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ICO Analysis: Creativechain

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Blockchain 2.0 – using the blockchain for purposes other than simply register the movement of funds. The purpose of Creativechain is to allow digital creative works to be registered one time and become indelible – permanently the property of their creator or owner, in a provable way. From a financial standpoint, there are several possible utilities here, chief among them allowing creators to get paid regardless of who or where their content appears.

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The recent irruption of blockchain technology gives many possibilities for the registration and distribution of intellectual property without intermediaries.

Creativechain’s whitepaper correctly identifies that traditional media industries have not managed to harness the power of the decentralized internet. While they have managed to profit from things like Spotify, the sale of MP3 albums and e-books, they have failed to automate this and still rely on law enforcement to ensure their properties are not pirated.

Creativechain proposes to make a step toward ending this state of affairs. Creators would be able to register their work once on Creativechain, and then those who would like to enjoy the work or use it in other commercial applications can simply license it from the creator directly, in an automated way. If you’re a publication looking for some content, you could license a few articles through Creativechain, and a marketplace of competing authors could serve your need. It doesn’t always work like this in creative pursuits, of course, but the point is that a more equitable situation for creators is possible through the blockchain.

Creativechain incorporates all the advantages derived from the innovation of crypto coins. In this way, without the need to use bank accounts, purchases, micropayments or donations can be made to the authors of the registered contents.

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Creativechain will be paired with Creativecoin (CREA). These are the token of exchange on Creativechain. They will obviously be exchangeable for Bitcoin when altcoin exchanges list them.

The platform also aims to make the creation of decentralized applications easier for developers, so that platforms can be built on top of it in order to make the acquisition and distribution of content easier. Creativechain is a Scrypt-based Proof-of-Work network, meaning that people will be able to obtain CREA by mining, and miner rewards will be enhanced with the registration fee that all creative works will pay (.001 flat fee.) This fee is interesting because it means that all participants in the network will have incentive to see the network grow and prosper – miners will want more people using Creativechain so that more registrations are made; users will want more users so as to potentially make the value of their CREA and subsequently their works rise. The approach is novel and differs from Factom in that it 1) uses its own blockchain, rather than attaching data to the Bitcoin blockchain and 2) calls for the creation of a market. Combined with the ability to trade the token, therefore adding another element to the system: you, the speculator. All elements play vital roles, as in all markets.

Lastly, Creativechain will make it easy for people to utilize smart contracts. Think subscription fees. Without the middlemen of Paypal and the banking cartel, subscription fees can be more affordable. All types of digital content providers can benefit from something like this: “we got rid of our advertisements, can you pay a couple CREA a day for automatically-enabled access?”

The platform also has a concept called “Smart Actions,” which means that creators will be able to sell access to their content using a variety of methods. Presumably, for instance, a creator could sell the rights to something for non-cryptocurrency, and then issue a license to the lessee themselves. The overwhelming theme seems to be to enable the legitimate owners of content, rather than the publishing and recording powerhouses of old.

Who It Is

Creativechain is the brain child of graphic/web design veteran David Proto. Proto has been working around that industry since 2007, and he founded Comando Suricato, his current firm, in May of 2013. Since then he has worked for a few blockchain-related firms in graphic/web design categories. It is evident that he himself would benefit from a successful launch of Creativechain, given that he creates visually interesting and high quality artwork on a regular basis. In a recent interview, Proto said:

Creativechain is a platform with a clear roadmap whose goal is to be a free software tool of reference in the multimedia ecosystem of the new era blockchain. Throughout this year, we hope to see the use of the platform in the main audiovisual media (photography, video and music). Once Creativechain platform is consolidated, we will open new platforms connected to the blockchain of Creativechain. They will be specialized in the distribution of software, ebooks, blogs, newspapers and other means of cultural distribution.

Next on the founders list is Anna Nos Ripolles. She is also a co-founder of Comando Suricato, and has acted as an art director at a few organizations over the past few years. Her role or importance is relatively unclear, but presumably as an artist she plays a direct role in the look and feel of the Creativechain product.

Web searching her LinkedIn username reveals a bit more of her career, from before her listing on the site. For instance we find here that she is a highly competent desktop publisher.

