ICO Analysis: Universal Protocol
Ever since the top cryptocurrency by market cap and popularity, Bitcoin, has come into existence in 2009, many different blockchain projects with different approaches to different goals such as Ethereum and Nano have been introduced to the market. Although most blockchains offer different features and benefits to their userbases, the absence of connectivity and interoperability between these blockchains has been accepted as a crucial problem in the crypto-verse. For instance, if Amie wants to trade her ETH in her wallet with NANO, she has to send these funds to an exchange, trade them with NANO and then return them to a NANO wallet. These cost Amie time, funds and inconvenience.
But that is not all. The presence of black-hat hackers in the sphere brings the possibility of Amie’s wallet getting hacked and the loss of her crypto-assets. It is also possible that she loses the access to her private keys and thus her funds. This is a common problem as it is estimated that around 30% of minted Bitcoins so far are lost forever for this reason. The Universal Protocol team considers these problems as an important entry barrier and introduces a business model to solve them.
Introducing a class of Ethereum Proxy Tokens which are reserved on a fully substantiated 1:1 basis enables the platform to provide a solution to the problem of non-interoperability. For instance, when a Universal Bitcoin (UPBTC) is issued, a Bitcoin is held in custody in a passive state and the owner of this UPBTC token is able to exchange it with other Universal tokens such as ULTC. These Universal Protocol tokens are designed to represent their respective tokens within the platform or any other marketplace compatible with UP’s working model.
As the platform will store “real” cryptocurrencies in custody, this brings an enhanced level of security and solves the problem of losing one’s funds by getting hacked.
The problem of losing access to one’s crypto, because one does not have his or her private keys anymore, is solved by the introduction of recovery keys. Before depositing his or her tokens into the UP wallet, the user is provided with a recovery key. This recovery key is sufficient for the user to retrieve his or her funds. Even if the user loses the key, it is still possible for him or her to get access to the funds, because these keys are split into three parts where one part is given to the user, another to the platform, and the last to the backup provider – just two of the three parts are sufficient to retrieve a user’s funds.
UPT is the native token of the Universal Protocol Platform and is used to buy Universal Proxy tokens such as UPBTC and UPLTC with no fees except gas, to vote in polls and matters of governance, and to have access to other tokenized assets available in the platform.
Treasury, stakeholder, and alliance partner tokens are locked up for five years, three years and three years respectively.
The total supply of UPT is 10,000,000,000 tokens with the following token distribution:
- 35% token sale purchases
- 22% alliance partners
- 25% stakeholders
- 15% treasury
- 3% ecosystem partners
The team is planning to use the token sale proceeds as follows.
- 50% initial technology set up
- 35% engineering and development
- 5% marketing
- 5% legal and regulatory
- 5% operations and administration
Dan Schatt: Schatt is a co-founder of Cred and the chairman of the Universal Protocol Alliance. Previously he has worked as the general manager of mobile and financial innovations at PayPal for five years and as the general manager at Yodlee for three years.
Simon McLoughlin: McLoughlin was the head of corporate development at LexisNexis UK.
Maxim Rokhline: Rokhline has worked as the SVP of financial services at Tradeshift, as the director of product at Cielo, as the head of global payments platform at Intuit, and as the senior manager of global core payments at PayPal.
Greg Kidd: Currently the CEO at globaliD, Kidd was a senior associate at Booz Allen Hamilton, a senior analyst at Federal Reserve Board and the chief risk officer at Ripple Labs.
Lu Hua: Hua has worked as a lead engineer at VeriSign and as the China head of core payment and the US head of global banking platform at PayPal.
Brave: Brave is a privacy-oriented web browser with an integrated adblocker.
Cred: Formerly known as Libra Credit, Cred offers crypto-backed loans to its users.
Uphold: Uphold enables its users to buy, sell, exchange fiat, cryptocurrencies and commodities.
FBG Capital: FBG Capital is a venture capital company founded by Vincent Zhou.
Arrington XRP Capital: Arrington XRP Capital is a well-known venture capital firm founded by Michael Arrington, founder of TechCrunch, focusing on digital assets.
Below is a breakdown of the risks and growth potential of Universal Protocol.
- Holding Universal Proxy Tokens instead of “real” cryptocurrencies entails a lower degree of security. Although it is infinitesimally likely, the recovery key parts stored by the platform and the backup provider are sufficient to gain access to users’ funds should the platform and a backup provider get compromised. (-1.5)
- The platform tackles blockchains’ crucial problems basically by providing a more centralized custodial service. It is possible that some cryptocurrency users could be unhappy with this more centralized approach, which could hurt adoption. (-1.5)
- The platform provides solid, viable solutions to already existing problems. (+5)
- Exceptional team members, advisors, and partnerships capable much more than achieving their goals. (+4)
The current cryptocurrency scene suffers at least from three crucial problems: Non-interconnectivity between different blockchains, the existence of malicious actors, and the loss of funds in the case of their owner losing his or her private keys. Universal Protocol provides solid, viable solutions to these problems by introducing a class of crypto-assets and recovery keys. Ethereum Proxy Tokens are exchanged with respective “real” cryptocurrencies, UPBTC with BTC for instance, and these real cryptocurrencies are stored in a reserve in a 1:1 basis. This allows the protocol users to trade their assets with none to minimal fees in a more secure way. Recovery keys which are provided to users are sufficient to gain access to these funds and in the case of losing these keys, the fund owner can reach the team and a backup provider to re-gain this access. Although this approach solves these beforementioned problems, it also entails that the complete control over funds are not in the fund owner’s hands and it is not clear if the average cryptocurrency investor would prefer these services. Founded by a great team with a great track record and advised by an exceptional group of advisors, the project should achieve its goals easily. Universal Protocol receives a 6/10.
- Type: ERC20 – Utility
- Symbol: UPT
- Platform: Ethereum
- Crowdsale: Q4’ 2018
- Minimum Investment: Unspecified
- Price: $0.01
- Hard Cap: $35,000,000 [This number is based on the floor rate of $0.01/UPT, given that some bonuses are provided to private sale contributors, it should be less than $35m
- Payments Accepted: ETH
- Restricted from Participating: United States, China
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