reached (to reach this figure, the $50 million received from pre-ICO investors and the $75 million to be raised from the public crowdsale represents a combined 10% of the total token supply)
  • Bonus structure: No bonus
  • Pre-sale / white list available: None
  • ERC20 token: Yes
  • Timeline: September 12, 2017 at 9am ET (please refer to Kin’s website for the most up-to-date information)
  • Token distribution date: Immediately after contribution

Project Overview

What does the company/project do?

Kik Messenger, commonly known as Kik, is a freeware instant messaging mobile app developed by the Canadian company Kik Interactive, and is available on iOS, Android, and Windows Phone.

According to Wikipedia, Kik is known for its features that help preserve its users’ anonymity. For example, it allows users to register without providing a telephone number.

Kik has been experimenting with different forms of in-app currencies since 2014, when it launched Kik Points which allowed people to earn points by watching ads. The Kik Points experiment saw an average volume of 300,000 transactions per day during its lifetime from 2014 through 2016, reaching 2.6 million transactions per day at its peak.

Kik is introducing Kin as the new virtual currency on the Kik platform. Over time, Kik will work to structure and form the Kin Foundation, a nonprofit organization that will oversee the fair and productive growth of the Kin Ecosystem.

The Kin Foundation will administer the Kin supply and the Kin Rewards Engine. Ultimately, the Kin Foundation will facilitate the entire ecosystem’s transition to a fully decentralized and autonomous network.

Kin Fireside Chat at TechCrunch Shenzhen (video is 27:38 long):

How advanced is the project?

Kik was founded in 2009. According to Crunchbase, excluding the ICO, Kik has raised a total of $120 million in 5 fundraising rounds. Prior to the ICO, the most recent fundraising round was in 2015 at a valuation of $1 billion. Investors in the previous funding rounds include Tencent, Union Square Ventures, among others.

As of May 2016, Kik Messenger had approximately 300 million registered users, and was used by approximately 40% of United States teenagers. As of September 2016, Kik was no longer growing in terms of number of active users

The below chart shows the iOS App Store’s rank history of Kik over the past year in the United States, United Kingdom, Canada, and Australia, in the overall and the social networking categories (source: AppAnnie):

KIN App Ranking History

As shown in the graph above, Kik’s ranking in the US dropped from #66 overall and #8 in social networking one year ago to #147 overall and #12 in social networking on September 2, 2017. Similar trends are observed in other major English-speaking countries. 

In their white paper, Kik claims that they have over 15 million monthly active users (MAU) with 57% of Kik’s active user base comprised of users aged 13 to 24 years. However, they did not specify which month their data was referring to. 

According to Statista, Kik only had 6 million MAU in May 2017. This decline in MAU makes sense as Kik has been facing intensifying competition from other messaging apps such as Discord, Telegram, Facebook, and Snapchat, among others.

No roadmap is provided in the white paper so there is limited information regarding the future plans that Kik has for Kin.

After the ICO, Kik will integrate wallets for each Kik user account. The associated user interface will allow for the most common wallet interactions. 

What are the tokens used for and how can token holders make money?

Kik will integrate Kin into its chat app by using Kin as the platform’s primary transaction currency. In the future, users will be able to earn Kin by providing value to other members of the Kik ecosystem through curation, content creation, and commerce.

Kik users will be able to spend Kin on products, services, and other valuable assets offered by merchants, developers, influencers, and other participants.

Sample use cases:

  • VIP groups – allows influencers such as celebrities and thought leaders to create premium, exclusive groups that require an entrance fee.
  • Premium user-generated content – content creators can earn Kin by sharing audio, video, and pictures that are hidden and other users need to pay Kin to unlock the content.
  • Shoutout messages – Similar to Super Chat in YouTube and other platforms.
  • Tipping – users can use Kin to reward others for content that they like.

There will be fixed supply of 10 trillion Kin tokens in total. The token structure is detailed below:

  • 1 trillion Kin will be allocated to ICO participants.
  • 3 trillion Kin will be pre-allocated to Kik as the founding member of the Kin Foundation and subject to a long-term vesting schedule.
    • Kik’s 30% pre-allocation will be unlocked and distributed to Kik at 10% per quarter, for 10 quarters.
  • The remaining 6 trillion Kin will be under the purview of the Kin Foundation, locked under the Kin Rewards Engine schema, and used to grow the Kin Ecosystem and fund the operations of the foundation.