That she and David are both artists lends some credibility to the platform’s intentions – it’s always best to try and solve one’s own problems first.

Last on the founders list is Vicent Nos Ripolles. Vicent appears to be the technological brain of the founder team, having worked in IT consulting as well as having previously funded and founded a co-working space called the Entropy Factory. He lists PHP, payment gateways, and electronic payments as his skills.

Unlike other projects we have reviewed here, the team includes mostly developers. That’s what you want to see when dealing with a technology product: more developers and actually useful workers than anything. The product doesn’t reach market at the behest of the “social media manager” after all. Making up the rest of the team we have 4 developers, 1 system administrator, and 1 strategic communication guy. This last guy likely plays the very difficult/important role of reaching out to content makers like Hacked.com and attempting to get them to use the platform.

The Verdict

The author will be eating his own dog food on this one, and entering the crowdsale personally. This does not automatically earn this crowdsale a 10 on a scale of 1-10. The merits of this project, and the need of it, are known very well to the author. So as not to pollute the rating, let’s look at some of the negatives of this project before delivering the verdict.

  1. The role of Creativechain could be played by a competent Counterparty or Ethereum project, eliminating its novelty. On the same note, Factom could simply expand to do everything Creativechain intends to do. It certainly wouldn’t fall outside of their mission of “making the world’s systems honest.”
  2. Creativechain uses a Scrypt proof-of-work mining algorithm. While this is good for miners, it has to stay good for miners in order to avoid difficulty surges and valleys. Many altcoins experience periods where, right after a large mining outfit disconnects from the network, no one remaining has the hash power to mine another block for hours until the difficulty drops. One hopes Creativechain will be aware of this hazard and implement smarter difficulty adjustment alogrithms as a result, since accessibility of the content and payment rails is of the utmost importance.
  3. Too much of the communications seem to be based in Spanish language. Nothing against Spanish speakers, but the language of money in our current times is most definitely English. If Comando Suricato is entirely serious about their project, they will hopefully contract with communications people in English-speaking countries to more clearly communicate their message to the money centers. The whitepaper itself is clearly not written by a native English speaker, but this should only become a problem if competing projects reach fruition before Creativechain has a chance to mature.

These things notwithstanding, we’re going with a 7.3 on this one. Like all altcoins, it has the potential to tank in value, but the utility would still be there. This tank in value would affect you mainly if you entered in at the crowdsale level, otherwise it would be a benefit for you. So you may just want to wait until it gets listed on exchanges, and catch it on a downward movement, if you believe you’ll have a use for the coin. As far as pure speculation goes, you’ll want to limit your investment here pending the future, but active trading, rather than passive holding, could net you a tidy profit once the thing goes live.

Investment Details

Just under 8 million CREA are available for another couple of weeks (roughly). Unlike most ICOs, you can buy CREA with a bank account. That they are making their identities known to the banking cartel is a major plus in terms of safety, since no sane scammer would do as much. You can, of course, also use Bitcoin.

If you enter the crowdsale via Bitcoin, make sure you have control of the wallet you use – do not use Coinbase or some other Bitcoin bank, because in the event that the ICO does not take off, your refund will be sent to the address you sent from (minus 2%). Once you’ve made your investment, you can claim your CREA on May 1st. The wallet is already available for testing:

You can’t buy a specific amount of CREA in the Crowdsale. The way they are doing it, the 7,947,316 CREA that are being sold will be distributed amongst the investors by how much they invested. So if 100 people invested and you invested 20% of the group’s sum investment, you would get 1,589,463.20 CREA. Currently around 70 people have invested roughly a little over $10,000 in bitcoins. Bank investments are obviously not public in the same way. This makes the current value of each CREA about 70 satoshis.

Featured image from 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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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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ICO Analysis: Virtue Poker

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The game of online poker has been massive ever since amateur Chris Moneymaker turned a $40 online satellite entry fee into a $2.5 million, 2003 World Series of Poker Championship win. Over the years, two massive flaws involving centralized online poker sites have come to light. In 2008, Ultimate Bet insiders stole over $20 million in players funds by using a software program called “God Mode” which allowed them to see the other players hole cards. In 2011, it was revealed that Full Tilt Poker (the#2 site at the time) was a giant Ponzi,  involving insiders lining their own pockets with funds picked from their loyal players’ pool. Full Tilt was forced to shut down and players didn’t see their money for over a year. New startup Virtue Poker is looking to provide solutions to both of these problems, plus many more.

