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ICO Analysis: ZeroTraffic

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ZeroTraffic is offering a cryptocoin smartphone-based application to help reduce recurrent traffic congestion.

The way ZeroTraffic works is by utilizing gamification to reward commuters who travel off-peak times with the goal of reducing peak traffic volume. Studies have shown that just a 5 to 10% reduction in traffic volume can significantly reduce congestion and help traffic flow faster.

By incentivizing users to travel using alternative routing schedules, ZeroTraffic has the goal of saving users time and offering them a way to earn prizes, while also helping reduce the traffic load for everyone else.

ZeroTraffic plans to offer non-monetary incentives such as points, badges, levels, and status, while working with sponsors and media who can award fuel, product discounts, and recognition.

The benefits of ZeroTraffic go beyond saving a few hours of travel a week. ZeroTraffic aims to create the end result of an effective tool that can influence driver behaviour with very low operational costs. This is something many major cities have struggled and fail to do for decades.

If you’ve ever been brave enough to get behind the wheel of a car around rush hour time in cities such as New York City, Los Angeles, Miami, or Austin, you can understand the potential of ZeroTraffic.

On average, traffic congestion costs Americans $124 billion dollars a year in direct and indirect losses, and the number is expected to rise to $186 billion in 2030. A conservative estimate for the traffic costs in Canada are around $4.6 billion annually.

Zero Traffic utilizes a virtual transponder application (a GPS-enabled smartphone app) to calculate the metrics used for the award points people get. The parameters are based on exclusion zones, home and work addresses, and congestion zones defined by transportation authorities.

Team

ZeroTraffic is owned by the parent company Array Systems Computing Inc. with headquarters in Toronto and Ontario, Canada.

Array Systems Computing Inc, founded in 1981, has played an integral role in the field of Intelligent Transportation Systems (ITS), and is the builder of the COMPASS software used by MTO to manage incidents on all the highways in Ontario.

The CEO and President, Stuart Berkowitz founded Array Systems in 1981 while he was a Ph.D student at the University of Toronto. Additionally, Berkowitz has a BSc in Computer Science from Cornell, and a MS in Mathematics from the University of Illinois. Berkowitz has experience operating and selling Array Telecom Inc to Comdial in 1998, and VoiceGenie Technologies Inc to Alcatel in 2006.

ZTT Tokens

The ZeroTraffic platform is based on the use and ownership of ZTT tokens.

Investors with a minimum of 1250 ZTT become a “Deputy Mayor” and can buy a specific district they are able to advise the ZeroTraffic team on the congested regions.

Image from TrafficZero Whitepaper

Investors can specify the center of a circle of any size greater than ½ km radius, with the smallest circles costing 1250 ZTT (the coin which can be purchased using Ether). Investors are capable of selling the ZTT, or hold onto them to get a district dividend of up to 4% based on territory size. In a post on Reddit, the team stated that after 5 years they may even offer a buyback option at the market price.

This is interesting because it allows people to take specific ownership of improving traffic patterns in their communities; a direct incentive for the daily commuter.

The pricing for the ZTT ICO is tiered based on weeks away from the end date, with the first week price at around 250 ZTT/ETH, with the price increasing at around 26% per week and 3.6% raised ZTT in multiples of $4M.

Distribution

ZeroTraffic plans to offer up to 80,000,000 ZTT in the sale, with a total maximum token supply of 300,000,000 ZTT. The minimum ZTT offered in the sale is 4,000,000.

The fact that ZeroTraffic set a total maximum token supply is a favorable quality, but 300,000,000 is a fairly large maximum token supply.

The 80,000,000 ZTT offered in the sale add up to a lofty goal of about $91,200,000 based on the Ethereum price of around $285.

ZeroTraffic Progress

The ZeroTraffic team plans to roll out its project in 12 months in four separate phases:

From the Zero Traffic whitepaper:

  1. Implementation phase: will last 8 months. During this

Phase, the virtual transponder application and the gamified ZeroTraffic website will be implemented.

  1. Evaluation Phase: planned to be of 2 months duration. The readiness of the system for release to the public will be evaluated during the evaluation phase. Updates to the virtual transponder app and the gamified ZeroTraffic website will be made as needed.
  2. Production Roll-Out Phase: planned to be of 2 months duration. ZeroTraffic

will be rolled out over all territories over this period. Updates to the virtual transponder app and the gamified ZeroTraffic website will be made as needed.

