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ICO Analysis: Bancor

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We have previously done a precursory article covering Bancor, but now, with the impending launch of its Initial Coin Offering, it’s time to analyze the thing in-depth.

In our previous article, we discussed the primary novelty of Bancor, its “smart token” asset contracts. A reader wrote in with concern over this aspect, and wants more in-depth information into how this can work or is safe. Clearly new concepts like this do need more explanation, so let’s see what we can understand here.

Perhaps the top-tier objection to the Bancor protocol are its roots, of course:

The Bancor protocol is named in honor of the Keynesian proposal to introduce a supranational reserve currency called Bancor to systematize international currency conversion after WWII.

The name is, of course, quite apt for the purpose of the token. Is Bancor itself Keynesian? Not exactly, but we must dutifully check over the offering here to ensure that there are not value-murdering features like centralized institutions being able to introduce inflation, or supposedly immutable smart contracts being thwarted through appeals to authority. These are the real risks that many Bitcoiners, and others, take with Keynesian economics, and so this platform requires thorough review to ensure that it is not going to introduce such risks by design.

Smart Tokens

The Bancor protocol enables built-in price discovery and a liquidity mechanism for tokens on smart contract blockchains. These “smart tokens” hold one or more other tokens in reserve, and enable any party to instantly purchase or liquidate the smart token in exchange for one of its reserve tokens, directly through the smart token’s contract, at a continuously calculated price, according to a formula which balances buy and sell volumes.

Especially in recent offerings, a number of tokens have come to the game which could find themselves without any value at all. The Bancor notion of “continuous liquidity” seems to be based on the idea of previously proven value from other assets the token offering might have access to. Thus a “smart token” can always be liquid because it always retains value from another economic source.

This is higher-level thinking, from the get-go, in terms of tokens and crypto-economics. While Ethereum and Counterparty, and others, serve a similar purpose by allowing anyone to issue their own tokens, those tokens are overwhelmingly defined by their utility, and so they can be difficult to assess. But if one can point to a metric such as “each token contains X bitcoins, X ether, X ___, and so its intrinsic value is at least equal to the value of one or all of those,” then there is a new metric that is useful in determining the likely trajectory of projects. In short, one function that smart tokens can perform is that of token issuers providing collateral.

The current exchange model for currencies/assets has a critical barrier, requiring a certain volume of trading activity to achieve market-liquidity. This inherent barrier makes it nearly impossible for small-scale currencies (such as community currencies, loyalty points or other custom tokens) to be linked (exchangeable) to other popular currencies using a market-determined exchange rate.

So, in the current world, where BTC, ETH, DASH, and LTC make up a large portion of the cryptocurrency wealth, a token creator might decide to issue a token that is contains assets around 50% Bitcoin, 25% ETH, 12.5% DASH, and 12.5% LTC.

This is sort of the same principal that mutual funds operate on: mixing various similar instruments so that when one or more of them have poor performance, the others can pick up the slack. But the token holder, through the Bancor protocol, is able to extract that given value at any time and destroy their tokens issued on the Bancor protocol. An FX mutual fund, made up of the world’s currencies, would be the closest thing to this, but instead there is no firm managing and the individual currencies can be obtained by the investor at any time, via the protocol.

This aspect could give rise to other cryptocurrencies being used in actual settlements, regardless if exchanges are offering such pairs at that time or not. The speed of value proposition would become more important than the speed of human change – ie, new currencies which come after Bancor but have exceeding merit will not need for recognition from the wider community before being used as the base currency with which others are denominated and traded. The control that exchanges as a whole have over the way we think about our coins would be lessened in such a world where this became commonplace.

The term “instant liquidity” is used a lot in the documentation and promotional materials surrounding the Bancor protocol, and they make the case in their whitepaper that liquidity for newer cryptocurrencies is a problem. However, the words “instant liquidity” are perhaps misleading. The term liquid means different things for different users. Some would consider getting to Bitcoin itself to be liquid, while others wouldn’t consider the assets liquid until they were in an account they can spend anywhere else in the world – ie, fiat. So let’s leave aside the “instant liquidity” as either a plus or a minus, and instead focus on the structure of a smart token and how it can actually be used, in practice, in concrete terms.

A smart token holds a balance of least one other reserve token, which (currently) can be a different smart token, any ERC20 standard token or Ether. Smart tokens are issued when purchased and destroyed when liquidated, therefore it is always possible to purchase a smart token with its reserve token, as well as to liquidate a smart token to its reserve token, at the current price.