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Founded in 2015, Virtue Poker is putting poker on the Ethereum blockchain and using smart contracts to eliminate fraud and corruption by completely decentralizing the game. The virtue poker platform will offer several game changing features including tamper proof gaming, security of player funds, instant payouts and guaranteed tournaments.

Each table is represented by a smart contract. All players send funds from their own personal digital wallets to the smart contract that serves as an escrow agent. Once the game is over the contract distributes the money back to the players wallets. All game play happens off-chain using a secure implementation of mental poker. The Virtue team also designed a revolutionary  shuffle algorithm called the “Two Pass Shuffle,” which guarantees nobody can tamper with the cards.

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Learn all about the tech behind “mental poker” and “the Two Pass Shuffle” starting on page 17 of the whitepaper.

Token

VPP token has four utilities:

  1. It can be used as in game currency.
  2. It can be used for special tournaments.
  3. It can be earned as rakeback.
  4. It can be staked in a smart contract called a “Justice Registry,” which enables the staker to validate hands on the network in

The Virtue platform acts as a POS platform. The nodes in the platform are called “Justices”. “Justices are non playing peers, assigned to poker tables, who provide security and protection to players on the virtue poker network and in exchange recieve fees from players platform fees. the justices validate and submit the hand histories for storage to IPFS.”

The token distribution is as follows:

  • Crowdsale 20%
  • Second token offering after main net: 20%
  • Marketing and development: 20%
  • Founders: 17.2%
  • Strategic Partners: 18.8%
  • Advisers: 4%

Approximately 40% of proceeds will be used to further platform development, 40% for marketing, 10% for legal costs, 5% for consultants, and 5% for business development and partnership

In terms of price, everyone pays the same amount per token. The exact price per token will be set once the ICO is over. If the hard-cap is reached, the price will be $0.125; if they only reach soft-cap the price will be $0.06 or higher. (Contributing early doesn’t give you a bonus, it just assures you get a spot in the sale.)

There has never been any pre-sale or bonuses given. Every contributor gets the same deal.

Team

The Virtue team, advisers, and sponsored players are all rock solid.

Co-Founder Ryan Gittleson (ConsenSys) is the team spokesman. He has done several YouTube interviews where he proves himself very knowledgeable and capable.

Co-Founder Jim Berry has experience with NASA and a ton of tech ventures.

The CMO Dan Goldman, who was the first CMO for Pokerstars, building them up to No. 1 in the world.

One of their most notable advisers is Joe Lubin, who co-founded Etherum.

They also have a 7+ strong tech team led by Chief Cryptographer, Iddo Bentov (Cornell).

Finally, we have three poker legends to help market the site.

Verdict

Virtue Poker is by far the front-runner in blockchain poker. Their well thought out business plan, strong team/advisers and the three living legends for spokesmen guarantee they will at least be around for a few years to come. Success is going to first depend on building the app to perfection. And then on convincing players just how beneficial it is to move over to the Virtue platform.

“Our #1 value proposition is the security of player funds by not having to trust a centralized entity with the deposit or withdrawal process.” (Co-Founder, Ryan Gittleson)

Risks

  • Poker players hate rake, and it looks like Virtue’s rake will be higher than average. This summer, they plan to implement Plasma to calculate every hand without using ETH, only sending transactions to the blockchain when players sit down and when they leave. It’s still going to be pricey though and Virtue will be taking an additional rake each hand for business. -3
  • Gaining large scale adoption will be extremely challenging. Bovada and America’s Cardroom control the U.S. market while Pokerstars owns the rest of the world. Also, ACR recently started accepting a number of cryptocurrencies, which is one of Virtue’s main appeals. -3
  • Currently, the platform’s player to player shuffle technology is only performing at 70-80 hands per hour. This is very slow compared to the mainstream sites. Players these days play for money; the more hands they can get in per hour, the more money they make. They aren’t going to play on Virtue if it’s slow and complicated. -2
  • They don’t have a gaming license yet. They’ve been working for 18 months and are making progress in Malta and Gibraltar. They don’t want to promise anything, but are very optomistic about Malta by the end of the year. -2

