ICO Analysis: Gatcoin

Blockchain has the potential to radically transform the merchant industry. This extends far beyond just accepting bitcoin and altcoins to include a system where merchants can actually issue their own digital tokens for use as discounts and other privileges.

That’s the general concept behind Gatcoin, a blockchain-based shopping platform that transforms traditional discount coupons, gift cards and other promotions into tradable digital tokens. By joining the Gatcoin system, retailers can issue their own digital tokens to launch seamless discount and loyalty programs to a mass consumer audience. In the case of Gatcoin, this can be done in mere minutes via “targeted airdrop” technology that allows merchants to zero-in precise demographics.

As the company explains in its whitepaper, Gatcoin “seeks to create a controlled environment for enterprises to deploy digital tokens, thereby reducing traditional barriers to blockchain adoption faced by mainstream companies seeking to leverage blockchain innovation.”

The GAT System makes this process remarkably easy by allowing merchants to issue their own branded tokens, which are called Merchant Tokens. From there, these tokens can circulate on private consortia networks and be used to redeem tangible products and services from participating merchants.

Customers can use GAT-inspired digital tokens to buy products and services, receive discounts or claim rewards. The Gatcoin system also allows tokens from multiple merchants to be stored in one mobile app for instant purchase. Unlike traditional coupons and gift cards, the tokens are tradable on major exchanges and deliver immediate value to customers, regardless of who issues them.

At the time of writing, Gatcoin’s developers have identified five uses for Merchant Tokens. They include:

  • Cash tokens, which are used as pre-paid cash
  • Discount tokens, which are used to subsidize the regular cash price of an item
  • Loyalty tokens, which are used to replace loyalty points
  • Gift tokens, which replace gift vouchers
  • Travel tokens, which are used as portable currency to spend globally

Beyond that, the Gatcoin ecosystem features five key components:

  • GAT Wallet: a mobile token wallet
  • GAT Marketplace: online market of participating retailers
  • GAT Exchange: a cryptocurrency exchange where members can trade Merchant Tokens against GAT Coin
  • GAT Network: private networks where Merchant Tokens are circulated
  • Targeted A-Drop Delivery System: a proprietary system that allows retailers to target specific consumer demographics within minutes

Gatcoin is no small project, and it isn’t just popping up out of nowhere, either. The company has a very strong business case, as it prepares to roll out services across 60,000 retail stores and 21 brands throughout Asia.

GAT Coin

In pursuit of its objectives, Gatcoin has launched an ERC20 token called GAT. It is the main cryptocurrency transacted on the GAT Exchange, which enables customers to trade and acquire Merchant Tokens. Consumers can use their GAT Coins to purchase Merchant Tokens or vice versa. The main differences between GAT coins and Merchant Tokens are outlined in the chart below.

GAT Coins Merchant Tokens
 Available during token raise  Not available during token raise
 Limited supply  Unlimited supply
 Will circulate on the Ethereum public   network  Will circulate on private GAT networks
 Freely transferable  Not available on Ethereum public   network
 Storable in all major wallets  Storable only in GAT wallet
May be exchanged for Merchant Token May be exchanged for GAT Coins

Gatcoin’s public pre-sale will launch Oct. 28 and last for one month. A total of 15 million GAT Coins will be available during the pre-sale at a rate of $0.20 US per unit. Investors who participate in it are eligible for a 20% bonus.

A total of 115 million tokens will be available during the public sale beginning Dec. 15 and lasting through Jan. 15, 2018.

Investors participating in the crowdsale receive their GAT Coins immediately upon purchase. GAT tokens are transferable upon conclusion of the public token sale in January.

The minimum funding goal for the project is $20 million USD, with a hard cap of $35,870,370.

The Team

Let’s just get this out of the way: Gatcoin’s team is nothing short of remarkable. We can literally spend pages talking about their skills and professional experience, but let’s just say the token project has managed to attract blockchain experts, Swiss bankers, professors, tech geniuses and cryptocurrency investors. A total of 16 people are part of the core team, according to the main website.

Simon Cheong is the main architect behind Gatcoin. As a blockchain entrepreneur and former World Bank lawyer, Cheong has an outstanding track record for a project of this nature. Other notable team members include Emeritus Professor Wei-Tek Tsai, marketing heavyweight Anthony Huang and tech entrepreneur James Kong.

Samson Lee, who is the co-founder of the Ethereum Organization for South China and South Asia, is also on the team. It should be noted that Ethereum founder Vitalik Buterin has endorsed the regional organization. Blockchain investor Ross Stokes and Swiss banker Michael Blake are also part of the project.

The technical team includes programmers, retail web developers, token program designers and graphic illustrators.

Verdict

When it comes to the world of retail, Gatcoin is a potential game changer, and falls under a narrow splice of ICOs that can bring real disruption to the market. The author would place it in a similar category as Spectre and Polkadot, albeit for entirely different reasons.

Risks

  • The company cites immaturity of the Ethereum network as a primary risk. This is not entirely unfounded, given the long-standing challenges facing Ethereum’s mainstream development. The Ethereum network has already been prone to significant processing delays due to extremely high volumes. It seems like Gatcoin’s success would exacerbate processing delays on the network, especially if mass adoption is achieved. To date, it is unclear how or if the Ethereum community can resolve these issues. -3
  • Although the author is a believer in the GAT protocol, and argues for its adoption below, a project of this nature relies heavily on mass adoption. While the conditions are certainly ripe for this to occur, retailer adoption rates are a huge unknown at the moment. -3
  • Gatcoin isn’t the only startup using blockchain technology to disrupt the consumer industry. The competition for merchant processing will only grow as the blockchain revolution intensified. -3

Growth Potential

  • When it comes to star studded lineups, only a few ICOs can compete with Gatcoin. It’s not just who they have on board, but the diverse cross-section of talent that is represented. Blockchain entrepreneurs, cryptocurrency investors, Ethereum champions and investment bankers make up a highly competitive team of people. +5 
  • If you haven’t noticed, traditional retail is struggling to stay alive. That means discounts, loyalty programs and other incentives are becoming more vital than ever to attract and retain customers. Gatcoin is in a position of strength to capitalize on this demand. If Groupon is a crude proxy for what Gatcoin can do, then the future looks very bright. +4
  • A-Drop is essentially real-time target marketing that allows retailers to narrow in on their ideal demographic within minutes. This technology, which is currently patent-pending, could be an extremely powerful draw for retailers. +3
  • From the perspective of consumer adoption, Gatcoin has a unique opportunity to consolidate loyalty programs all in one place. Token liquidity also gives consumers full utilization of shopping incentives. In other words, the author sees plenty of reasons for consumer adoption. +4

Disposition

Having considered all the above, we settle on a score of 7 out of 10 for Gatcoin. Since many ICO concepts are unproven, arriving at a score higher than this is often difficult to justify.

Make no mistake – Gatcoin is a potential game changer. Its success will depend largely on mass merchant adoption. The incentive is certainly there. Now it’s time to get the word out.

Investment Details

  • Type: Crowdsale
  • Symbol: GAT
  • Public Pre-Sale: Oct. 28 – Nov. 28, 2017
  • Opening Sale: Dec. 15, 2017 – Jan. 15, 2018
  • Platform: Ethereum (ETH)
  • Total Supply: 1 billion GAT
  • Future Distributions: 60% over three-year period (2018-2021)
  • Payments Accepted: Ethereum (ETH)

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi
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