Okay. How does this work?

A given “smart token” will base its operations on what Bancor refers to as a “constant reserve ratio.” All figures within the smart token will be in relation to the smart token’s market capitalization as a whole, which is its supply multiplied by its price. Instead of Bancor token authors creating tokens at the beginning of an ICO offering or what have you, they are issued as they are purchased, and destroyed as they are liquidated.

A Bancor token must be funded by one of its reserve currencies. If the CRR of a given token is 100% of a given other currency, then a traditional increase in the price of the token will take place. However, if a token’s CRR has a variety of reserve tokens, then the price increase due to the purchase will be mitigated. This is what they mean when they say they are creating a new method of price discovery: a variety of markets are held within each token, potentially, creating more interesting and even accurate price definitions at market. And while a token may be issued on the Bancor protocol and consist of multiple traded cryptocurrencies making up its Constant Reserve Ratio, it, itself, can be traded elsewhere. People purchasing these tokens on other markets would not be able to simply say something had lost all value because its Bitcoin value had significantly dropped, for example, if its corresponding values in other pairs also represented in the token have not dropped likewise. Similarly, traders would have to watch themselves when pricing sales of such tokens, because saying “this token is worth .01BTC” does not mean much if any of its other reserve currencies are not trading at a similar level. (This is why Bancor can make the claim that there is “no spread” for individual Bancor tokens, because while there actually is a spread, the settlement of any token issued by the Bancor protocol will wind up with its holder gaining the reserve currencies within it.)

From a traditional financial perspective, this all sounds an awful like the type of instruments which got us into the bubbles and crashes of the early 2000s. Traders were packaging millions of low-value, low-performance loans and other financial instruments together and selling them as packages of “diversified assets” and then speculating on their performance from there, in some cases even managing to bet against them and profit being the only ones with the real information as regards their likely performance. The complexity of these instruments was part of the reason the whole musical chairs act went on so long.

Yet, while there is potential that bad actors will use the technology to scam others into investing into nothing at all, there is still a lot to be said for innovating in the market strategies of a tokenized future.

How People Will Use It

The Bancor team themselves list a number of use-cases that will be immediately obvious. Rewards programs, decentralized asset baskets similar to those being developed by ShapeShift’s Prism platform, and federations of similar tokens. Lower-volatility tokens can be created in-house by trading groups, and such products can be offered for sale on the market. Cryptocurrency mutual funds become much easier to envision, despite the volatility of the various markets. This part of finance will eventually become much more important in the Cryptocurrency space as things mature and more and more legacy institutions integrate with cryptocurrency payment, receipt, and trading rails.

The Bancor token itself will be the most prominent for the Bancor Protocol, as it will be the one that funds all future advancement and development. Its actual cap is not published until 80% of that cap has been reached, but 100 tokens will be issued per 1 ETH spent. BNT tokens will have a 20% Constant Reserve Ration of ETH. BNT itself will be based on the value of the Bancor Network and its reserve currency, ETH, although the Bancor Foundation can issue more tokens later.

Bancor tokens themselves will hold value for as long as the Bancor Foundation and Ethereum do, and users will have the option to liquidate them at any time. This would mean, essentially, a 20% Ethereum redemption is possible. In assessing this ICO, you must be aware that some people are going to do exactly that.

Bancor Team

The Bancor foundation itself is not going to be doing the creation of the Bancor Protocol, but instead directing it. It is composed of financially-focused executives including Eyal Hertzog, who is the primary spearhead behind all of it. Hertzog’s success has been in IPO technology companies, such as the first major Israeli video sharing site, MetaCafe.

Chief Monetary Architect Dr. Bernard Lietaer was involved in the creation of the Euro, and so it is no surprise that much of the thrust of Bancor is in trying to unite and stabilize disparate cryptocurrency assets.

As far as development goes, they are currently contracting LocalCoin, Ltd, which, like many similar ICOs we have seen, seems to have been created specifically for the purpose of Bancor. The model seems to work like this:

  • Have a new idea related to cryptocurrency.
  • Flesh out that idea.
  • Create a firm to develop the idea, to be funded by sales of the new token.
  • In some cases, profit on both sides of this.

This is why we we will review the token distribution before getting to the verdict on Bancor, but let’s see who is working for LocalCoin.

