ICO Analysis: Confideal

Confideal is a smart contract builder, which makes creating and enforcing smart contracts as easy as it gets. Smart contracts are programs that record the terms of an agreement using blockchain and automate the steps of its fulfillment. There are many benefits that smart contracts bring over traditional contract law. Smart contracts help make transactions faster, better and safer. Since blockchain cuts out any middlemen smart contracts can reduce a number of transaction costs associated with contracting. Despite the obvious benefits, it is not easy to create and implement smart contracts without having the technical knowhow of the underlying blockchain. Organizations have to hire smart contract experts and coders to create their own smart contracts.

Confideal is a visual smart contract builder that makes creating, managing and enforcing smart contracts as easy as never. Confideal enables users with no coding skills to create an enforceable, self-executing and secure digital agreement powered by Ethereum for all types of transactions. In-built arbitration module allows to resolve disputes in the Confideal environment picking the top rated arbiters without any need to reveal your personal data.

Confideal already has an alpha version of the product, we have tried it and yes, it is very easy to create smart contracts!

There are many projects which are easing the process of building smart contracts. Etherparty and Blockcat are well known projects which have raised significant funds.

However the ease of building smart contracts is not the only value proposition that Confideal brings.

Confideal provides an option to resolve disputes without leaving the platform. The platform allows third parties: law firms, lawyers and mediators to settle disputes between users. These are highly qualified specialists that have the necessary skills and knowledge to work as arbitrators on the platform. They are motivated by the arbitrator’s’ fee which is paid for resolving a dispute up to 10% of the contract’s sum.

Disputes can arise in any type of trades so it is important to have mechanisms in place to manage arbitration. In case of disputes, the transacting parties have to approach third party arbitrators who are unfamiliar with the smart contracts and their specifics. By providing easy arbitration solutions, Confideal is creating an ecosystem which will streamline the process of creating and fulfilling agreements. This usecase is especially important for large transactions (B2B) and international trades.

Token

CDL (Confideal) – the internal cryptocurrency of Confideal platform. It is based on the
Ethereum blockchain and is the main payment method used by the counterparties.

As of now Ether and CDL can be used to conduct payments between two parties on the platform. A transaction fees of 1% is charged for transactions through the platform using Ether. The transaction fees is waived off if two parties conduct their transaction in CDL.
Confideal will convert the commission fees which they receive into other ERC-20 tokens to create a commission pool. CDL token holders can convert their CDLs into other ERC-20 tokens at a 33.33% discount of the ongoing conversion rate.

The ICO begins on 2nd November. A hardcap of $21 million is set for the crowdraise. The total CDL supply is 100 million with 74% of them being distributed in the ICO. 10% of the tokens will be kept for the team. Of the funds raised, 30% will be used for product development and maintenance, 25% for business development, 15% for marketing, and the rest for legal and operations.

There is a 25% bonus for the first 5% Ether collected during the ICO, 12% for upto 25% Ether collected. You can check out the details here.

The Team

Confideal team is 16 member strong. CEO and founder Petr Belousov has worked in finance based positions for multiple organizations since 2010.The CEO has been working full time on Confideal since mid 2016. Cofounder Andrei Baibaratsky has cofounded 3 other organizations in the past and seems to be quite entrepreneurial. An interesting thing about Confideal is that there are a 11 advisers supporting the project! Yes, thats a big number for an ICO. They include founders of ICOpromo.com, cryptopay.com, qiwi blockchain technologies along with a couple of law based consultants.

A dedicated team of 15+ members and a long list of advisers always adds to the credibility of the project.

Verdict

The core idea of Confideal is not unique, but considering the exponential growth that smart contracts are expected to achieve, there will be plenty of room for many companies which offer similar products. Confideal differentiates itself by supporting inbuilt arbitration functionality.This system will add immense value for larger organizations which transact globally with significantly large amounts. The alpha version gives us the confidence about the team’s ability to successfully create the product.

That being said, during this initial blockchain adaption phase, high competition will definitely have some impact. The project’s core value proposition of arbitration is critical for larger B2B based global transactions and not for smaller retail transactions. However blockchain’s adoption has not yet reached a scale where large global transactions are conducted over it. Significant marketing and PR efforts will be needed to convince businesses about the product’s usage.

Risks

  • As mentioned above, many companies are offering similar products.The core differentiator of inbuilt arbitration does not hold much value for retail and smaller transfers where the competition is high. -3
  • The project scores low on the “hype” factor. If sufficient funds are not raised in the crowdsale, it would be difficult to compete with someone like Etherparty which raised $33 million in their ICO.-2
  • Confideal supports only Ethereum based smart contracts. Going ahead, Ethereum might get disrupted by some other blockchain. -1

Growth Potential

  • There is a huge market waiting for companies like Confideal to explore. Usecases of the project can be found in almost every industry. +5
  • The marketcap at the time of the listing will be less than $30 million. There is some room for growth in terms of valuations. +4
  • We have tested the alpha version of the product and it works really well. The test version is open for anyone to come and evaluate. In contrast Etherparty’s test version is available on an invite only basis. +2

Disposition

We arrive at a score of +5 out of 10 for Confideal. The score seems valid after weighing in all the pros and cons associated with the business.

Investment Details

The ICO begins on 2nd November. Investors from the US, Canada and Singapore are not allowed to participate. You can join the whitelist here.

Featured image courtesy of Shutterstock. 

Author:
Aakash Kawale is a financial analyst based out of Mumbai, India. He is the lead analyst at a Singapore based organization and has extensive experience of analyzing US and Indian equities. Aakash is a strong advocate of the Blockchain technology and has been analyzing cryptocurrencies since 2015.