  1. Operation Phase: ZeroTraffic: will be fully operational and supported across all territories. Data and results will be collected and analyzed. Improvements will be made to the virtual app and the website as necessary.

The Verdict

While I do believe that ZeroTraffic is tackling a substantial problem and potentially lucrative investment opportunity, it seems that the team really does have its work cut out for them. On the basis that the ZeroTraffic team can execute everything they are aiming to, they will do a great service to their investors, commuters, and society in general.

That being said, there are a few important things to note.

Risk

  • One of the greatest risks in my opinion is that the ZeroTraffic site and whitepaper constantly reference the importance of hitting 10% of commuters in order to achieve behavior modification. It seems that they’ve locked themselves into a “chicken and egg” problem, where initial users and investors won’t see the direct benefits other than a potentially beneficial change in their personal traffic patterns. Objectively, 10% is a very big chunk of the millions of cars on the road during rush hours. -2
  • People may be locked into their commuting schedules. There isn’t much ZeroTraffic can influence if many people need to go to work and leave at the traditional 9 to 5 time. -1
  • Lack of marketing experience on the team. While the ZeroTraffic team does have some significant firepower in building and innovating the project, I don’t see any substantial marketing force that could help them reach massive user adoption. -3
  • The history of the parent company is mainly linked with providing software solutions to government institutions, and the government adoption route can be an incredibly red-tape laced process, especially for a Toronto-based company trying to tackle traffic in some of the most densely populated cities in the United States. -3
  • The use of non-monetary incentives for commuters might be slightly on the idealistic side. The whitepaper claims that the gamification aspect of offering points, badges, levels, status, etc will be “addictive like computer games because we will seek to put users on a dopamine treadmill.” While this may be appealing to some users, ZeroTraffic needs user adoption on a much more massive scale and the preference for non-monetary rewards could be a bit overemphasized. -2

Growth Potential

  • I’ll be the first to say that I absolutely abhor traffic, and I’m far from being the only one. It’s an antiquated dinosaur approach to work commuting and is reflective of one of the biggest inefficiencies in society. It’s not only an issue limited to a handful of countries either. Traffic is a global nuisance. There has also been extremely limited efforts to change this by government agencies. We’ve gotten to the point that entrepreneurs such as Elon Musk are planning to dig underground tunnels just to minimize the problem in select cities. That’s why the growth potential for ZeroTraffic is huge. +3
  • Although the huge maximum token supply of 300,000,000 ZTT makes me a bit uneasy in terms of capital gains, I like the idea of a 4% annual dividend based on territory size. +3
  • If executed properly, the gamification aspect can be a gamechanger. ZeroTraffic essentially provides commuters an interesting incentive to travel at a different time, and it gives investors the opportunity to own a small district and take a small piece of responsibility for their community. +3
  • I’ve yet to see any schematics of the app, but from what I’ve read in the whitepaper it sounds like it’s going to be a very user-friendly “set and forget” sort of app. It also utilizes the fact that nearly everybody has a smartphone, and aims to modify user behaviors using this at an extremely cost effective rate. +2
  • It could save governments a ton of money. Building roads and using tolls is an extremely expensive and unpopular way to deal with the increase of traffic. The ZeroTraffic team also has experience in dealing with government institutions. +2

Disposition

We arrive at a +2 of 10 for ZeroTraffic. The concept, team, and massive traffic problem they are looking to tackle give ZeroTraffic a ton of positive points. However, at the other end of the spectrum, there are a lot of things that the team has to execute in order to achieve substantial success.

Investment Details

The ICO ends in 22 days. To see more details on the ongoing sale, go to https://www.zerotraffic.io/crowdsale.

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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4.5 stars on average, based on 17 rated postsAlex Moskov is a writer and entrepreneur with a passion for building and creating awesome things. Alex has experience in music tech startups, digital marketing, and cryptocurrency investing.




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3 Comments

3 Comments

  1. jagrmeister

    September 23, 2017 at 10:44 am

    A 6 is a seriously high score when it comes to Hacked; I’m not sure this ICO warrants it.

    >Investors with a minimum of 1250 ZTT become a “Deputy Mayor” and can buy a specific district they are able to advise the ZeroTraffic team on the congested regions.

    So you pay tokens just to be able to “advise” the company on busy regions? You pay to do work for them? This instance is just an example of the entire project’s inability to understand human nature and incentives. While it’s everyone’s goal to reduce traffic, it’s not clear how everyone contributes financially to make it happen; the logical path is to work with municipal governments and agencies but that is a long sales cycle and city planners have a lot on their plate besides business development with an app like this.