Team

As Kin is going to be tightly integrated with Kik, everyone who has been working at Kik are involved in the Kin project. Below are the bios of the core members:

Ted Livingston, Founder & CEO – Founded Kik when he was 22, named one of Fast Company’s Most Creative People In Business in 2017.

Peter Heinke, CFO & COO – Before joining Kik, he spent more than 20 years leading finance, operations and strategy for both established and startup companies in the media, technology and transportation sectors. 

Eran Ben-Ari, Chief Product Officer – Prior to joining Kik, he was the VP of Products at Rounds, an Israeli-based communications company that was acquired by Kik in January 2017. 

Since its inception, Kik has been funded by well-known investors in the tech and blockchain space, including Tencent, Union Square Ventures, Pentera, Blockchain Capital, and Polychain Capital.

Opportunities

  • The Kin token will immediately be used by a large base of users. This is something that almost no other token can achieve right now.
  • The project has generated a lot of media awareness as it is the first ICO initiated by an established company.
  • Kik/Kin has a proven team with strong background and they have worked together to create a very popular messaging app.
  • Kik’s target users are mostly teens aged 13 to 24 years, so this could potentially speed up the adoption of cryptocurrency.
  • The tokens benefit from the network effect. The more people use Kin, the more valuable the tokens will become.
  • If Kin tokens can grow beyond the Kik platform and are used in other apps/platforms, the potential upside will be substantial.

Concerns

  • The fundraising amount is high – $125 million represents only 10% of the tokens, implying a $1.25 billion market cap on a fully diluted basis.
    • The use cases illustrated in the white paper (tipping, shoutouts, premium content, VIP groups) are rather limited and don’t justify a $1.25 billion valuation in our view.
    • In order for the Kin project to be successful, it needs to grow beyond the Kik platform and we believe this is a daunting task with a low chance of success. Ether is already doing what Kik is aiming to do for Kin in the long run. We don’t see a need for a separate Kin token especially when Ether is more widely accepted.
  • Kin tokens will face high inflation – in just 1 year, token sale participants’ share of the circulation will drop from 100% to merely 29%.
    • The market cap for Kin needs to grow to $431 million in one year just for ICO participants to break even.
  • ICO participants are not necessarily existing Kik users – the ICO doesn’t really help Kik rejuvenate its user base.
    • One of the benefits of a token sale is to create a community of token users to kickstart the ecosystem. However, this is unlikely to be the case here since teens are the target users of Kik.
    • If Kik tries to change its user base, it could cause existing users to leave the platform.
  • Kik has been declining in popularity due to intensifying competition from older (WhatsApp, Facebook Messenger, Snapchat) and newer (Discord, Telegram) players.
    • When a business is in decline, it is difficult to turn it around, especially in the tech world, especially when the target users are teens where they like to try new things.
    • Status is working towards becoming the dominant instant messenger for the crypto economy and we believe they will be Kik’s future competitor. Please read our analysis of Status here.
  • No future development roadmap is provided in the white paper. Without a development framework, there is no way of knowing what the key milestones are, how long it would for take them to reach those milestones, and no way of holding them accountable.

Conclusion

Overall, we are neutral on this ICO fo​r flipping and negative on its long-term potential. We believe Kin is going to help Kik’s current users learn about crypto, but it won’t help bring in as many new users to Kik as the company thinks.

Our thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Neutral. The project has generated a lot of buzz and have several blockchain VC investors backing it. However, the VCs got their tokens at a 30% discount. It is not specified whether there is a lockup for the tokens held by the VCs. 

In 0x Project’s case, Polychain Capital sold a portion of their tokens just a few days after the ICO. If the same thing happens to Kin, it would create selling pressure (VCs are more willing to sell at a lower price because their cost base is lower) and that would make flipping less attractive.

For long-term holding

Negative.

We have seen failing startups tap into ICO funding in order to stay afloat. These projects seem promising at first sight because they already have a working product and sometimes have funding from VC firms. However, the market will remain skeptical of their products which makes it hard for those projects to be successful, even after receiving ICO funding.

