Hacked: Hacking Finance

ICO

ICO Analysis: Exscudo

Posted on .

ICO Analysis: Exscudo

Introduction

Exscudo is a mix of legacy and cryptocurrency-based financial tools for global finance. Its token is EON and its ICO begins on April 25th. Currently, early investors get a 10% bonus and are able to invest for about .0002 per EON. Exscudo stands for “exchange” and “escudo,” which was the currency of the great Portuguese empire.

“We have combined the best practices from the centralized and decentralized approaches,” Exscudo CTO Alex Sitnikov says in a video introduction of the platform. According to him and his team, the centralized exchange built into the Exscudo platform is not a red flag for cryptocurrency enthusiasts, but instead a “source of liquidity.” But, all exchanges are sources of liquidity, are they not? And wouldn’t the point of being “open and compatible” be to provide a dumb pipe for transactions to travel down, without the need of the token’s developers – at all?

The public face of Exscudo is incredibly well polished. A dense 47-page whitepaper outlines the project. In this document, Exscudo purports to not be a competitor of Bitcoin, Ethereum, or anyone else – rather, their purpose is to provide “flexibility” that these platforms do not. This begs immediate questions, because the statement “existing blockchain systems could not give us enough flexibility, functionality and independence from third parties” requires significant qualification to ring true. In what way, for instance, does creating a new third-party platform solve the problem of reliance on third-party platforms? Users are simply now relying on this untested third-party.

The whitepaper is not dishonest, however. It notes that the EON blockchain is not particularly better – their reason for creating it was a matter of independence.

… it enables Exscudo to be independent and launch new functions when it is needed.

These things may not be a total project killer, though, because the project seems to have a myriad of goals. Let’s go over them.

1. Enable easy transactions for users without much technical expertise.

This goal is shared by a number of other projects released in the past several months, including Humaniq and Cosmos. That this market is becoming more crowded is not necessarily a drawback, but novelty is important when it comes to driving value toward a single variable. A similar goal of the project is to offer fiat debit cards to users, something which took several years for other new world currencies to develop.

2. Make it easy for miners to get from mining to cashing out.

Exscudo offers a large range of cryptocurrency pairs to trade in comparison with the mainstream crypto-currencies and fiats. It offers extended functionality for trading (mobile platforms, web-platforms), ease of withdrawal to fiat, reliability (developed technology to protect against DDOS attacks) and protection against hacks.

It appears that the EON blockchain itself is a separate project from the Exscudo Exchange and related services, but they use EON. It seems that a version of proof-of-stake is used to mint blocks, with users being required to put up funds in order to process transactions.

3. Provide an API for merchants.

Merchant APIs are still a rarity in the Bitcoin world, with only a few main players including Bitpay. Having this from the outset as a core-developed project is a value add. The Exscudo merchant API would allow the acceptance of Bitcoin and other cryptocurrencies into the Exscudo ecosystem.

4. Provide reliable trading platforms for international private traders as well as institutions.

5. Offer a secure messaging application.

This project is already in the works. Like Exscudo Exchange, it uses the EON blockchain to function. Others could presumably built in competition with it. There is a booming market for secure messaging, and no serious blockchain-based plays have previously come about. Channels could become an investor’s Signal app, and could rightly be the only truly valuable offering here.

Who Is Behind Exscudo

For this article, we’ll focus on the figureheads. As previously stated, the platform has a very polished look and feel, which can be credited to the front end team. In our modern age, this does not necessarily mean anything at all. Good web developers are increasingly common, to the point that the industry is moving to a self-service model by and large.

Owner and the CEO of Exscudo. With over 18 years of experience in IT technologies and their integration into the real sector of economy he has worked on managerial positions for more than 8 years now. He is a consulting expert on DAPPS Ethereum and consults major Russian financial market players on cryptocurrencies trading. Andrew is an expert on blockchain technologies and decentralized cryptographic data transfer networks.

According to LinkedIn, Andrew Zimine is Estonian, an alumni of Vyatka State University, and has served almost exclusively in executive capacities throughout this career. He lists Java as a skill, and must have used that much more between 1997 and 2002 when he worked as a “specialist engineer.” It is hard to reconcile the claims of his public-facing bio with his LinkedIn resume.

Next up, we have Alex Sitnikov, from the video. Sitnikov worked for Big Blue (IBM) from 2007-2010. This is a big plus in terms of his understanding of how large organizations operate and use money. He appears to have attended Vyatka State University at a time which overlaps Andrew Zimine’s – which might explain how the two met. He is eloquent in his expression of the project, and if the project takes off, will be a valuable asset in terms of professional communication.