    People will not take alternative routes for virtual badges; at least not enough to reach critical mass described above.

    This whole project seems poorly thought out; more like an undergraduate student’s paper for an urban planning course, full of noble intention but lacking practical business sense.

  2. cryptonoob

    September 25, 2017 at 5:44 am

    Seriously 300M tokens and a 250 ZTT / ETH ratio is an enourmous deal breaker.
    And you give it a 6 ?

    • Alex Moskov

      September 26, 2017 at 10:50 am

      After further analyzing the scoring gradient, I updated the ZeroTraffic score to a +2, that should be a bit more accurate.

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ICO Analysis: Solana

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Scalability, scalability, scalability.

Scaling blockchain for the next level of (mass) adoption is the name of the game these days.

Solana is yet another contender to jump into the fray to become the most scalable blockchain and boasts the capability to handle 710,000 transactions per second with normal, off-the-shelf hardware and no features like sharding (a popular scaling proposal which proposes splitting a blockchain into shards or pieces that can process transactions simultaneously instead of having one, overloaded blockchain).

Here’s how.

Proof of History

The staple of Solana that will allow for unparalleled speed is Proof of History. Proof of History timestamps transactions in the blockchain so that nodes can verify the time and order of transactions without witnessing them firsthand.

This has the end result of optimizing Solana’s processes drastically by greatly reducing messaging between nodes and making the processing of transactions separate from consensus.

Here are some other features of Solana:

Sub-Second Confirmations

Older projects like Bitcoin not only have lower transaction rates but also have slow finality or confirmation of transactions as transactions have to be confirmed multiple times before becoming finalized.

Similar to project Perlin, Solana uses the Avalanche consensus protocol, which will allow for transactions to be fully confirmed within seconds, if not less. No more waiting minutes, hours, or days to pay for that coffee using crypto.

Proof of Replication

As of writing, the Bitcoin blockchain is nearly 180 gigabytes. Not everyone has that amount of storage capacity. Solana’s solution for ledger storage is Proof of Replication, which makes it so that not every node has to storage a full copy of the blockchain. Instead, each bit of Solana’s data is replicated to a dedicated storage node.

This means that the network can prove that a node you don’t trust is using its resources to store part of the Solana ledger. The end result is that the network is like a torrent, with no one node holding a full copy of the ledger yet a copy of the ledger is always available.

Broad Smart Contract Language Support

Instead of limiting developers to a single smart contract language, Solana will support any language supported by LLVM, starting with Javascript and Solidity.

Usage by the Next Generation of DApps

Thanks to Solana’s high transaction throughput, Solana could become the platform for the next generation of DApps that process tons of transactions like decentralized exchanges, payment platforms, decentralized cloud storage and web services, decentralized ad exchanges, and prediction markets.

Token

Details on Solana’s token and its token sale are sparse.

For the token itself, since Solana is aiming to be a platform like Ethereum or EOS, it’s assumed that Solana’s token usage will be similar to that of the aforementioned projects.

As for the token sale, interested investors can submit their interest in contributing via Solana’s presale interest form.

Team

CEO Anatoly Yakovenko – Yakovenko created Solana and has deep tech experience, having led operating system development at Qualcomm, compression at Dropbox, and distributed systems at Mesophere. Other achievements include being a core kernel developer for BREW (powered every CDMA flip phone – 100m+ devices), holding 2 patents for high performance operating systems, and leading development that made Protect Tango (VR/AR) possible on Qualcomm phones.

CTO Greg Fitzgerald – Fitzgerald is Solana’s principal architect and also worked at Qualcomm at the Office of the Chief Scientist.

Head of Growth Hsin-Ju Chuang – Chuang leads Solana’s community and growth efforts. Her track record is pretty solid, having been the former Head of Growth at Stellar, a top blockchain project.

Partnerships, Biz Dev Alan Yu – Yu is in charge of Solana’s business relationships and comes from Google, where he spent 10 years in sales and marketing and won various awards for his performance.

Partners

Solana’s partners include the following:

  • globaliD – globaliD is an identity provider, which has venture support from the likes of 500 Startups.
  • Hard Yaka – Hard Yaka is an investment fund with investments in companies like Coinbase, Ripple, Filecoin, ShapeShift, AngelList, twilio and exits from companies like Square (IPO), Twitter (IPO), Authy (twilio acquisition), and more.
  • Helium is the world’s first decentralized, blockchain-powered machine network with investment from the likes of GV (Google Ventures) and Marc Benioff, founder, chairman, and CEO of Salesforce.