Growth Potential

  • Phil Ivey, Dan Coleman and Brian Rast are constantly in the poker spotlight. They are literally the top guys in poker. They will be wearing Virtue logos as they win tournaments. Every poker player in the world will know about Virtue Poker. +4
  • Their solid technical team, strong management and Joe Lubin (Co-founder Ethereum/giant whale) as an adviser make it very hard to bet against this project.+4
  • The massive U.S. player pool has been banned from Pokerstars since 2011. They have found new sites to play on over the years, but nothing permanent. If Virtue can use their decentralized site to tap into the U.S. market, it could be glorious.+2
  • They are backed by ConsensSys, which is a global formation of technologists and entrepreneurs building the infrastructure applications and practices that enable a decentralized world. ConsenSys funded Virtue Power, helped them put together a team a team and supported the development of an alpha. At the end of the token sale, Virute becomes their own company and ConsenSys remains a passive investor.+2
  • The token price itself probably won’t ever be extra valuable, but if you can stake a large supply, it would be like running a masternode. Virtue Poker has a chance to be around for years to come, so a node on their site would be steady passive income for years to come +3

Disposition

This ICO is for folks who want to stake VPP tokens and become Justices (nodes). A score of 5/10 is warranted.

Investment Details

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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4.2 stars on average, based on 9 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: XYO Network

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Traditional location service providers, like the common GPS system, which is a project under the jurisdiction of the United States Air Force, are now facing multiple problems regarding their operational capabilities, that are constantly being left behind as technological advancement improves by the minute.

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There are various issues with the current GPS system, including the fact that it is a centralized service, fully controlled by the United States Army. GPS systems can experience a single point failure and result in a non-functioning service, the signal is not accessible by underground locations and sometimes even by indoor locations, urban density increases signal multipatch, energy-intensive components are not tailored for devices with long maintenance cycles. Traditional GPS systems are also volatile against signal jamming and spoofing.

Back in 2016, during the second annual Ethereum developer’s conference in Shanghai, Eleftherios Karapetsas introduced the concept of Proof Of Presence and its functionality. Today the concept is an Ethereum backed protocol called Proof of Location and it’s being used by a dozen of start-ups who are striving to disrupt the monopoly of the location tracking industry.

One of these innovative projects would be definitely XYO Network. The network they are trying to build will be composed of “Sentinels”, (devices that serve as transmitters) communicating with “Bridges” (location data transcribers) and then “Archivists” (databases), concluding to the Diviners (oracles) that give you the answer to your request.

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For example, you own a car rental company and want to review the location of all cars at your disposal. You simply make your request to the Diviner who then collects the data gathered from the Sentinels, transports them to the Archivists through the Bridges. A complex mechanism compares the data gathered at the Archivists as well as data from other Diviners to ensure the accuracy of the answer you will be given. Once the answer is the best answer, meaning that it is as accurate as possible according to the XYO Network, the answer to your query will be revealed.

XYO is not your ordinary blockchain-powered start-up. They are present in the industry since 2012, from when they managed to spread 1,000,000 beacons all over the globe. Now they are planning to deploy over 1,000,000 more microdevices, satellites, and sticker-based trackers (using RFID technology) and they even plan on expanding their Network to Mars.

From Location tracking to IoT and Mesh networks, XYO Network’s use cases affect multiple industries including eCommerce, Medical, Rental Car Agencies, Commercial Airline Logistics, Insurance Agencies, National Security Agencies, and Drone Package Delivery Systems, among others.

Token

The XYO token, which is the network’s native currency, is a utility token used to purchase ultra-specific geo-location data, exchange, and/or sell and buy location data, as well as rent your tracking information to the XYO Network in exchange for XYO tokens.

You can use the tokens to purchase various products and services coming with the XYO platform or translate them into major cryptocurrencies like Ethereum (ETH) from where you can find a gateway to Fiat currencies or other cryptocurrencies respectively.

The total amount of XYO will be determined after the token sale since any unsold tokens will be burned and not additional XYO tokens will be generated in the future.