At the helm they have Yehuda Levi, who formerly worked on AppCoin, one of the earlier cryptocurrency plays to get traditional VC backing. They list a litany of other competent, established developers, all based in Israel, working on the development of Bancor Protocol smart contracts.

Distribution of the Token

As we can see here, the token distribution is confusing on first glance. Let’s think about this. We know that 10% are going to the “team,” in the form of BNT tokens. Then we know that 40% of the 50% of tokens (20% of the total supply) are also going to fund development. That means somewhere in the neighborhood of just over 20% are going to be awarded to LocalCoin in the form of paid software development and initial awards. 20% are also held back by the foundation for later conversion and usage. The foundation is free to offer later crowdsales to continue work on the platform.

But, this ICO is also different than most. The tokens’ only enduring value is in the enduring value of the Bancor Protocol, which means there is little or no incentive for the coins withheld to be liquidated right away, but instead to create value for the protocol and liquidate them at a later time.

The proceeds of the crowdsale and future tokens issued by the Bancor Foundation will continue to develop the distributed marketplace that is Bancor’s primary function. BNT themselves will have speculative values related to the value of the protocol itself, it seems. The problem of team coins is mitigated by their vesting structure, which only allows them mature up to a sixth of withheld coins every six months.

The Verdict

There’s a lot to like about the Bancor Protocol, but one can totally forego this crowdsale and still benefit from it. So let’s talk about the value of the BNT token, and whether or not you’re going to be able to profit by purchasing it. The odds are definitely on you profiting in the short term, although long-term it’s easy to see bigger entities, like the Ethereum DAO themselves, offering alternative ways of conducting the same type of business.

BNT gets an immediate boost in safety rating since you are able to liquidate it for 20% of the Eth that was put into it in the first place at any time. That is to say, it’s impossible to lose your entire investment, in terms of actual Ethereum, so that must be accounted for.

The level of confusion Bancor-created instruments have the potential to create must also be accounted. We have to deduct a full two points for that, as there will probably be some hiccups in the beginning, and these could even be catastrophic and unrecoverable. The nature of mixing assets may be looked down upon parts of the community it looks to serve, so another .25 points should be taken for that. Because this entire concept is nascent in an excessively nascent industry, another full point must be deducted to account for the potential that overshadowing plays are going to be made in the near future.

This leaves a score of 6.75 on a scale of 0 to 10 in terms of safety, and that feels about right. This means the author is betting in favor of the idea that within 7 days after the purchase of tokens, you will be able to divest them at a rate of about .01 Eth each or more. It does not mean the author is not betting. It simply takes into account all of the factors, most of which are based on his past experience watching similar things launch. While every project is different, the tendencies of this market are analytically-assessable.

Investment Details

You’re able to make an investment into the Bancor Protocol at a rate of .01 ETH per Bancor Network Token in less than 7 hours. The minimum time this sale will run is one hour, and they had to develop a special method to ensure this would be the case. There is a hidden cap on how much ETH will be raised, but no one will know that figure until 80% have been raised – this is to prevent early investors from being able to accurately dominate the token pool.

Investments are subject to terms and conditions. The address which will be handling the investments is 0xBbc79794599b19274850492394004087cBf89710. Transactions already sent to this address at launch time fall under their one-hour-minimum policy, which dictates that if more than 100 million Ether are raised in the first hour, additional funds will be allocated specially. This post goes into a lot more detail about the funds and the minimum time period. No funds should be sent from a wallet which you do not have direct control over.

The longest the crowdsale will run is until June 26th at 14:00GMT.

Do your own due diligence, investments are at your own risk. Do not invest more than you can lose.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 2 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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2 Comments

2 Comments

  1. demetrist

    June 12, 2017 at 9:51 am

    Thank you for the great analysis! I am confused about 1 aspect, if you can help. Bancor team has announced that 80% of ETH collected that is above the hidden cap will be locked into a smart contract for 2 years or until it’s fully spent, which will automatically buy BNT if the price = 0.01 ETH (the ICO price). I m quite confident that the ICO will go over it’s hidden cap by a lot. Doesn’t that guarantee that we are not losing on the investment for quite a while, and that we could get out of the project at any time at at least the price we bought in (and meanwhile if ETH prices goes up, profiting from that respect) ?