Verdict

Below is a breakdown of the risks and growth potential of Solana.

Risks

  • Bold claims re: scalability and throughput. The team has claimed to have achieved hundreds of thousands of transactions per second on their testnet but the testnet isn’t public (-1)
  • Details on token and token sale not released yet (-0.5)

Growth Potential

  • Strong team and partnerships (+3)
  • Github work impressive (+2)
  • Solid hype and social presence (+2)

Disposition

  • Solana is a project with a lot of potential. Though tons of blockchain projects claim that they’re going to fix blockchain’s scalability woes, Solana might just have the actual team and partners to make that vision a reality. For now, we recommend keeping an eye out for further developments.
  • Solana receives a 5.5/10

Investment Details

  • Type: Unspecified – presumably utility
  • Symbol: Unspecified
  • Platform: Unspecified – presumably Native
  • Crowdsale: TBA
  • Minimum Investment: Unspecified
  • Price: Unspecified
  • Hard Cap: Unspecified
  • Payments Accepted: Unspecified
  • Restricted from Participating: Unspecified

For More Information

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: BitSong

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The music industry is ever-evolving alongside new technologies. Smart contracts and blockchain are currently changing it again. Over the past year, numerous music blockchain projects have come onto the scene as ambitious entrepreneurs try to get in on the action.

BitSong, is an Ethereum based project that wants to put the entire process on one platform. Music creators will stream their songs or videos, manage their fanbase and work out advertising deals all on the BitSong Platform.

According to the whitepaper:

“The BitSong Platform will be a holistic one -stop shop approach, choice is given to the user, to watch videos, stream music and have the ability to use whichever device they own to partake in Bitsong. This also permits the artist to manage their social media fanbase from one source, their Bitsong channel, thereby retaining their fans on one single decentralized music platform”

The platform allows users to do the following;

  • Upload new songs/videos and create your own music channel.
  • Sell your songs, listen to them and get donations.
  • Earn BTSG token during your plays.
  • Support the artist by making a donation through the BTSG token.
  • Listen to your songs on any TV, Smartphone or PC.
  • Sponsor your business or your songs in full autonomy.

Perhaps the coolest feature of BitSong will be how they incorporate advertisements into the platform. The user will be paid for their “User Attention,” the producer will receive earnings in real time and the advertiser will be able to optimize the campaign after viewing the reports.

Token

The BTSG token will be essential for: sponsorship, making a donation, purchasing a song, voting, buying tickets and purchasing merchandising.

Use of funds:

  • 50% Business Development and Expansion
  • 15% Technology and Logistics
  • 15% Research and Development
  • 20% Marketing and PR

Two percent the tokens were sold at a 40% discount during the pre-sale in late May.

Team

This is a rather large and spread out team. Lots of different countries involved and most of the team are former DJs/producers.

Angelo Recca: Co-Founder/CEO from Italy. LinkedIn says he has been CEO of this cloud storage company SpazioRC since 2012. Spazio has only one employee listed on LinkedIn and the twitter only has 340 followers and hasn’t been active since Novemebr 2017.

Rino Ticli: Co-Founder. The only work history listed is “DeeJay” since 2002. He doesn’t seem to be a very popular DJ/producer, either. He’s had Twitter since 2012 yet only has 800 followers that give him zero love or retweets.

Julian Anghelin: EMEA Manager. Despite typing a long and vague description of his skills, the only work history he has listed is as a publications guy for Royal Caribbean Cruises for ten months in 2016.

Giovanni Melfi: CTO and Blockchain Developer. Out of the 12 team members, he is the only developer. And it looks like he has no work history to brag about. He did describe himself on LinkedIn as follows:” Passionate about cryptocurrencies and blockchain, 2 languages speaker. Coming from an experience in software engineering and a passion for software development with some programming languages such as PHP. I participated in some group work on the robotic system, on linux programming and on StartUp Manager, and I think these experiences are the most important for professional growth.”

The website goes on to list 19 international DJs/producers that are supposed to be a part of BitSong. However, after checking all of them, only a couple ever mention BitSong. No mentions of the token sale.

The most popular is a guy named Tadeo, who gained almost 300,000 Twitter followers for being on an MTV reality show. He does not mention the BitSong crowdsale on his twitter.

Nicola Fasano is a DJ with 16,000 followers on Twitter.

