ICO Analysis: BGX

In 2017, mobile gaming revenue worldwide reached $30 billion and is expected to increase by 15% in 2018. The market is dominated by a small group of companies that care little about their communities while charging developers insanely high fees to use their platform. The space is ripe for evolution through blockchain, smart contracts, and AI.

BGX.ai is a decentralized multifunctional platform for mobile games powered by AI. BGX will have many functions, including:

  1. A distribution system for gaming apps on Android and iOS
  2. Independent processing of fiat and crypto transaction, including support for overdraft.
  3. Virtual player payment wallets
  4. Subsystem for token emission by developers
  5. Support for common monetization models
  6. A powerful engine of artificial intelligence that controls the ongoing transactions and scoring of the players.

The AI component is being developed to fight fraud, provide tournament games, score in the overdraft functions, cluster mobile applications according to user preference, build a compliance model and monitoring applications from the point of view of local legislation (adult content, gambling, etc.) and control the exchange rate of game currencies.

The BGX platform aims to support the entire economy of the mobile games ecosystem. The following segments of the economy could benefit from this emerging technology:

  1. BGX devs
  2. Node runners for off chain transaction validation, and data storage
  3. Holders/investors in BGX TOKENS.
  4. Ad Providers
  5. Game Distributors
  6. App Markets
  7. Game Developers
  8. Players

Mobile game players on the BGX platform will have a virtual wallet system which holds their BGX that will be used for all the games, to earn viewing ads, and to participate in tournaments.

App markets and game developers will pay a 10% commission on their revenue (this is supposedly 1/3rd of what App Store and Play Market charge.

Token

BGX uses two types of tokens: BGX and BGT.

BGX token is an ERC-20 standard that provides access to platform capabilities and supports its economy. Nodes will be required to have a certain amount of BGX to maintain their node status. BGX is also required in order to be in the “Loyalty Club” where 60% of the platform revenue gets distributed to holders based on how much they hold.

 token has a standardized cost and protects gaming applications from the volatility inherent in crypto platforms. According to the company, “It is a white label token, meaning it can be used on its own or a different name by the game or app market developers to use as currency for in-app and app purchases, hosting tournaments, or any other game incentives that allow players to earn from their playing time. All transactions within the platform use BGT Coins, which can be bought at the BGX Exchange using crypto and fiat currency at a rate of $0.10 USD / BGT Coin. Each BGT Coin is generated at the time of purchase. BGT Coins can also be sold back to the Exchange at the same rate. Each BGT Coin is burned at the time of sale.”

Total Supply of 1 billion

Distribution: 50% crowdsale, 25% development/incentive reserve, 20% founders/advisors/team, 5% bounty.

Fund usage: 50% development, 20% legal, 15% strategy/operation, 15% marketing.

Team

A total of three co-founders, seven managers and seven advisers make up the team.

Valery Khvatov (Co-Founder) is the CEO of DigitalXpert and has lots of experience leading a team of software developers. He seems to be the shot caller for BGX

Costa Zakharov (Co-Founder) previously founded a Canadian investment company called KNC.  His only endorsements on LinkedIn come from BGX colleagues.

Igor Mishenev (Co-Founder) is the former director of BELAZ, a heavy-duty haul truck manufacturer with up to ten employees. The BGX page says “Igor has co-founded several successful software companies.” However, his linked in and google search mention nothing about this…

The rest of management, look really average.

The official BGX World Twitter handle has 940 followers, which doesn’t seem like a lot, but they are genuine followers and most BGX  tweets receive 100+ likes and retweets.   The company’s Telegram has over 1,000 members.

Verdict

We have mixed thoughts about this project. It’s a fairly unique idea that will provide tons of value to every part of the mobile gaming community. The whitepaper is solid.  The team is sort of sketchy, and have yet to produce an MVP or even a Github presence. The community seems small, but passionate. They have very few quality partnerships, although it’s really early still.

Risks

  • Google Play on Android and the App Store for iOS are included in the default OS for most phones in the western world. It’s going to be extremely hard for BGX to get their foot in that door. Most Westerners aren’t even aware there are other options -1
  • Competition in crypto gaming is already fierce with over 100 projects on the market. Granted, most of these projects are related to esports, gambling and skins, which leaves space for what BGX wants to bring. However, if one of the big dogs in the gaming platform market decides to install a blockchain and some AI, that will pretty much crush BGX -1
  • If BGX underperforms during the ICO, it will greatly limit their potential. for example, if they don’t hit the hard cap of $50 million there will be no “Highly advanced self-learning neural network for fraud detection, financial transactions, game matching and services, Global sub-ecosystems for games, or Powerful multi-revenue channels for developers.” If they don’t raise $25 million, then the overdraft capabilities, the AI, the exchange module and the off chain processing will all be basic instead of advanced  -1
  • There is no MVP or demo yet, this is simply an idea until they produce. Also, there doesn’t seem to be a Github, despite this project being open sourced. -1.5

Growth Potential

  • It’s estimated that there are nearly 2 billion gamers in the world, and the entire mobile gaming industry will reach $60 billion by 2020. If BGX is able to tap into that, the sky is the limit. +2

  • The whitepaper, as well as this two-token system pictured above, prove the writer is seriously knowledgeable about blockchain. The loyalty club and nodes could bring tremendous value to early investors if this project is successful. +3
  • Partnerships: They list eight partnerships in their whitepaper, but only a couple of those seem to be actual partnership. The rest are just services that they are going to use to help build and market their technology. The strongest partnership is with DigitalXpert, which provides custom software development and IT consulting services with 150+ IT professionals located internationally. The other actual partnership, which BGX will team up with to create the platform, is called Infinity Games ( a relaxing puzzle games publisher from Portugal)… looks pretty weak. +1 

  • Instead of the usual 30% charged by Google Play type app markets, Developers on BGX will only pay 10% of their revenue as a fee. And 60% of that of that fee will get distributed to BGX holders as part of their Loyalty Program. +3

Disposition

This is a competitive space. BGX has no product. They have a well thought out and complicated tech idea, with an unproven team. 4.5/10

Investment Details

  • Presale: April 24 – May 15  https://bgx.ai/
  • Public sale: May 22 – June 19
  • Platform: Ethereum
  • Total Supply: 1 billion
  • Circ Supply: 500 million (unsold tokens will be burned)
  • Price: $0.10
  • Bonus: 30% pre-sale, 25% first 3 days public sale, 15% week 1, 10% week 2
  • Hard Cap: $50 million
  • Soft Cap: $4 million
  • KYC and Whitelist https://ico.bgx.ai/Account/Register
  • Whitepaper: https://bgx.ai/documents/en/BGX_White_Paper_1.0.pdf

Featured image courtesy of Shutterstock.

Author:
Joshua 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!