  2. paracetomol

    June 12, 2017 at 11:13 am

    Is it safe to send ETH to the address shown in the article a few hours before the opening of the crowdfund?

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ICO Analysis: Virtual Rehab

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According to recent studies, in the USA alone, over $35 billion a year is spent on addiction treatment services, and about $80 billion is spent on incarceration. Despite this spending, 77% of released offenders recidivate within 5 years. Luckily, with the recognition of the United Nations, The team at Virtual Rehab is coming out with new technology to fight this epidemic.

Virtual Rehab leverages virtual reality, artificial intelligence, and blockchain technology for the prevention of substance use disorders. It also provides correctional services training and rehabilitation to officers and offenders.

“Virtual Rehab believes that putting a kid in the corner does not teach them how to be a better person but rather teaches them not to get caught. Therefore, we are in it for the social good and to help address the needs of the most vulnerable populations out there.”

Four key components make up Virtual Rehab’s platform.

  • Virtual Reality: Real-life scenarios using cognitive behavior and exposure therapy to train users how to respond appropriately in the face of triggers.
  • Artificial Intelligence: Collects data from the VR environment and physiological data, and applies machine learning to identify areas of risk, make treatment recommendations, and predict post-therapy behavior.
  • Blockchain: A secure network to ensure privacy and decentralization of all data and all information relevant to vulnerable populations.
  • VRH Token: Used to purchase different services/programs. Also used to reward users who seek help through Virtual Rehab’s online portal.

Virtual Rehab’s services extend to hospitals, rehab centers, correctional officers, inmates and other verticals. Rehab for sex offenses, family violence, alcoholism, and many other offenses will also be supported. It can also be used to treat mental illness, emotional disorders, intermittent explosive disorder, and many others.

Virtual Rehab can overcome distance barriers, allowing rehab services to anyone, anywhere, because the technology can be implemented in a telemedicine context.

Here’s an example of what it might look like when a user is immersed in Virtual Rehab.

“And indeed, we capture the actions and reactions, decision making, and capture the biometrics (heart rate, blood pressure, and biodermal activity) along with keeping track of the eye movement using eye-tracking.”

The AI solution will aim to do three things:

  1. Identify areas of risk
  2. Make treatment recommendation along with existing medication prescribed
  3. Predict the behavior post-therapy

The HMD can include sensors that measure the physiological responses of a user as they interact in VR, such as heart rate or eye movement. This information is inputted in a sort of machine learning metadatabase to be used to assess whether the user’s selected responses are inconsistent with their physical activity. This helps determine if the user is attempting to deceive the system.

Token

VRH is a utility token built on Ethereum. It will be used to place an order and to download several different therapy programs (pain management, addiction prevention, cognitive behavior, etc). It will also be used to receive further analysis of the executed programs conducted through Virtual Rehab’s AI solution.

In addition, VRH will be an incentive to reward users for seeking help/counseling. Certain conditions will apply along with proof that users have sought therapy and counseling. Rewards will be claimable using the Virtual Rehab Portal.

Distribution:

  • 60% token sale
  • 15% Founders and Advisors
  • 10% Future Development Fund
  • 10% Partnerships
  • 5% Marketing

Use of funds>

  • 30% Marketing
  • 50% Future Development
  • 20% Partnerships

Team

Dr. Raji Wahidy – Founder and CEO. Spent 9 years in different leadership roles at telecommunications giant, Vodafone Enterprise. He spent 4.5 years manager at Ericsson Canada. Founded and successfully exited Amalana in 2012. Registered UN and UNICEF volunteer, and has received 16 global enterprise achievement awards.

Amal Azzeh – Co-Founder and CFO. 40+ years of experience in finance. She co-founded My Recruiting Team in 2016, a platform better known for its first-to-market Recruitment Helpdesk Support Services. No other work history is available on LinkedIn.

