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ICO Analysis: Simple Token

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In the words of CEO Jason Goldberg, “Simple Token is a bridge between consumer apps and the crypto.” As we have written many times before, integrating blockchain in businesses and applications is not easy. This is one of the most widely discussed problems in the blockchain ecosystem and many companies are working on bringing traditional businesses on blockchain. Existing public blockchain networks are not equipped to support traditional businesses due to challenges like latency and scalability.

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From my understanding, the solutions being offered can be categorized in three types, first is working with the existing blockchains by improving on and off-chain scalability (Plasma, Raiden) or via side-chains; second would be by supporting interchain operability like Cosmos; and third would be offering completely radical solutions like EOS. Along with the latency and scalability issues, it is very difficult for a business to “tokenize” itself due to the complex technology and regulations involved. Simple Token’s solution towards bridging businesses and blockchain involves tokenizing them with side-chains connected to the Ethereum Network.

According to the company, “Any app can launch branded tokens on open scalable side-chains powered by Simple Token, a protocol for consumer app tokenization and an ERC20 utility token.”

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Simple Token will enable any business to issue their own branded tokens without the need of having an understanding of the underlying blockchain technology or making any changes to their business model. Simple Token has developed modules for token design, wallet integration, identity, governance, interoperability etc. It would be as easy as integrating Stripe or PayPal for accepting payments on a platform.

Developers need to first buy Simple Tokens and stake them on the Ethereum mainnet via smart contracts. Once the Simple Tokens are staked on Ethereum, corresponding branded tokens are released for the side chains. Ethereum is known as the value blockchain which holds valuable assets in the form of Simple Tokens, while the side-chains are known as utility blockchain which hold the branded tokens against the Simple Tokens held in the value chain. The developer has the freedom to design the branded token and then set an exchange rate vs Simple Tokens like 1 to 100 or 1 to 10,000. The technology allows branded token transactions on the utility chains to be processed quickly and efficiently at high volumes while only the settlements are recorded on the slower value chain. Any failure in the utility chain can be proven by any user on the value chain to recover the staked assets.

The team has provided a simple usecase of the product in a blog post,

Imagine a digital music service featuring independent artists issues a branded token called SongCoin. A new customer may get 25 free SongCoin to warm her up to the benefits of the platform, but which she cannot cash-out herself. She might then buy 100 SongCoin for $1 and then pay 1 SongCoin every time she streams a track. She could earn 5 SongCoin every time she writes a review that others appreciate. And she could support musicians she likes by buying tracks at 99 SongCoin each. The artist, in turn, could use the SongCoin he earned to get music from other bands. He could spend his SongCoin at a coffee shop that has issued its own Simple Token powered branded token. Or he could convert them into his home currency to pay the rent.

The Token

As discussed above, there are two types of tokens on the platform. Users of the platform need to buy the ERC-20 Simple Tokens in order to issue their own tokens. The customised user tokens are known as branded tokens. The branded tokens are designed in such a way that they cannot be traded on any secondary exchange and can only be used in the internal transactions of the applications. The branded tokens can however be exchanged with Simple Tokens which can then be converted to any ERC-20 token

The ICO begins on 14th November. Simple Tokens are valued at $0.0833 per token with a hardcap of $20M. The total token supply will be 800,000,000 tokens of which 30% are available for the ICO. The crowdraise has a proof of support system for the early access period. Users submitting proof of support will be able to participate on 14th with a bonus of 10%. Please visit here for more details on Proof of Support.

The founder and the advisors will keep 10% of the tokens. 27.2% of the tokens have been allocated for the accelerator program which basically will give free tokens for early platform adopters. This will help the platform scale in the early days.

The Team

A team led by serial entrepreneurs always scores well on credibility. CEO Jason Goldberg has 17+ years of experience in building internet applications. Fab.com could be his most successful venture which was once a unicorn. He has worked with CTO Nishith Shah in around 7 startups. While tokenizing one of their ventures, the founders realized the difficulty in integrating blockchain with traditional applications. This is how the idea of Simple Token was conceptualized. There are 6 core members in the team along with a development team of 20+ members based in Pune, India. One advantage of being a successful entrepreneur is the easy access to developers and domain experts. The founders have leveraged their connections by bringing in a 13 members strong advisory team. The advisors are not mentioned on the website so if you want to have a look at them please refer this link.

