ICO Analysis: iDice | Hacked: Hacking Finance
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ICO Analysis: iDice

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ICO Analysis: iDice

Introduction

This article was posted on Friday, 21:52, UTC.

One of the first applications of the blockchain to the web was the creation of SatoshiDice and other Bitcoin gambling sites. Some of these sites have conventionally allowed users to invest a small sum of coin in order to receive a piece of the house’s profits. The iDice platform intends to do this from the beginning, having given advantage to those who invested in the first hour and first week (15% and 13% bonuses respectively).

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The novelty of iDice is that it will be the first mobile gambling platform for Ethereum. They claim to be the first mobile gambling application at all in the space, but PrimeDice and others already offer mobile usability. CloudBet even released a full-blown application of its digital casino for mobile. So while not a first, it is a first for Ethereum.

It comes around the same time as the Status mobile Ethereum operating system, which probably would make its deployment easier, and thus will make the deployment of competitors easier. This guts a statement made in the iDice whitepaper which claims it will have a “monopoly” for “several months.” The likelihood is higher, with the launch of Status, that competitors will come online in a quick procession.

Smart Contract > Transparent Team?

The iDice website list absolutely no information about who is behind the project. Additionally, at the end of their whitepaper there is a staunch disclaimer:

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iDice tokens are native of the iDice blockchain Dapp. It cannot be deemed to be any kind of equity of any real-world company. This Initial Crowdsale Offering is not distributing equity of iDice in anyway. There are always technological, political and market risks associated with the Blockchain industry. iDice is not responsible for any losses that occur due these risks.

Combined with the lack of team information, we have here an obvious scammer’s red flag. They get the Ethereum, you get the tokens, they exit with the value and you are left holding a weightless bag. Yet, they have run a successful beta platform which is said to have generated over $400,000 in user profits.

So, for this ICO, we have to weigh the value of the smart contract against the loss of team information. We must rely on the smart contract to deliver value, and then trust that it will always be in iDice’s best interest to continue operating the casino. That they do not have the funds to back the project from the get-go is another problem, but this could also be viewed as a sort of community-driven casino project.

One Interesting Feature

The method of iDice’s random number usage should be noted here:

iDice uses open source blockchain-based Oraclize.it to retrieve a random integer supplied by Random.org via TLSNotary. The iDice smart contract then performs encryption on the integer provided by Random.org and the IPFS address of the TLSNotary proof to compute the game result.

This may sound like technical jargon, but it’s actually a very interesting way of using randomness. IPFS, for reference, is the InterPlanetary File System, and it will one day amount to an immutable, decentralized way to navigate the web. At the very least, the roll results at iDice should be acceptable to even the most skeptical math genius.

Investment Details

Provably fair casinos use maths to ensure that they will always get a 1% return. Sometimes they lose, but over the long-term, the casinos profit by about 1% or more. Profits are based on what users lose, and there can be times when the system allows a single winner to win significant amounts of the house’s payout ledger. By purchasing any of the 5 million iDice tokens, you entitle yourself to a requisite portion of that 1% of proceeds. Later, when in operation, your piece of the rake may be further affected by referral/affiliate earnings, which can be anywhere from 10-50% of the rake from users they refer.

Yet, judging from the historical performance of iDice, and the performance/solvency of other similar games, like PrimeDice, which earns anywhere from 3 to 50 BTC per 24 hour period, it’s likely that this can be a long-term, profitable investment. Although the exchange will not hold user balances, and so it is somewhat safer as gambling sites go, hacking will always be an issue. Hacks will cost all investors money. Anonymous operators increase the risk of exit scam. Each of these issues are worth 1.75 points each in this case, so we’re looking already at a maximum of 6.5 safety rating.

The iDice team will take 500,000, or 10%, of the tokens at the outset. This 10% figure will be higher if all 5 million tokens do not sell, as they are getting 500,000 regardless how many sell, and anything not sold after the ICO period will be destroyed. This is apparently how they will also derive value from the project after launch, although during launch they will be using the Ether collected to fund development. The collected Ether will be allocated in the following manner:

  • 35% for the bankroll.
  • 30% for development.
  • 20% specifically for mobile development (50% total for development, or going directly to the creators, plus the value of the 500,000 retained tokens.)
  • 15% for promotion and marketing, which will presumably include the faucet shown in screenshots of the prospective mobile application.

If you want to invest in iDice, you can do so by accessing it using a compatible wallet. Mist, Parity, and MyEtherWallet are all recommended, with the last two being most highly recommended. The current price is 0.0076923077 ETH per iDice (ICE) token. You only have double-digit hours to invest, so act now if you are planning to do so.

The Verdict

This ICO is pretty straightfoward. We are not given anyone’s reputation to count on, so that’s a loss to the ICO itself, being that they could be reputable people behind it. Deduct 1.75 points for this, because the whole thing is a gamble – it could become more profitable to simply walk away than to continue operations, and nothing in the Whitepaper or smart contract prevents such a thing from happening.

There will be others, especially after the launch and usability of the Status Mobile Ethereum operating system. Deduct .5 points for this.

Hacking is an increased risk where people have incentive to do so. The betting engine could become overwhelmed at some point, losing the house its overall bankroll. Deduct another 1.75.

All these things added up, we’re giving iDice a 6.0 out of 10. If you happen to believe that the casino will be profitable, safe, and solvent, and you turn out to be right, you will make your money back and continue to receive dividends for as long as the casino operates. If you turn out to be wrong, it won’t be because this author over-rated iDice.

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.



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P. H. Madore

P. H. Madore

http://phm.link

P. 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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