Jean Speville – Chief Mind Technologist. Four years as Senior Service Engineer at ASUS. Founded Vessla Development in 2015. Vessla recently created a completely cordless IoT screen with built-in WiFi. It consumes 99% less energy than LCD & LED screens. He’s a member of The Verizon Innovation Program in San Francisco, an Alumni of the Microsoft Accelerator Bootcamp Program, and a member of Sting Accelerate (Swedish #1 incubator for tech startups

They also list three consultants, including Pankaj Jain, who has worked for Nokia, AerNow, and Tivo inc

There are ten advisors. Instead of listing them all, we’ve highlighted some of the companies they have previously held high positions at: MEDNAX, HHS, SAMHSA, Microsoft, Kaiser Permanente, AIG, J.P. Morgan-Chase, MixERP, Ammeris

Verdict

“Virtual Rehab’s evidence-based solution leverages the advancements in virtual reality, artificial intelligence, and blockchain technologies for pain management, prevention of substance use disorders, and rehabilitation of repeat offenders.” And that’s just the tip of the iceberg. They will be getting into formal education as well as vocational training videos. Auto Mechanic, plumbing, how to properly putt a golfball… the possibilities are endless. On a recent Building The Future podcast, CEO Dr Raji talked about how he has had conversations with the Canadian Space Agency, who have been thinking of using VR for astronauts.

Risks

  • The ability to fully provide privacy, security and scaling is not there yet on the Ethereum blockchain. -2
  • The $20 million hardcap is rather high. This could cause a selloff early when this hits exchanges if demand isn’t there yet. -1
  • There’s a strong possibility that the company’s Telegram user count of 18,500 is not genuine. There’s only a handful of people chatting each day. -2 
  • According to the roadmap, they won’t be listing a Github until Q1 2019. -1
  • The roadmap makes bold, unrealistic, claims, such as VTH will be listed on a top 10 exchange in Q1, and another top 10 exchange in Q2, and yet another top 10 exchange Q3. -2

Growth Potential

  • The team has connections to the UN, UNICEF, and 3 big accelerator/incubator programs. +2
  • First mover advantage (Addiction and Corrections). +1
  • Existing partnerships with Causalius, Chains International, Command Sourcing, Innovative Prison Systems, NETE, and Netswitch Technology Management. +2
  • Virtual Rehab will charge users for hardware, software licenses, programming required, and any support required. According to CEO, the total bill is still about 15% of the cost institutions pay now. +2
  • Unlimited expansion opportunities. PTSD, anxiety, autism, formal education, vocational training…+3
  • Dr Wahidy (Founder/CEO) just got awarded “Expert” status by the United Nations Global SCP program. This will open a ton of doors around the world. +4

  • Not much competition yet.+1

Disposition

Definitely keep this one on your radar, huge potential. 7/10

Investment Details

All unsold tokens will be burned. Tokens allocated to Virtual Rehab Team vest for 12 months.

The minimum contribution is $1,000 during presale and $100 during the main sale.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.1 stars on average, based on 23 rated postsJoshua Larson is also known as the "Bullshit Man" for his ability to spot it a mile away. Avid ICO researcher and contributor. Former professional poker player/backer. Spent 10 years analyzing hand history, stats, and player data. Discovered blockchain in late 2016, and never looked back. He now uses his analysis skills to investigate ICOs full time. What a perfect match, because in today's crazy world of ICOs, information, passion, and diligence = dollar bills!




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ICO Analysis: Ultrain

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Ultrain Technology Limited is a cloud computing and smart contract platform with a programmable tech-infrastructure and multiple add-on features. Ultrain will function as an infrastructure for scalable decentralized applications (dApps), as well as provide trusted computational services to multiple sectors, such as retail, shared economy, logistics, financial services, healthcare, and media/entertainment.

The company will use a new random trusted consensus framework allowing the network to use only 1% of computing power to mint new coins, freeing up the remaining 99% to be used by applications. Ultrain will provide computing power for network management, AI, user-friendly smart contracts, high-performance trust computation, and blockchain IoT services.

This business ecosystem is comprised of multiple business organizations separated into three sectors:

  • The Technology Sector: infrastructure services integrated based on public blockchain, AI, and IoT.
  • The Horizontal Services Sector: organizations that provide decentralized business services, including decentralized insurance, decentralized banks, decentralized loan services, etc.
  • The Vertical Application Sector: decentralized application services that can be implemented in numerous industries such as finance, retail, scientific research and development, manufacturing, logistics, entertainment, pharmaceutical biochemistry, food, real estate, education, agriculture, etc.

Consensus features of Ultrain:

  • Completely decentralized architecture
  • Ultra-large-scale network cluster
  • Multi-terminal support
  • High-performance computing
  • Decentralization design

Token

UGAS is the utility token that will be used within the Ultrain economic system. UGAS will be required to pay for the use of the computing power and third-party service components on Ultrain. Also, all participating nodes are required to mortgage UGAS. UTokens on Ultrain, similar to ERC20 tokens on Ethereum, will be issued by each dApps running on the network. dApps will choose their own consensus mechanisms and token metrics.