As for Kin, we wouldn’t go so far as saying Kik is failing, but it is indeed declining and still exploring new ways to grow the company again.

As one of the largest ICOs this year, the project doesn’t have enough growth potential and opportunity for us to justify its valuation.

ICO projects are expected to experience high growth because blockchain technology is also growing exponentially in popularity. In Kin’s case, we just don’t think issuing a crypto token is going to help its business that much. This is because the typical cryptocurrency enthusiast is not a Kik user. As such, we don’t think its $1.25 billion valuation can be justified.

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Crush Crypto Weekly – September 2, 2017

Crush Crypto Weekly – September 2, 2017

I was going to write a very different commentary about cryptocurrency prices until the correction yesterday and today. I am actually relieved that prices have corrected because they kept going up nonstop. A 10-15% correction puts us back to 5 days ago and is healthy. Without a small decline, the eventual correction will be much sharper and more painful.

Cryptocurrencies are gaining more and more recognition by the week. Earlier this week, Business Insider published a pretty comprehensive article about the state of cryptocurrency

We are still early in the game and there is still a lot of money rushing in right now. However, as with any new asset class, asset prices will be very volatile so you need to have the stomach to ride the cycles out. Keep this in mind during a bull market and always think of the downside before upside when making any trades.

Bitcoin rose 7% to around $4,650 while Ether rose 6% to $355. You can see the price movement during the week in the image below:

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Analysis of ChainLink ICO – Decentralized Oracle Connecting Blockchain with Outside Data

Analysis of ChainLink ICO – Decentralized Oracle Connecting Blockchain with Outside Data

Summary

  • Project name: ChainLink
  • Token symbol: LINK
  • Website: https://smartcontract.com/link
  • Whitepaper: Not yet released
  • Hard cap: US$32 million (ICO contributors own 35% of total token supply if hard cap is reached)
  • Soft Cap: No soft cap
  • Conversion rate: Total of 1 billion LINK will be created
  • Maximum market cap at ICO: US$91 million if hard cap is reached
  • Bonus structure: 20% bonus during presale
  • Pre-sale / white list available: Presale is over
  • ERC20 token: Yes
  • Timeline: September 7, 2017 for 1 month (please refer to ChainLink’s website for most up-to-date information)
  • Token distribution date: Immediately after the end of crowdsale

Note: The white paper for ChainLink is under academic review and is not released yet. This report will be updated after we obtain more information from the white paper. 

ChainLink’s Slack is not posted on their website but you can access it here: http://slack.smartcontract.com/

Project Overview

What does the company/project do?

Most smart contracts that seek to mimic/replace securities, insurance and most other financial agreements, will require access to off-chain resources such as data feeds, APIs and any other sort of resource which exists outside of a blockchain network.

Oracles are the necessary middleware that provide this access/functionality to Ethereum smart contracts. With oracles, it is possible to provide programmable contracts that do payouts between two parties once certain criteria have been met, without involving a middleman.

ChainLink has developed oracles that can allow a smart contract creator a way to interact with different data providers, payment solutions, and the traditional banking system. For example: 

  • Smart contract securities need data feeds about market prices and market reference data e.g. Interest rates. They commonly also need to pay into existing bank accounts for many of their users, which can only be done through a ChainLink that connects to the existing banking system.
  • Smart contract insurance needs data feeds about IoT data related to the insurable event in question e.g. was the warehouses magnetic door locked at the time of a breach, was the companies firewall online, did the flight you had insurance on arrive on time, etc. Insurance products also commonly want to pay out in formats that users already want to receive e.g. USD to the end-users bank account. 
  • Trade finance smart contracts commonly need GPS data about shipments, data from supply chain ERP systems, and customs data about the goods being shipped; all of this data needs to be added to the smart contract by a ChainLink. Many trade finance transactions are still currently settled in fiat currency, which they can pay in using a ChainLink.

ChainLink’s LINK Network is the first decentralized oracle network which allows anyone to securely provide smart contracts with access to key external data, off-chain payments and any other API capabilities. Anyone who has a data feed, useful off-chain service such as local payments, or any other API, can now provide them directly to smart contracts in exchange for LINK tokens.