Verdict

Think of a regular app developer who wants to issue his own tokens for maybe a customer loyalty program. At present he will have to build his own blockchain infrastructure and issue tokens via the complex ICO process, which involves many regulatory headaches. The tokens can be used by businesses for a wide variety of functionalities like payments, rewards points, incentives for data and content contributions. Every platform which is scaling ethereum can be a competitor for Simple Token. There are two core selling points for Simple Token which might make the tokens very valuable. One is the ease with which existing businesses can issue their own tokens and second is the absence of legal and technological hassles while doing so.

Larger corporations who can afford blockchain developers and want more customization will prefer platforms like Cosmos , Comsa and connect to Ethereum using hubs and interchain protocols. Small application developers might integrate with blockchain via decentralized app stores like AppCoins where they can access a large common marketplace. Lisk which deploys businesses on sidechains using a simple javascript framework can also be considered a competitor. These factors shrink the targeted userbase considerably.

Risk

  • Although it may not be apparent in the first glance, Simple Token faces competition from some very credible projects as discussed above.
  • The founding team has in the past developed some very quality projects, but they have also shuffled across many of them.
  • Users/developers will have a to pay upfront fees to stake Simple Tokens and get their own branded ones which might be undesirable to some.

Growth Potential

  • There are many good things that can be said about the project. They have demonstrated a working prototype about staking of Simple Tokens on smart contract. The management team is credible and has good experience in developing quality businesses from ground up.
  • There are some very credible backers for the project. Tencent was an early investor. Gil Penchina, a very well known Silicon Valley investor (investor of PayPal, Filecoin, Ripple) has written a blog post on Medium supporting the project. Later he also became one of the advisors of Simple Token.
  • The platform adds immense value to existing businesses by introducing them to blockchain and token economy without the regulatory hassles. There are 7 more companies lined up to use Simple Token platform to issue their own tokens.

Disposition

We feel a score of +7 is appropriate for Simple Tokens. Considering the market cap that platforms like Lisk have scaled, there is a good potential for both short and longer term growth.

Investment Details

The ICO begins on 14th November. You can participate here.

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ICO

ICO Analysis: Gimmer Token

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The impeccable rise of algorithmic trading has ushered in a new wave of do-it-yourself (DIY) algorithmic trading bots. With the success of these DIY bots in traditional financial markets, it was only a matter of time until they entered the cryptocurrency market.

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For algorithmic trading, volatility creates opportunity sets. And with cryptocurrencies still trading in an inefficient market, volatility runs rampant. This level of volatility creates an ideal environment for even the most rudimentary algorithmic trading strategies. However, there is a lack of DIY automated trading bots that are available for use by amatuer cryptocurrency traders. With this in mind, Gimmer is looking to take advantage of this need.

According to the company’s website, “Gimmer offers easy-to-use advanced algorithmic trading bots that require no programming skills, no previous trading experience and no in-depth knowledge of cryptocurrencies.”  

Essentially, Gimmer is hoping to position itself as the leading DIY algorithmic trading bots for individual cryptocurrency traders. While the company may never be the “Quantopian” of the cryptocurrency space, Gimmer does provide a novel solution for amateur traders.  

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Token

The Gimmer token (GMR) will be implemented using the Ethereum ERC20. While GMR tokens will be visible in participants’ ERC20 wallet, the tokens will not be tradable until the close of the public sale on January 31, 2018. GMR tokens will issued starting from January 3, 2018. GMR holders generate value from the token as a form of payment for the rental cost of Gimmer’s trading bots. For users, the rental cost scales proportionately to the level of sophistication desired – more sophistication equals higher return (at least in theory).

According to the whitepaper, 45% of the funds raised will go towards development and operations, 35% towards marketing and acquisition, 15% towards the founders and team, with the remainder of the pot (5%) going to legal and compliance.

Gimmer Tokens are valued at 1 Ether (ETH) per 1,000 GMR (plus applicable bonuses). The total amount of tokens to be sold is capped at 100,000,000 GMR. However, an additional 6,000,000 GMR will be created for advisors, reserves, and the team, with another 4,000,000 GMR created for bounties.

The company has not yet stated its intention to list the GMR tokens on any major crypto exchanges.

Team

Gimmer’s core team consists of two senior developers, a global macro hedge fund manager, and a creative design veteran. As compared with the majority of ICOs, Gimmer’s team is in-line with the relative standard – the quality of team meets basic expectations.  

The company’s CEO, Philipe Comini, is a senior-level UX/UI designer who is also balancing two other jobs (according to LinkedIn) – typically, not a good sign. The company’s CTO, Persio Flexa, is also a senior developer who recently launched 2 other start-ups – again, not a good sign. The company’s COO, Paul Lindsell, is a creative design veteran with over 12 years experience that is seemingly committed to his role – not balancing multiple jobs. The company’s CIO, Masaichi Hasegawa, is currently a global macro hedge fund manager and an executive of a shoe manufacturing company – the third C-suite executive of Gimmer to balance two other jobs.