The project has already raised $20 million during a seed round, during which 10% of the token supply was sold. Five percent of token supply is allocated for private/public sale scheduled for Q4 2018. The overall breakdown is as follows:

  • 50% Mining
  • 15% Core Team
  • 10% Foundation/Ecology
  • 10% Private Sale (Already completed)
  • 10% Consultant & Community Building
  • 5% Future Private/Public Sale

Team

The Ultrain team is impressive, bringing extensive experience from powerhouse companies such as Alibaba, Google, IBM, and Ant Financial. Their experience includes IT, finance, blockchain, business, management, computer programming, & software development.

Team members include:

Rui Guo – Ultrain Co-founder & CEO. Former Technical Director for Alibaba Group. Former Senior Architect for IBM

Husen Wang – Ultrain Chief Cryptologist. Former Blockchain Cryptography Expert for Ant Financial. Former Project Collaborator for Luxembourg Institute of Science and Technology (LIST)

Yufeng Shen – Ultrain Chief Architect. Former Senior Technical Expert for Alibaba Group. Former Senior Software Engineer for Google

Advisors include:

Dr. Keyu Jin – Tenured Professor at the London School of Economics. Board Member for the Richemont Group. Harvard University PhD

Luyu Yang – Co-founder of musical.ly. Former Product Management Director for eBaoTech Corporation. Co-Founder of Snowbird Consulting

Verdict

Using a completely decentralized public network with lower operating costs, higher operating efficiency, and innovations in cryptography, Ultrain aims to surpass traditional public blockchain platforms in performance and scalability with up to 20,000 tps. With a stellar team and strong financial backing, Ultrain could become a major player by 2019.

Risks

  • Even with an all-star team, competing with the likes of Ethereum, EOS, and NEO is no small task. -1
  • Token metrics are a major aspect which ico investors consider. Based on current information available, the total market cap valuation is $200 million which is rather high in the current market. -1
  • The hype factor for Ultrain, which carries weight in the current crypto market, isn’t considered high. However, it is currently growing and gaining momentum. -1

Growth Opportunity

  • Ultrain will release important R&D milestones and be the keynote speaker at SF Blockchain week in October to kick-start the developer community building for Ultrain. There are several products to be released: (1) Public testnet launching, (2) Permitted mainnet launching, (3) Zero knowledge proof demo, and (4) Multiple DApps demo on chain. +3
  • Unitopia lab, a Blockchain research lab of the well-known Chinese video game developer Electronic Soul, announced a strategic partnership with Ultrain. Together, they will aim to establish a presence in this new market and make Blockchain video games a household product. +3
  • DApps will be able to use their own consensus mechanism or choose PoW, PoS, DPoS, POA, and RPOS. +2
  • Ultrain has an extensive list of investing partners including Draper Dragon, FBG Capitol, KuCoin, and Bixon. +2

Disposition

While Ultrain hasn’t gotten as much attention as some hyped up ico’s, this could work out in favor of investors who see an opportunity of an excellent project that’s been flying under the radar. The team and advisors are solid, they have a partnership with Unitopia lab, and they have the backing of numerous VC firms. All things considered, Ultrain receives a 7 out of 10 rating.

Investment Details

  • Type: Utility
  • Symbol: UGAS
  • Price: 1 UGAS = $0.20 USD
  • Total Supply: 1,000,000,000 UGAS
  • Private Sale: 10% of tokens (Completed)
  • Future Private/Public Sales: 5% (Q4 2018)

For more information regarding Ultrain:

Website: http://www.ultrain.io
Telegram: https://t.me/ultrainchain
Twitter: https://twitter.com/UltrainB
Facebook: https://www.facebook.com/Ultraincommunity/
Medium: https://medium.com/@ultrainchain

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 51 rated postsKent Hamilton - Co-Founder of CryptoDayTrader.io, where we are building Pro Crypto Tools




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ICO Analysis: Hedge

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When you buy your first cryptocurrency and start trading between pairs, usually you do in accordance with what you have heard from other people or your own research. Thinking that some project is truly good, you expect to make some gains. Yet it is always hard to have an estimation for “some gains”. Unexperienced traders usually get greedy, expecting more profit. This usually ends up with not taking profits and losing some of your investment. More experienced traders sometimes set prices to sell some or all of their tokens, taking profits and moving forward. This way of trading is basically predicting a price to sell cryptocurrencies: If you make a good prediction, then you sell at the peak. If not, either you are not able to sell as the price did not go up as much as you have predicted, or it keeps rising up which would be still a good trade.

