ICO Analysis: Agora

Thanks to technology, many things in our lives have experienced drastic change.

While we can call someone at the other end of the world for free, some things are still stuck in the past. One of those things is voting.

Agora wants to bring voting into the 21st century using blockchain.

Among other issues, the voting systems we have today (and had 50 years ago) are expensive, slow, and easy to tamper with. Using blockchain, Agora wants to make voting systems cost-efficient, quick, and secure. Moreover, they want to incentivize and engage more voters.

With blockchain, voting can be done remotely and instantaneously. Moreover, as votes are stored in an immutable ledger, votes are unable to be manipulated during any point of the voting process. Since blockchain records are also public for all to see, the voting process under Agora woulda become transparent and easily verifiable.

Token

The way the Agora voting ecosystem works is a global community of nodes maintain a verifiable voting blockchain.

To incentivize nodes to maintain voting records, process election-based transactions, and audit election results, nodes are rewarded in VOTE tokens for their efforts.

Whenever Agora signs a contract with a government or organization to handle their voting process, part of the contract is set aside to purchase VOTE tokens from the secondary market (e.g. exchanges) to pay nodes for maintaining records, processing transactions, and validating election results. As stated in the Agora whitepaper, the purchase of these “Election Reserved Tokens” are the main source of VOTE token demand.

From the whitepaper, here is a table that shows the formula and example calculations for purchases of Election Reserved Tokens:

Nodes that audit election results are called Citizen Auditor Nodes. There are a few requirements to run a Citizen Auditor Node:

  1. Signal interest in becoming a Citizen Auditor Node
  2. Be part of a random selection of applicants by Agora
  3. Undergo an application process
  4. Pass application evaluation (background checks, identity verification, competency evaluation)
  5. Sign contract detailing Citizen Auditor Node duties
  6. Stake (“pledge”) VOTE tokens to ensure integrity. If contract obligations aren’t upheld by a Citizen Auditor Node, the node operator forfeits their pledge. Pledges must be maintained for at least 90 days.

Nodes that process transactions are known as Consensus Nodes. These nodes are invite-only and drawn from the ranks of NGOs, universities, and other politically-neutral organizations. Citizen Auditor Nodes make sure that Consensus Nodes process election results correctly.

There is a total supply of 1 billion VOTE.

  • 50% will be allocated towards the token sale.
  • 15% will be for the company, with company tokens subject to a 4 year lockup with 1 year cliff.
  • 15% will be for the team, with team tokens subject to a 3 year lockup with 1 year cliff.
  • 11.5% is for partnerships (1.5% of this 11.5% is for community airdrops and bounties).
  • 8.5% is for advisors.

The token sale has a soft cap of $1.25m and a hard cap of $20m.

The ICO price is set at $0.041.

Presale started May 14th, 2018 and is still live (though whitelist has closed). 80.16% of token sale tokens are available for presale vs. 9.84% for the crowdsale. For presale investors, there is a 4 month lockup on bonus tokens and no lockup on normal tokens.

Token sale proceeds will be used for the following:

  • 40% product and research and development
  • 35% business development
  • 10% operations
  • 10% buffer
  • 5% legal

Team

CEO Leonardo Gammar is the head of Agora and ran and sold two different trading algorithms to a top 15 hedge fund before running his own funds and researching blockchain consensus models. His blockchain research combined with a “mission”-driven focus led to the founding of Agora.

CTO Boris Kaplounovski has a long tech background at companies like Sun Microsystems, Intel, and AviaSales, the number one online airfare seller in Eastern Europe.

Partners include the names mentioned below but details of partnerships are unspecified.

  • Shyft
  • Georgie Badiel Foundation
  • Blockchain Association of Canada
  • Blockchain Association of Uganda
  • Holdex
  • Blockpass
  • Edinburgh Napier University
  • Fribourg
  • University of Fribourg

Verdict

Below is a breakdown of the risks and opportunities associated with Agora.

Risks

  • If demand for VOTE tokens mainly based on Agora being used for elections, it seems that token demand is driven by the Agora team’s ability to get contracts. Contracting with governments to oversee elections is no small task (-0.2)
  • Related to the above, according to the table posted in the Token Economics section of this review, a 50 million voter election would only lead to a purchase of $1m in VOTE tokens. How many elections per year does Agora expect to handle? Agora won’t buy massive amounts of VOTE (and drive trading volume) unless the whole world were to adopt Agora for voting (farfetched – for now) (-0.2)
  • There seems to be no other use for the tokens other than paying nodes that verify election results and audit those results (-0.2)
  • What is the difference between company tokens and team tokens in the token distribution? (-0.1)
  • Lied or was otherwise misleading about using blockchain in Sierra Leone’s 2018 presidential elections (-0.15)
  • None of the heads of business development (former ambassadors and so on) or project ambassadors (Mauritian presidents, former wives of Ukrainian presidents, etc.) listed on the Agora team page, list Agora on their Linkedin profiles (-0.15)

Growth Potential

Disposition

Voting is something that could really use innovation via new technology like blockchain but from an investment standpoint, Agora isn’t looking too good. Agora receives a 1/10.

Investment Details

  • Type: ERC20 – Utility
  • Symbol: VOTE
  • Platform: Ethereum
  • Crowdsale: August 15th, 2018
  • Minimum Investment: 1 ETH
  • Price: 1 VOTE = $0.041
  • Hard Cap: $20m
  • Payments Accepted: ETH
  • Restricted from Participating: USA, China, Canada

For More Information

Featured image courtesy of Shutterstock.