ChainLink supports Ethereum, Bitcoin, and Hyperledger. As ChainLink is a decentralized network, users can receive the rewards of decentralization, trust, and immutability from using ChainLink oracle.

Below is an image capture of a ChainLink oracle.

ChainLink oracle sample

Source: https://create.smartcontract.com/#/contracts/cc3ea3c76b5a60f171e0eaf223146f34?tab=info

Here is a video interview of ChainLink’s CEO (video is 55:25 long): 

How advanced is the project?

ChainLink’s parent company, SmartContract, was founded in September 2014

It was selected as a “2017 Blockchain Applications Cool Vendor” by Gartner. 

SmartContract has a partnership with the interbank messaging platform, Swift. They completed a phase one proof-of-concept in June 2017 where SWIFT is a paying customer of ChainLink.

What are the tokens used for and how can token holders make money?

LINK tokens are used to pay data providers, ChainLink node operators, payment providers, and other online service providers for their services. Smart contract users will compensate the data providers that they use with LINK tokens.

The vast majority of smart contracts need external data to execute. Currently, it is very challenging to get these data, which is why ChainLink exists. The token compensation system will both guarantee accurate data in addition to increasing decentralization across the network.

As LINK tokens are used as a currency on the ChainLink platform, the more usage the ChainLink platform has, the more valuable LINK tokens should be.

Team

ChainLink has a team of 2. Below are the bio of the team members:

Sergey Nazarov, Co-founder and CEO – Serial entrepreneur, veteran in the blockchain space. Prior to starting SmartContract, he was the founder of Secure Asset Exchange, an exchange network similar to ShapeShift, and CryptoMail, a decentralized email service.

Steve Ellis, Co-founder and CTO – Serial entrepreneur, having worked together with Sergey Nazarov on Secure Asset Exchange. Previously worked as a software engineer at Pivotal Labs.

ChainLink has a strong team of advisors, including Ari Juels, Professor of Computer Science at Cornell Tech and Director of IC3, Andrew Miller, Associate Professor of Computer Science at the University of Illinois and an advisor to Zcash and Tezos, and Hudson Jameson, one of the key members of the Ethereum Foundation

Hudson Jameson has written a blog post explaining his decision to be an advisor of ChainLink.

Opportunities

  • With oracle, blockchain technology and smart contract will become vastly more useful. People would be able to execute different kinds of contracts in a trustless manner. I believe ChainLink’s oracle will help blockchain technology reaching mass adoption. 
  • ChainLink’s partnership with SWIFT, which is used by over 11,000 banks worldwide, allows ChainLink to easily partner with other financial institutions going forward.
  • The team has been working together in the blockchain space for a few years already and came up with functioning products in their previous venture.
  • Network effect is present because the ChainLink platform is more useful when it is the go-to source for blockchain data feeds, so that users don’t need to go to several sources for different types of data.

Concerns

  • The white paper is not released yet. However, in my opinion, I don’t think this would increase the chance of the ICO being a scam, because 1) if the project is a fraud, they would have released the white paper to make it less suspicious, 2) SmartContract has been around for 3 years and the team has a solid reputation in the blockchain space, 3) they closed the presale and stopped accepting any contributions until the crowdsale begins.

Conclusion

Overall, I like this ICO both for flipping and long-term potential. This is one of the projects that can push blockchain forward and allow smart contracts to be actually “smart”.

My thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Good because 1) the project has a strong team and advisors, 2) the partnership with SWIFT legitimized ChainLink and provided traction, 3) tokens will be distributed immediately after the end of crowdsale, and 4) a portion (amount unspecified) of the hard cap is already sold in presale.

For long-term holding

Good because 1) ChainLink is solving a real and highly lucrative problem with tons of use cases, and 2) the project has traction already with SWIFT being a paying customer.

For more information about the ICO, please visit the following links:

Website: https://smartcontract.com/link

Sergey’s presentation at EDCON in February 2017: https://www.youtube.com/watch?v=DrlL5v78FtA

TABB Forum interview with Sergey in November 2016: http://tabbforum.com/videos/powering-smart-contracts-with-oracles-sergey-nazarov-smartcontract

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