The rest of Gimmer’s team consists of a marketing director, a user experience director, two developers, a customer researcher, a commercial director, and a journalist.

Verdict

Gimmer presents a highly speculative buying opportunity for investors interested in short-term capital appreciation.

Creating profitable algorithmic trading strategies is incredibly difficult. Hedge funds typically employ a large staff of mathematicians, experienced machine learning engineers, data scientists, and the like – Wall Street refers to them as “quants.” Quants typically hold a PhD in finance or quantitative mathematics and have years of hands-on experience with both statistical analysis and engineering (Python and C++). Does Gimmer employ any quants? No, not even by the slightest measure.

Overall, Gimmer’s DIY algorithmic trading bots are likely just a novel tool-kit for amatuer cryptocurrency traders, nothing more, nothing less.

Risks

Gimmer provides no data on slippage modeling, meaning users have no idea of all the transaction costs that are associated with a higher frequency of trading (including: fees, commission, and slippage). These costs can be significant and add up quickly. -1

Gimmer’s core team does not seem to be dedicated (balancing multiple jobs) or qualified in any sense. With Gimmer’s team lacking any real trading platform experience, unforeseen issues with their algorithms may lead to sizable losses for users. -1.5

Gimmer provides no data on latency, meaning users do not know if the company’s algorithms are deployed to proximity-based execution servers in attempt to achieve low-latency performance no matter where the user is located. For all trading strategies, latency must be measured and managed in order to maximize the probability of success. -1

Growth Opportunity

Provided that Gimmer’s trading bots run successfully without any technical glitches, users could benefit from enhanced risk management protocols, thereby insuring their principal investment through more downside protection. +2

Copy trading techniques could benefit novice traders, as they can publicly see high level information such as start date, running period, currency pairs and percent gained. Based on the public information, users can copy seemingly successful trading strategies and rent the same bots. +3

Automated trading strategies will allow a larger pool of traders to invest in cryptocurrencies. Since the market is still subject to large, volatile price swings, more passive traders could use Gimmer’s platform to execute automated trades (based on pre-set parameters) without having to monitor the market on a day-to-day basis. +2.5

Disposition

While algorithmic trading in the cryptocurrency space is a smart strategy, Gimmer lacks the sophistication of even the most basic trading platforms. The biggest concern beyond Gimmer’s lack of sophistication, is the pedigree of the core team. With no quants on staff and a couple UI/UX designers creating the algorithms, technical issues are likely to occur. And with that in mind, faulty algorithms or platform glitches could easily lead to the loss of principal investment for users.

For amateur traders interested in novel tool to play around with, Gimmer is a great choice. For veteran traders with solid programming and statistical skills, move on to a better platform.

Against this backdrop, we believe that a score of 4.0 out of 10 is warranted.

Investment Details

  • Type: Crowdsale
  • Symbol: GMR
  • Pre-ICO Sale: November 24, 2017
  • Public Sale: January 3, 2018
  • Payments Accepted: ETH

Disclaimer: no position in Gimmer at the time of writing.

Featured image courtesy of Shutterstock.

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ICO Analysis: Lendoit

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Lendoit is a next-generation peer to peer decentralized lending platform based on Ethereum, which connects lenders and borrowers all over the world using the advantages of smart contracts.

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The Lendoit platform provides professional scoring and verification, APIS for each country, a loan marketplace where lenders set rates on loan applications, a default market where failed loans can be traded, syndicated loans, and the ability to sell a loan to another lender if needed. Lendoit will be the only lending platform on the market that does not take collaterals. The company believes that, “in a world of crypto micro-loans, managing collaterals is not sensible.” In their view, this is “like lending USD by using EUR as collateral.”

Because there are no collaterals, the Lendoit platform combines four methods to mitigate the chances of lenders losing money: Smart Compensation Fund, Syndicated Loans, 3rd party scoring/verification from local companies, and a collectors market where debts can be sold.

The following is a simplified guide to Lendoit’s loan process.