The starting price will be equal to 1ETH = 100,000 XYO, while the price per unit will be maxed at 1ETH = 33,333 XYO. The exact price per XYO is yet unknown since Ethereum’s price is constantly shifting. One thing is certain, and that is XYO Network’s goal to reach a capital of $48 million at the end of the public sale.

Team

Arie Trouw (Founder & Architect), who started writing software with his TRS-80, moved from Atari to Apple and Microsoft during his early career days. He is an experienced serial entrepreneur with multiple companies under his signature raising 8-digit capitals.

Scott Scheper (Co-Founder & Head Of Marketing), started working for Arie Trouw back in 2009. In 2013, he launched Greenlamp, a programmatic advertising agency focusing on direct-response media buying. In the first year of its operation, Greenlamp managed to generate over $12M in revenue.

Markus Levin (Co-founder & Head of Operations) has over 15 years of experience in building and managing several companies around the globe. He is the one who utilizes the talents of every employee and gets the best out of his team.

In the board of advisers, we can find among others Tom Kysar (Advisor – XYO token market economy), who is the operations lead at Augur and has ties with Ethereum, and Raul Jordan (Advisor – XYOMainChain Scalability) who received a Thiel Fellowship after dropping out of Harvard.

In general, the team looks solid and professional, with a board consisting of over 20 people all specialists in various spectrums of the location tracking industry, blockchain technology, and information technology.

Verdict

Proof of Location, in general, is a very disruptive concept and within a year we already have individual companies with their own platforms based on the initial protocol.

XYO is not a newcomer when it comes to technological marvels. But they are the first to integrate a big spectrum of location and information services all into one single blockchain-backed platform.

The XYO Network consists of a series of physical, digital, hardware and software products and services that will eventually be able to communicate with each other using the XYO Network.

Of course, it would be a challenge to compete with the U.S. Army, the provider of traditional GPS systems, but we already have seen what blockchain did to banking and even governmental institutions, this shall be not a problem for XYO if considered with accuracy.

Risks

From an investor’s perspective, the following facts are important to consider when weighing XYO Network:

  • XYO Network plans on competing with one of the most difficult players in the industry, the American Army. Of course, Proof of Location is a unique innovative concept that will alter the way we interact with location services in the future, but it won’t be an easy task to fulfill. -2
  • Establishing a complex network relying on multiple concepts including Internet Of Things (IoT), Mesh Networks and location tracking services can be challenging and really difficult to maintain. XYO must prove itself before attracting serious investments. -2
  • The XYO Network is not only highly complex, but also very expensive and requires a significant amount of time to be deployed. Therefore early investors will have to be patient in order to see some interesting growth generated by their initial investment. -1.5

Growth Opportunity

  • On the other hand, Proof of Location as a concept is one of the most revolutionary ideas not only in the sphere of blockchain but in disrupting technologies overall. XYO Network among other start-ups who are focusing on this new protocol might be exactly what we needed to escape the American Army’s “Big Brother”. +1.5
  • A real-time location tracking system that relies on multiple systems, hardware and software is going to be absorbed by the logistics industry in no time. People could track their physical or digital assets in no time with extreme accuracy that will indicate not only the exact location of the desired package but also its travel/exchange history, current condition and more. +3.5
  • The XYO team is consisting of professionals who have proven themselves at work in the previous decade generating accurate business plans that led to extraordinary profits. +3
  • The Proof of Location concept is backed by various industrial companies and individuals both in the blockchain and traditional markets scene, including Ethereum’s own Vitalik Buterin. After all the concept was created by young Ethereum’s engineer, Eleftherios Karapetsas. +2.5

Disposition

As previously mentioned, XYO might sound like an ideal futuristic project, but it will require a lot of time, energy and funds in order to achieve its goals.

Traditional ICO investors usually invest for fast profit within six months or a full year. XYO is definitely not the solution for these investors, as it might need more than a couple year to grow into a fully developed and functioning product.

The closest project to XYO that we could think of would be IOTA, without a doubt. It’s a long-term (if not the longest) opportunity, but it requires patience and understanding.

A score of 5 out of 10 is reserved for XYO Network, based on present facts.

Investment Details

  • Type: Crowdsale
  • Symbol: XYO
  • Platform: Ethereum
  • Pre-Sale: Mar. 20, 2018
  • Public Sale: May. 20, 2018
  • Payments Accepted: ETH (KYC Required)

 Official Website

White Paper

Disclaimer: The writer has no position in XYO Network at the time of writing.