Hedge is a platform allowing seasoned traders to sell their predictions. They create Blueprints with the predicted information in the form of a smart contract. They are required to stake HEDG tokens which can be seen as a measure of security, disincentivizing these investors’ spamming Blueprints. Platform users obtain these Blueprints in return for HEDG tokens.

A decentralized oracle then checks whether the prediction is true or false. If true, the predictor gets all staked coins. If not, the predictor loses his or her staked coins and the platform user gets his or her token back. Blueprint creators are ranked in terms of their success rates, streaks and so on. By checking creator’s rank, platform users can buy blueprints from more successful creators. Once you feel confident in your trading skills and predictions, you can create and sell Blueprints yourself on Hedge as well.

Yet a dispute over almost anything is possible. A platform user or a Blueprint creator can create a dispute about the result of his or her prediction. In this case, the disputer has to stake more coins and highly-ranked users decide whether the prediction is, in fact, true or false. If a person is false about his or her dispute, he loses these additionally staked coins as well. All this process, from the creation of a Blueprint to the dispute’s result, is conducted in a decentralized manner.

Token

HEDG tokens are used for the creation of Blueprints, buying these Blueprints and creating disputes. The staking mechanism, a quite common defense mechanism, ensures that spamming Blueprints is not financially viable for the attacker.

As tokens at any sale stage are sold $0.02, the ICO investor does not have much to worry regarding any huge bonus for private investors and so on. 90% of the hard-cap is already sold which is a good reason to think that the project has met interest to some acceptable degree and meeting the hard cap should not be hard.

The initial total supply of HEDG is 1 billion tokens with the following token distribution:

  1. 50% private and public tokens
  2. 10% seed round
  3. 20% team
  4. 12% partnerships and community
  5. 3% advisors
  6. 5% company

Team, partnership and community, and advisor tokens are locked for 36 months, 12 months and 12 months respectively. Once the lock-up period ends, tokens will be released in monthly installments.

There is no information on how the team is planning to use the token sale proceeds at the moment.

Team

CEO David Waslen: Prior to co-founding Chrysalis Capital Advisors Inc., Waslen was the director of finance at Handy, an application to book home services.

Allan Redman: Redman is a senior software developer at Siemens Canada. Before joining Siemens, he was a senior .Net developer at Schneider Electric.

Verdict

Below is a breakdown of the risks and growth potential of Hedge.

Risks

  • No advisors are listed as of September 15th. (-1)
  • In the absence of social media channels such as Reddit and Telegram, it is hard to gauge the community interest in the project. (-1)
  • A more complex prediction system instead of a true/false one could create more interest and diversity. (-1.5)

Growth Potential

  • The project has already met 90% of its hard cap in prior rounds and should not have trouble to hit the cap. (+2)
  • Prediction market cryptocurrency projects tend to do well in terms of return on investment. (+2)
  • Such a taking mechanism is a common, yet a good way to defend against spam attacks. (+1.5)
  • Low hard cap. (+1.5)

Disposition

Hedge is a very simple, yet elegant prediction market cryptocurrency project. It enables seasoned investors to sell their predictions and less experienced traders to buy them with HEDG tokens. Even the adoption of a small community is sufficient for the project to work, which is quite likely as it has already raised 90% of its hard cap, precisely $9,000,000. On the other hand, from the perspective of an ICO investor, it is hard to gauge any potential return on investment as the absence of social media channels makes it extremely hard to gauge the community interest in the project. Implemented staking mechanism defends the platform against spam attacks and gives platform users a reason to use tokens. Investors might think that a binary prediction system isn’t ideal vs. a more sophisticated one. Hedge receives a 3.5/10.

Investment Details

  • Type: ERC20 – Utility
  • Symbol: HEDG
  • Platform: Ethereum
  • Crowdsale: October 17th
  • Minimum Investment: Unspecified
  • Price: $0.02
  • Hard Cap: $10,000,000
  • Payments Accepted: Unspecified
  • Restricted from Participating: Unspecified

For More Information

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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