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  1. The borrower applies for a loan by filling out an application. This takes about three minutes.
  2. The borrower uploads any relevant verification (i.e. government-issued photo ID) according to their particular country’s regulations.
  3. Lendoit sends the loan app and verified information to verified scoring providers to receive a score for the current loan.
  4. Lendoit will publish each smart loan contract in the blockchain and marketplace.
  5. Lenders Tender is a process of raising loans for funds requested by the borrower.
  6. The borrower can now withdraw the funds using his or her wallet.
  7. When the date to pay back the loan arrives, the borrower receives a notification.
  8. The borrower now repays the funds with interest to the smart contract.
  9. The lender withdraws his money in the same currency he loaned it.
  10. The lender receives interest in the form of LOAN tokens, the amount based on an automatic conversion algorithm put in place by the Smart Conversion Contract.
  11. The Smart Compensation Fund Contract helps lenders recover a small portion of their money, if the borrower fails to pay. The amount is not confirmed, but it seems like it will be around 20-30%.
  12. If the borrower fails to pay the interest and the loan becomes defaulted, the smart loan contract is offered to a collectors tender. The collector who wins the tender buys the debt, which minimizes the loss of funds for the lenders.

Lendoit has an alpha version of its platform available here. It is not very impressive yet. The real technology (smart contracts) has yet to be created.

They plan to release the beta in Q1 of 2018, and the fully operational version Q3 of 2018.

The Token

  • Symbol: LOAN
  • Platform: Ethereum
  • Presale: Dec. 13 – December 27, 2017 (125 million for sale. 1 ETH = 13,000 LOAN). Must register for whitelist in order to contribute.
  • Token sale: Jan. 18 – Feb. 18, 2018 (475 million for sale. sale starts at 1 ETH = 12,000 LOAN)
  • Total Supply: 1 billion
  • Hard Cap: 50,000 Eth (currently $22 million USD)

The LOAN token plays several roles. Here are a few of the most important:

  1. Lenders can use any ERC20 currency to loan, but must hold 10% of whatever amount they loan in LOAN tokens. For example, a lender wants to loan someone $1,000 ETH must hold $100 worth of LOAN in his account.
  2. Borrower must use LOAN to publish the Smart Loan Contract.
  3. All the fees charged on the platform are paid in LOANs.
  4. All the interest payments will be paid to the lenders in LOANs. This will take place automatically via the Smart Conversion Contract.

The Team

The company is located in Israel but incorporated in Gibraltar. The company maintains a large global team that extends far beyond its in-house operation. However, after researching the four co-founders of the company, nothing particularly striking stands out. One would have expected a more impressive track record for those launching a platform of this magnitude.

Seven advisers are signed on to the project, including Richard Titus and Michael Terpin. They also have eight developers, which is fantastic, as it shows they really are trying.

The team picture (above) leaves a lot to be desired, as it is not very professional.

The Verdict

This project has great long-term potential. Its biggest challenge is going to be whether or not it can successfully build the various forms of smart contracts it proposes to launch. There are no known smart contracts in existence that can do what Lendoit promises its contracts will be able to do.

Risks

  • The concept of not needing collateral to receive loans could be a disaster. Why would lenders want to use this platform when the possibility of getting stiffed is so high? They can just use one of Lendoit’s competitors to guarantee their returns. -2
  • The project faces legal hurdles galore. Sure, the plan is to be decentralized, which could reduce certain regulations, but the company is going to be verifying borrowers’ identities in great detail. I could see governments clamping down on projects such as this one if enough lenders start getting ripped off. -2
  • The technology required to run this platform does not exist yet. The demo/alpha provided as an example of is extremely basic. It’s a strong possibility the team fails, and this never gets off the ground.  -2

Growth Potential

  • The company has several partners, including Bloom, Hive, RSK, and Wings. I tried to dig deeper into these partnerships but didn’t find anything substantial. These seem to be decent projects, and LOAN can use each to grow.+2
  • Some of these other new lending ICOs have done pretty well so far on the markets. SALT token, for example, is extremely hyped. One of the main differences between SALT and LOAN is that SALT requires borrowers to put up collateral, while LOAN does not. One would think this would bring more borrowers to the platform +2
  • If they do what they claim to be able to do – build these genius smart contracts – they can change the lending game permanently. In this way, the sky is the limit. +4
  • The team has put a great deal of emphasis on development, as evidenced by the number of developers they have on board. +2

Disposition

As previously stated, the most important aspect of this project is the technology. Can they build these contracts? According to the roadmap, we won’t see the beta version for two or three months, and we won’t be able to judge if the contracts are fully functional for at least six months. This has long-term potential, but a rocky short-term.  Against this backdrop, we assign a score of 4 out of 10.

Token Details

Learn more/sign up for whitelist here.

Featured image courtesy of Shutterstock

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ICO Analysis: CanYa

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CanYa is offering a platform for the exchange of peer-to-peer services.