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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ICO Analysis: Nezly

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Nezly is an online marketplace that connects legal Marijuana dispensaries with suppliers and customers built on the Stellar blockchain. Nezly plans to leverage the capabilities of the Stellar blockchain to:

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  1. Facilitate payments
  2. Allow for transactional data to be recorded on the blockchain so that a historical snapshot is visibly transparent and immutable.
  3. Create a transparent ecosystem that is more secure and convenient buy having both buyers and sellers information verified in a decentralized fashion.

Despite seemingly being committed to building off of Stellar, the Nezly team bizarrely stated in their whitepaper that, “We are currently looking into new technology provided by IOTA (Internet of Things) that uses a DAG (Directed Acyclic Graph) or “Tangle” that structures a ledger in a tree formation to allow for faster lookups and better scalability.”

This gives this Analyst the impression that the authors of the whitepaper are merely namedropping Blockchains they deem fashionable in an attempt to look knowledgeable rather than expressing any specific business use case for the technology.

There are four main products that Nezly is developing within their ecosystem

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1. CannaX, or what they dub “the wholesale Cannabis exchange.”

They envision this as a place where growers, dispensaries, labs, and transports connect, gain data insight, and perform transactions.

In practice, this would work based on user participation in the platform.

For instance, a dispensary looking to buy product could obtain data on what’s popular, what’s selling, and what isn’t.  Meanwhile, farmers would also know what to grow based on what’s selling to dispensaries.

This would theoretically yield increased efficiency and exponential growth to the industry as a whole.

Another important feature of CannaX is what the whitepaper describes as, “A true seed to sale timeline” documented on the blockchain.

This entails an “easy to use tool” for Farmers to record what growing products are being used, images of all the growing stages throughout a growing cycle, and the ability to upload lab test results of the completed plants.

Dispensary buyers would have access to this data after the purchase of a product. They would then be able to provide their customers with superior information on where the products came from, what methods were used to grow them, and lab testing validating the quality of the products themselves.

The customers would be able to access this information by scanning a QR code.

The whitepaper did not elaborate on how this would work for customers in detail.

CannaX would also provide remittance services. They state that the Nezly token (NEZ) would also be utilized to charge Nezly’s fee for service, or FFS.

The remittance amount would determine the fee charged within a range of 1.5-3% of the total transaction.

They also state that they will create several remittance technologies themselves capable of handling large transactions in an effort to reduce the volatility of the NEZ token once it’s listed on exchanges.

They also state that they have proprietary intellectual property to assist with this, but do not elaborate upon whether this has already been created or is merely aspirational on their part.

Nezly does, however, state that they would run their own Stellar Core nodes for increased reliability of their token.

Their stated reason for building CannaX and the NEZ token on Stellar rather then Ethereum is the superior transaction speeds of Stellar’s network.

2. White Labeling & Branding Services Of The Nezly Mobile App By Dispensaries

This allows for the creation of custom dispensary-branded apps that customers can use to order cannabis products from their Dispensary of choice with Nezly tokens storable on a wallet within the app.

For customers, Nezly thinks the ability to have accurate & live-synced inventory data of what products are actually in stock will lead to decreased frustration and therefore increased brand loyalty to a given dispensary.

According to the whitepaper, dispensaries would also able to “interact with customers through real-time interactive comments.”

How this is different from other methods of supposedly “interactive” communication such as SMS or instant messages evades the understanding of this analyst.

These white-labeled apps will also provide dispensaries with up to date pricing and purchasing trends information from the CannaX exchange.

3. Nezly Buddies

Nezly Buddies is described in the whitepaper as, “An international social engagement app connecting Cannabis partakers together.”

They describe the app as having swipe features analogous to Tinder, while also having separate sections for

  1. Nezly Buddy Events
  2. Gamification Rewards
  3. Product Voting Polls

They will also offer an upgraded premium version of the app that will feature:

  1. Live Member Video Chat
  2. Member Messaging
  3. Member To Member Gifts

Nezly plans to release this app separately from the main Nezly app (the former of which can be white-labeled by dispensaries).