Then there are several lead developers, presumably in charge of hiring others who do not make the list. To credit for the amazing web design is one Aliaksandr Zahatski, who previously had an executive role at a “major e-commerce company.” Some research reveals that this company was VZV.su, an apparent Eastern European answer to Zappos, but only for shoes. From this side of the pond, it’s hard to determine the validity of the use of the term “major,” but one thing is for sure: this fellow knows how to make clean websites that are appealing to consumers.

The Verdict

It is not looking good for Exscudo. Perhaps the author is salty, having covered dozens of scams and failed cryptocurrency projects over the past few years, but there are some seriously severe drawbacks to Exscudo which are not sufficiently addressed. Let’s go over them in detail before pronouncing a safety rating on this ICO.

  1. Closed-source?! One of the fundamentally important things about cryptocurrency and cryptography in general is that code is open for review by security researchers around the globe. Much of the Exscudo platform, and the Eon blockchain product, are going to be closed source. According to them, this is for security. This alone is sure to earn it bad reviews from cryptographers and cryptocurrency experts, as well as developers who might otherwise have been interested in building products for the ecosystem. This is not 1996. If it’s not open, there has to be a good reason, and “because security” doesn’t pass the bar. Nevertheless, for those who want to be more forgiving on this score, the whitepaper does note:

    We will publish the source code concerning consensus rules, coin emission and block confirmation on GitHub. The description of the mathematical model is available in the EON whitepaper on the site eontechnology.org.

  2. Limited novelty. Hacked readers already know that this is not the first “integrate all the coins” solution, and surely not the last. Exscudo needs to have some serious partnerships, on the scale of BBVA or the World Bank, in order to really set itself apart. Unfortunately, it is not boasting such.
  3. Murky team. So you say, “Satoshi Nakamoto was anonymous. What does it matter who is building these projects?” Typically, on this score, you would be right. But Exscudo demands to know your identity in order to use the platform fully (which could be seen as a plus for regulatory issues), so you too should demand to know more about its backers. They claim to have around $6 million invested of their own money, but this also begs the question of why not just sell the coins on an on-going basis, instead of using the ICO model? There are a lot of unknowns in their team portfolio, and this could lead to scaring off would-be other investors besides yourself.
  4. Large pre-mine. 35% of the total coin supply will remain with the Excsudo team. This is absurd and almost begs the question of why create a currency at all. If 35% of the US dollar were in the hands of less than 10 people, would it even be considered a currency? We may have a situation where most of the “wealth” is controlled by a few, but this wealth amounts to far more than just their currency. By that metric, Exscudo is far more extreme: 35% of the currency as well as the entirety of its liquidity is centrally controlled. Are they sure they’re utilizing decentralization appropriately?

These factors are all very serious. They do not necessarily spell out a scam, but the thing could easily go that way! These factors combined, while comparing Exscudo to competing plays (such as Humaniq), make its monetary safety rating very hard to upgrade beyond a 3.9.

The author could be wrong, and you might get lucky, but what we’re looking at here is something that most traditional investors could determine they do not need and that any cryptocurrency expert would run away from. The idea may be noble: make it easier for traditional investors to get into cryptocurrency, but we have such offers on the table already or in progress via ETFs and professional-grade trading platforms like Gemini or Bitfinex.

Again, the author could be wrong. As always, this is only one person’s view. Other viewpoints so far seem to be overwhelmingly positive, but one must keep in mind how easily some “journalists” are bought off in this day and age. The author did not pollute this article with any input from the Exscudo team themselves, but purely graded it on its apparent merits (or lack thereof.)

Investment Details

As noted, 35% of the coins will remain with the Exscudo people. Some more will be issued to those who are answering bounties – doing things for the project that have not previously been done, including evangelizing (which is fishy, because it shouldn’t be something users need incentive for). In total, 156,600,000 coins will be available to the public, although of that another 5,280,000 EON will be issued to bug fixers as well as the adviser/ambassador team also listed on their front page.

To invest early and get a 10% bonus, you can create an account like below. At time of writing, the price was around 20,000 Satoshi each.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



Feedback or Requests?

DON'T MISS OUT

P. H. Madore

P. H. Madore

http://phm.link

P. H. Madore lives in Arkansas with his wife and children. He 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 is currently nearing the completion of a cryptocurrency exchange in concert with the firm he primarily works for, Vermont Secure Computing Consultancy.

There are no comments.

View Comments (0) ...
Navigation
S&P 500: Short-Term Sell   S&P 500 futures, 4-Hour Chart…