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Users can load their CanYa wallets with the ERC20 CanYaCoin token, in addition to several support fiat currencies.

Users will be able to instantly pay for services on a global and local level. The platform supports peer-to-peer services and relies on users to self-curate and verify new types of services and providers.

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Providers can earn CanYaCoins for their services, and can spend these coins within the app, or convert and send them to their Bitcoin or Ethereum wallet using CanYa’s network of zero-fee exchanges. Once users are verified, they can withdraw immediately to a fiat bank account without having to pay fees or transaction limits.

The CanYa platform also claims to help the best providers rise to the top and get more exposure and work.

**It’s important to note that the CanYa ICO cannot accept participation from US citizens unless you qualify as “accredited investors.”

The Team

CanYa was founded in 2015 with the goal of created a true peer-to-peer platform with no intermediary, based on meritocracy, and a seamless interface connecting the digital world with the real one.

The whitepaper claims the project moved from concept in 2015 to development in 2016 and then a successful soft-launch in 2017 in a small Australian market.

There are currently 3,400 provider listings with roughly 7,600 user engaging on the platform, with monthly growth in double digits.

Based in Australia, the founding team includes Rowan Willson, Christopher McLoughlin, JP Thor, Jet Yap, and a handful of other promising team members and advisors. Their work thus far is promising, although I do naturally have my hesitations about tackling a project of this scope and creating significant traction out of Australia.

Tokens and Distribution

CanYa is aiming to raise 29,333 ETH by offering 34,000,000 CanYaCoins for public sale.

These funds are being used to integrate the cryptocurrency payment layer, provide liquidity for the hedged escrow contract, expand features and “undertake an aggressive global launch with marketing, translations and infrastructure.”

There will be around 100,000,000 tokens in circulation, with a hard cap of 60,000,000 CanYaCoins for sale. A total of 26,000,000 CanYaCoins are going to be sold privately to “strategic investors who bring long-term value to the project”. These private investors incur vesting schedules from three months to 12 months. A total of 34,000,000 CanYaCoins will be sold during the public sale that started in November.

The token offering will only accept ECH.

Risks

  • Onboarding new crypto-enabled merchants poses a substantial bottleneck. Freelancers and workers-for-hire flock to where the money is, and if CanYa has any shortage of jobs available, they will stick to traditional methods. Onboarding new crypto-enabled merchants will require substantial marketing work and is hindered by the learning curve that comes with acquiring and spending cryptocurrencies. -2
  • Competitors in the digital service industry could pose a substantial threat to user acquisition. While CanYa poses a huge benefit of much lower transaction fees, platforms such as UpWork and Fiverr have already dumped a ton of resources and money to grow, and it might be difficult to catch up without an extensive marketing plan. -3

Growth Potential

  • Peer-to-peer networks at scale have always been burdened with some sort of third-party making a commission off the transaction, and this is a very applicable use of smart contracts to replace those intermediaries. The intermediary commissions (from the platforms to the payment services) add up to the tune of billions globally. +3
  • CanYa resonates with its ideal user base. This project also happens to target the same userbase that is perhaps the most crypto-savvy segment of the world: Internet entrepreneurs. This seems like an easy target to launch an active user-base. +2
  • The value add the CanYa platform offers over other services such as UpWork is pretty attractive. UpWork, for example, charges freelancers 20% of their total contract price up to $500 and then 10% up to $10,000. A freelancer seeing the option to work on a similar platform and essentially make 20% more money is an easy sell. +3
  • The platform is incredibly detailed and well-thought out in the whitepaper. This is one of the few ICO products I can actually see myself using on a daily basis, provided the CanYa team is able to attract a significant amount of users on both ends. +2
  • The CanYa team shows a willingness to stick with the project long-term, and even champions the cause with a “CanYa HODL club” by rewarding holders of more than 5000 CAN tokens at the ICO with perks of being in the HODL club. +2

Disposition

As someone that has done freelance work and hired multiple freelancers for various projects, I can appreciate a project like CanYa. I also think it’s cool how the CanYa platform also works for real-life services.

We arrive at a score of 7 out of 10 for the CanYa ICO.

Overall, the whitepaper and marketing materials for CanYa are very thorough and easy to go through, showing a much appreciated effort by the CanYa team to make their ICO easier to understand and palatable for average investors.

Investment Details

You can find more details about the CanYa ICO here.

**It’s important to note that the CanYa ICO cannot accept participation from US citizens unless you qualify as “accredited investors.”

You can find the ICO whitepaper here. The sale opened Nov. 26, 2017 and will run through Dec. 26. 

Featured image courtesy of Shutterstock. 

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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