4. Nezly Wallet + Nezly Card

They further state that this is to ensure the app stays as “lightweight and functional as possible.”

Nezly already has beta versions of its mobile wallets for both Android and iOS.

Windows, Mac OSX, and Linux native applications are also in development.

The Nezly card will work by allowing users to load Nezly tokens onto it and use it like any other credit/debit card.

There are some interesting security features specific to the card, however. These include:

  1. Version ID: Denotes the version of the card and what format it will use.
  2. Region Code: A code base on proprietary numbers set forth by Nezly.
  3. Crypto Wallet Checksum: A proprietary checksum that can be used for additional security to verify the Nezly wallet associated with this card.
  4. Nezly App Account Number: A special encoded number based on the user’s actual ID in the system which is generated after signing up for the Nezly app.
  5. Checksum: A Standard checksum similar to other credit cards.

All Nezly Wallet applications will work in tandem with the Nezly Card. Specifically, the Nezly Card has its own hot wallet that the user would load Nezly tokens onto from their software wallet.

It should be noted that although Nezly Wallet applications are immune from any tampering from Nezly staff by the nature of the blockchain, the Nezly Card is only functional because Nezly will act on behalf of users to facilitate payment.

Token

The Nezly token, or NEZ, is the lifeblood of the entire ecosystem. It is the transactional currency customers will pay dispensaries with. It is what dispensaries will pay suppliers with. Essentially any transfer of valued data that occurs within the platform in any capacity is done using NEZ tokens.

The total amount of NEZ tokens is 240,000,000 Of this amount, 168,000,000 tokens total, or 70% of the total supply, will be available to the public via crowd-sales.

The crowd-sales will be divided into three rounds for the NEZ token:

  1. Presale: 36,000,000, or 15%.
  2. ICO: 84,000,000, or 35%
  3. Public Sale: 48,000,000 or 20%

According to the whitepaper, if the hard cap of tokens sold during the pre-sale is not reached, Nezly reserves the right to extend the closing date up to thirty days three separate times.

Any unsold tokens of the 120,000,000 set aside for the presale and the ICO will be burned.

The Public Sale tokens (they label it very confusingly in the whitepaper) are reserved for sale to the public at market prices to facilitate transactions on the Nezly platform once the ICO is over.

Team:

The Nezly team is fairly large. Upon first glance, they seem fairly capable. In this analyst’s view their weakest player is their CEO, Cory Kelly.

The whitepaper describes him as an accomplished and awarded UI/UX designer who has designed for prominent companies such as Nike and Spotify.

Upon review of his Linkedin however, I determined that he was a contract worker for Nike for three months, and a contract worker for Spotify for three months.

These are not nearly long enough periods to demonstrate his true capabilities.

It does appear that the team has recruited a large amount qualified developers and advisers. Notably, they have a prominent biomedical research who specializes in analytical chemistry as an adviser.

Given their emphasis on providing product quality (including lab testing) on the blockchain, it is good that Nezly seems to be seeking truly distinguished expertise. What bothers this analyst is that the core team itself (especially the CEO) seems underwhelming for a project of this scale. The CEO’s influence can clearly be seen in the mockups of the UI, which admittedly does look sleek and easy to use.

Verdict

The cannabis industry is as nascent and untapped a market as the Cryptocurrency industry itself.

In many ways, solutions relying on blockchain technology to meet the needs of an emerging Cannabis industry that struggles to obtain basic banking services and credit card processing seem obvious.

It is apparent that Nezly put forth an interesting proposal envisioning what blockchain technology could do to streamline the Cannabis market.

But in the view of this analyst, their business model fails on a variety of levels.

In essence, Nezly suffers from the issue most new marketplaces do, that is, “the chicken and egg problem.”

For Nezly’s ecosystem to have any value to any participants, there have to be enough participants to generate valuable and actionable data.

For instance, their CannaX Exchange is premised on the idea that the sharing of dynamic product supply & demand information will be valuable to dispensaries and growers because both parties will use the data to make better and more valuable decisions.

But what happens if there aren’t that many dispensaries or farmers to draw data from?

That results in a limited pool of data that does not necessarily reflect the broader market accurately.