Mossel is a DJ with 10,000 followers but doesn’t mention Bitsong ICO

Verdict

We usually don’t do analysis on projects that already had their pre-sale. However, after seeing these ratings, it seemed like our opinion was needed. These high scores are out of line. The only explanation is that the reviews were done a few months ago, before the bad news bears arrived to spoil everyone’s shill fest.

Nobody here expects YouTube, Spotify and record companies to just step aside while smart contract/blockchain projects move in. Said blockchain projects needs to be extra special with an extra special team in order to even stand a chance of competing.

Based on team inexperience and lack of MVP alone, this gets an unfavorable rating.

Risks

  • The team is not experienced at all in business or blockchain. -1
  • It doesn’t look like they will come close at all to reaching the hard cap. They have a large team and payroll. It’s going to take a long time for both BitSong and Ethereum to work properly. There’s a strong chance they run out of money by then -1
  • No MVP, only one blockchain developer listed on their team, plus many other small things that lead us to believe they might not be really trying to build this thing. -1
  • GitHub is not active at all. This supports the above theory. -1
  • Competition. The author has reviewed 4 different blockchain music ICOsin the last year. He ranks this one 3/4. -1

Growth Potential

  • Ambitious roadmap on page 15 of the whitepaper. +1
  • One of these blockchain music projects is going to be popular. BitSong has an outsiders chance. +1
  • The crowdsale will run for three months, ending in November. Perhaps the market will be bullish by then. +2
  • They make a really bold claim on their site about having 177,404 users. When asked who these users are, the reply was, “177,404 users interacted with our bot and registered in our wallet.” This is kinda hard to believe, but if true those type numbers will definitely help them scale. +3

“Together with our community (about 180,000 users) we want to create a special environment, a new way to hear, see and enjoy music,where every artist can be his own distributor, sponsoring it on world music channels, where clarity and transparency rule and users can be rewarded for listening and viewing advertising.”

Disposition

It’s just way too good to be true. The silver lining is that we’ve seen several projects succeed in the past with this same strategy. A brilliant whitepaper idea with no MVP, and an untested team. However, in today’s paranoid market, most investors are now needing evidence of work, not just a whitepaper and a dream. +2/10

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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4.1 stars on average, based on 23 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: Hedera Hashgraph

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Hedera Hashgraph is another project in the blockchain space aiming to take blockchain to the next level: fast and ready to take on widespread usage by the mainstream as well as enterprises.

Currently, distributed ledger technology faces a number of challenges:

  1. Scalability
  2. Security
  3. Governance
  4. Stability
  5. Regulatory Compliance

Hedera Hashgraph’s team believes that only when these challenges are addressed and surmounted will mainstream markets trust blockchain enough to adopt it en masse.

With regards to the aforementioned challenges, Hedera Hashgraph aims to address them in the following ways:

  1. Performance – Hedera is built on the hashgraph distributed consensus algorithm (“hashgraph” also is used to refer to Hedera’s blockchain), invented by Hedera’s CTO and Chief Scientist Dr. Leemon Baird, who worked as a Professor of Computer Science at the US Air Force Academy and has multiple patents and publications in peer-reviewed journals. According to the Hedera Hashgraph whitepaper, the platform can handle hundreds of thousands of transactions per second in just one shard (let alone the entire network). Confirmations also happen in seconds and not minutes, hours, or days.
  2. Security – Hedera Hashgraph is secure through asynchronous Byzantine Fault Tolerance (aBFT). While other platforms are susceptible to Distributed Denial of Service (DDoS) attacks, the hashgraph platform isn’t. Moreover, aBFT provides both fair access and fair ordering for transactions on the platform. Appendix 3 of the whitepaper gives a full definition of the hashgraph algorithm and its fairness properties as well as proofs of aBFT.
  3. Governance – Hedera’s governance consists of Council Governance (management of council concerns) and Consensus Model (determining transaction consensus order).
    • Council Governance is done by an elected Governing Board that deals with council membership policy, network token regulation, and platform codebase changes. The Governing Board will consist of up to 39 leading organizations in their respective fields, bringing expertise previously lacking in past blockchain platforms.
    • Consensus Model deals with how nodes reach consensus on the platform’s order of transactions. In the Consensus Model, nodes cast one vote for each Hedera token that they own and since many nodes are expected to join the network and be compensated for maintaining the hashgraph ledger, it’s expected that Consensus Model voting privileges will be distributed amongst thousands of nodes.
  4. Stability – Hedera Hashgraph’s stability will be ensured with both technical and legal controls.
    • Technical – Hedera Hashgraph has Swirlds technology, which has the effect of protecting users of the platform from unofficial forks of the platform as well as ensuring that only software clients running the latest version are able to modify the hashgraph.
    • Legal – The Hedera Hashgraph codebase will not be open-source but be available for public review so that anyone can read the source code, recompile it, and verify its legitimacy. No licenses will be required to use the platform, write software that uses the platform, or build smart contracts on the platform. Thus, Hedera will provide a transparent codebase open to innovation so that the market can use it for its own purposes.
  5. Regulatory Compliance – Hedera has an opt-in escrow identity mechanism that gives users the choice to attach verified identities to their otherwise anonymous cryptocurrency accounts. Therefore, on the one hand, anonymous users can maintain their anonymity, and on the other, users that need to be verified for official purposes can do so without having to worry about regulatory backlash.

