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ICO Analysis: Pantos

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It is looking more and more like the future will be filled with numerous separate blockchains serving several purposes. In order to speed up adoption and scaling these blockchain projects, currencies and communities will need to have a way of collaborating with each other in a standardized way. That is what the team from Bitpanda wants to provide with their new technology project Pantos.

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Pantos is the first multi-blockchain token system that allows for a seamless cross-chain token transfer. It is an open-source, open-innovation driven research project that ultimately wants to become completely decentralized and owned by the community.

Pantos will provide channels for both communication and cross-chain exchanges of data and value. This will break down current barriers to partnership and collaboration between developers and institutions. This will speed up innovation and allow blockchains to scale and mature together.

Bitpanda is the European version of Coinbase, only with more features. They have over 60 team members on the payroll and keep adding more talent to help bring their vision of a multi-blockchain token system to life.

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The Pantos project will work with scientists from TU of Vienna, the Austrian Academy of Sciences and the Vienna based Research Institute for Future Cryptoeconomics (RIAT). They will develop the Token Atomic Swap Technology (TAST) and release the developed work as an open-source technology, which will serve as a key technology in a tokenized world. The key feature of Pantos will be that it will allow for seamless cross-chain token transfers. This means that users can simply select a target blockchain to migrate their PAN token to and therefore have future-security regardless of technological change.

“We want to bring influential blockchain projects together, improve communication between developers, researchers and users, and set standards for on-chain tokens. Through open collaboration with these diverse stakeholders,we can determine best practice regarding issuance and exchange of PAN tokens on every blockchain” (pantos vision statement)

Token Atomic Swap Technology (TAST)

Atomic swaps allow for the instant exchange of cryptocurrencies between two parties on two different blockchains, peer-to-peer, at previously agreed terms and without the need for third parties to oversee or facilitate the transaction. This technology enables instant transfers between multiple cryptocurrencies in a completely trustless manner and with zero counterparty risk.

TAST will be a revolutionary way of swapping. Current swaps work with asset A swapping in a  decentralized way for asset B on a different chain, for example, Litecoin to Ethereum. TAST aims to do an Atomic Swap for the SAME asset. For example, transferring a PAN token from Ethereum to a PAN token on Lisk using the TAST protocol.

Token

The PAN token will be the vehicle by which tokens can seamlessly transfer across multiple blockchains.

The ultimate goal of the Pantos project is complete decentralization and community ownership. They will accomplish this in three phases.

Phase 1: Allow PAN token to shift between multiple blockchains via the Bitpanda platform.

Phase 2: A public API facilitating automatic shifting of PAN between blockchains.

Phase 3: Utilizing atomic swaps, Lightning Networks and smart contract technologies to completely decentralize PAN trading.

The public sale ends Apr. 18. However, there is no private or presale. One price for everyone!

The hreakdown is as follows:

  • 40% crowd sale
  • 40% retained reserve
  • 10% Team
  • 9%, bounties
  • 1% airdrop

In order to participate in the ICO you must do it through https://www.bitpanda.com

Airdrop: 1% (10 million) PAN will be distributed evenly to all bitpanda account holders regardless of how much btc you possess. You must claim your airdrop by April 18th.

Team

The Vienna based team of 60 have already proven to be big league. Now they have added way more brains to the team by partnering with several top tech universities and researchers in Vienna to create TAST.

Their Advisors and strategic/legal partners are rock solid as well.  Have a look at the full squad here: https://pantos.io/

Verdict

Technology like Pantos is in high demand, which is why the competition is so thick.

Pantos could very well have the secret sauce with their open sourced scientific research project, TAST. TAST will enable and create innovations that don’t exist yet in the blockchain community such as; cross chain token transfers (not swaps), same asset transfers, real-time arbitrage, and a “Blockchain Domination Index” to measure PAN distribution among blockchains.

Risks

  • Atomic swap technology is not exactly easy to build. The success stories are lacking. “In 2017, developers from Decred created the first functioning cryptocurrency atomic swap between Decred (DCR) and Litecoin (LTC). Meanwhile, altcoin.io carried out the world’s first atomic swap between the Ethereum and Bitcoin blockchains, and Litecoin Founder Charlie Lee, announced on Twitter the successful on-chain atomic swap of 1 LTC for 55 VTC with James Lovejoy, Lead Developer of Vertcoin.”Pantos is trying to do even more difficult things. Things no human have ever done That’s risky. -1
  • How does the project make money? Apparently, the cross chain token transfers will be free. And eventually the entire thing will be decentralized and community owned. Perhaps there is a simple answer to this question. One hopes the only way to make money isn’t through selling PAN reserves. -1
  • “400,000,000 PAN are reserved for optimal future fundraising but will never be offered for sale below ICO price in BTC terms.” This means 40% of the total supply will be pumped into the economy sometime in the future. That is going to seriously dilute the value per token. -1
  • Competition: there are several cross-chain projects already in the space (WAN, ARK, ICON, FUSION) to name a few. All these projects are developing unique ways to cross-chain. It’s very hard to predict how this will all turn out, but the competition is certainly fierce. -0.5
  • This ICO is only available for most customers in the EU including Switzerland, Norway and Croatia. This is worrisome. How are they going to become the king of multi-blockchain systems when most the world won’t know about their project? -1

Growth Potential

  • If the TAST  proves to be the real deal, this technology will be in high demand. The arbitrage feature alone is a game changer.+2 
  • “Pantos’ portability feature allows PAN to become the first universal denominator token. This will allow for the introduction of a new crypto economic metric: a Blockchain Dominance Index, which will show real-time token usage and distribution among blockchains and, thus, can measure each blockchain‘s significance for PAN. Moreover, when users successfully adopt PAN, its flow between blockchain projects could provide a reliable metric that captures public confidence in a given project’s vitality, opening up a pathway toward predictive analytics in cryptocurrency valuation, and in the valuation of the crypto ecosystem as a whole.” +1
  • They already have some real solid partnerships; Lisk, Komodo, Waves are close collaborators. Soon these blockchains will get PAN-support. As they grow, they plan on further collaborations with many other blockchains. +3
  • According to their token agreement, all unsold tokens will be proportionately distributed to ICO contributors. So far they have only raised about 35% of their hardcap. There are only a few more days left in the sale, this could mean bonus tokens for everyone. +2
  • The Real-Time Cross Blockchain Arbitrage System will be a groundbreaker. Using the PAN token traders will be able to exploit emerging price differences between pairs. This seems like the most promising aspect of Pantos. Its very complicated to break down, learn more about the system here. +2.5

Disposition

This is a very impressive project, with few weaknesses. We arrive at 6/10 

Investment Details

  • Platform: Ethereum
  • Symbol: PAN
  • Total Supply: 1 billion
  • Total for Sale: 400,000
  • Price: Same flat rate for everyone. The tokens/eth ratio will be determined after the sale. unsold tokens will be distributed among contributors
  • Jurisdictions Barred from Participating: Non-EU countries
  • Airdrop: Ends April 18th 2018, 12:00 CET (UTC+1
  • Crowdale: March 24-April 18th 2018, 12:00 CET: https://pantos.io/

Whitepaper:         https://pantos.io/pdf/pantos-visionpaper.pdf

*For token purchase and airdrop you must sign up for a Pitpanda account here.https://www.bitpanda.com/

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: 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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