To their credit, Nezly seems aware of this and talks up their connections in the Cannabis industry, seemingly to demonstrate that they will have many partners signed up quickly.

But this remains to be seen and is a big IF that may singlehandedly determine the success of their platform.

In addition, while it is currently difficult for Marijuana businesses to access banking and credit/debit processing services, it is not impossible.

The political climate is also steadily heading towards full decriminalization.

Hypothetically, if the legal floodgates opened for standard banking & payment services to service the Marijuana industry tomorrow, I don’t see this platform being able to offer enough value to most businesses to differentiate themselves.

Another huge issue I see with their business model is their focus on making white-label apps for each individual dispensary to use themselves.

In my view, this is the quintessential example of what happens when companies think that everything and every product is better if it’s in some way decentralized.

Consumers don’t want to order from a million different mostly identical apps that only each work for one dispensary.

They want to order from one app that has all potential dispensaries in one place.

That’s why when a customer wants to order takeout food, they use Grubhub or Seamless or a competing platform which offers them all the restaurants they could order from in one application.

The idea that an average customer would download a separate app for each dispensary they would ever want to order from is so ludicrous that part of me is shocked it made it into the whitepaper.

Nezly is missing the forest for the trees.

Risks

  • No guarantee that Nezly will get enough ecosystem participants to generate valuable data. -5
  • A frankly moronic approach to consumer-dispensary interactions. -5
  • A CEO that seems more skilled at exaggerating his capacity to make things look pretty then he is truly making a sustainable platform. -3
  • It seems like they just took a bunch of blockchain related terms, put them in a hat, and picked one at random to inform how to build their platform. -2.5
  • The whitepaper says that 10% of the total token supply will be retained by the Nezly team but that 20% would be put into the Nezly reserve. What this reserve will be used for according to the whitepaper is “future distributions, project initiatives, or promotions.”
  • They also describe it being used to, “help address issues surrounding fluctuations in the circulation of Nezly tokens that might otherwise impact the ability of Nezly tokens to serve as a useful medium of exchange. To that end, we may use Nezly reserve to purchase or sell Nezly tokens on the open market, burn, or lock, a percentage of Nezly tokens in escrow if it is deemed necessary.” So in reality, they have given themselves full control of 30% of the coin supply with no lockup period whatsoever and only a vague suggestion of what they will do with it moving forward. That is a huge red flag that could suggest a possible ICO pump and dump scam. -6
  • Their whitepaper is riddled with typos and in one section even repeats two identical paragraphs. -3

This can be seen here:

-24.5

Growth Potential

  1. The low token supply means that it wouldn’t take a lot of capital to raise the price significantly (When combined with the red flags suggesting an ICO pump and dump scam, this might not be positive.) +4
  2. The platform does seem to have a beautiful UI +4
  3. The CannaX exchange as described does seem to be a potentially very valuable product for the cannabis industry as industry standards begin to formalize. +3.5
  4. Although the political climate may change swiftly, it hasn’t fully yet, and they may have an easy sales pitch by Nezly for dispensaries who don’t want to deal exclusively in cash (a major headache.) +5

Disposition

We arrive at a score of -8/10 for Nezly.

Although it looks very impressive at first glance, the entire project falls apart under closer scrutiny, and may even be a scam.

In short, Nezly is half-baked.

This article should serve as a reminder for all Hacked readers to do their own research and not rely on one short article to determine whether or not they should make an investment.

Investment Details

  • Token Type: Utility
  • Platform: Stellar Lumens
  • Symbol: NEZ
  • Token Supply: 240,000,000
  • Token Crowdsale Prices: Presale: 1 NEZ=.20 USD ICO Round One: 1 NEZ=.25 USD ICO Round 2: 1 NEZ=.30 USD
  • Hard Cap: $7,200,000 For The Presale & $23,200,000 For The ICO
  • Minimum Purchase Price: Presale: $1000 USD. ICO: 100 USD.
  • Accepted Crowdsale Payment Methods: Stellar Lumens, Bitcoin, Ethereum, USD.
  • Public Sale: Apr. 20, 2018.
  • Jurisdictions Barred From Participating: Unclear from Whitepaper.
  • Website: https://nezly.com
  • Whitepaper: https://nezly.com/Nezly-Whitepaper.pdf

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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