Token

By replacing proof-of-work consensus mechanisms with virtual voting (nodes cast one vote for each Hedera token that they own), high throughput, low fees, and micropayments are all made possible.

DApp developers on the network will use Hedera tokens to pay for network services like processing transactions, executing smart contracts, and storing files.

As mentioned earlier in the analysis, anyone running a node will earn Hedera tokens for doing so. The amount they earn is proportional to the amount of Hedera tokens they stake in one or more accounts for which they have the private keys. (This stake is also used to weight their votes in the Consensus Model). However, users are still able to spend their stake at any time – though of course spending some of the stake means receiving less rewards for running a node.

Users who don’t want to run a node (e.g. not wanting to invest in computing resources and/or the maintenance of them) can “proxy stake” Hedera to someone else’s node. This means that the user with no node gives a node “credit” for their stake and splits ledger maintenance awards with the node that they credit with their stake. (The ratio of the split is negotiated between the two parties). Proxy stake funds are in control of the proxy staker, who can spend the stake at any time, turn off the stake, or even redirect the proxy stake to another node.

As mentioned, fees are low, but they do exist. There are node fees, service fees, and transaction fees:

  • Node fees – a platform user can use platform services (e.g. transferring crypto from one account to another) by contacting a node, which submits the user’s transactions. The platform user pays a fee, negotiated between the user and the node, to the node for its service.
  • Service fees – users that use platform services (e.g. storing a file in the hashgraph) without going through a node pay a service fee.
  • Transaction fees – transactions handled by the network incur a fee to cover the associated costs of nodes exchanging data about the transactions, temporarily storing them in memory, and calculating consensus on the events containing them.

Token distribution is “expected” (taken from the Hedera Hashgraph crowdsale FAQ – “What is the token distribution?” section) to be as follows.

  • 65% Hedera Council Treasury
  • 17% management and employees
  • 13% SAFT purchasers and developers
  • 5% Swirlds

Hedera has already raised $100m in funding from institutional and high net worth investors and is currently conducting an accredited investor crowdsale ($20m target).

Accredited investor verification (whitelisting) will stop when $20m in funding is reached or August 15th, whichever comes first.

Token price and token release schedule for both first round and accredited investor round are the same:

  • Option A: $0.12 per token. 20% of tokens issued six months after network launch, with the rest vested in 10% installments over 8 months.
  • Option B: $0.096 per token. 20% of tokens issued six months after network launch, with the rest vested in 20% installments over the subsequent 4 years.

The majority of founder tokens are vested in 4 to 6 years.

If all funding goals are met, the project will start with a $360m market capitalization (based on expected circulating supply on day of token release).

Total token supply is fifty billion.

The offering is a Simple Agreement for Future Tokens (SAFT) in accordance with SEC regulations and there will be no ICO.

Minimum contribution is $1,000, and maximum contribution per person is $250,000. However, investors who want to invest >$250,000 can email saft@hashgraph.com (?), according to the Hedera Hashgraph crowdsale FAQ, which is confusing.

All raised funds will be used to grow the platform (engineering, sales, marketing, developer advocacy, community development, legal, etc).

Team

Co-Founder, CTO, and Chief Scientist Leemon Baird – Baird invented the hashgraph consensus algorithm, has worked as a Professor of Computer Science at the US Air Force Academy, has a PhD in Computer Science from Carnegie Mellon University, and has many patents and publications in peer-reviewed journals and conferences in the fields of computer security, mathematics, and machine learning.

Co-Founder and CEO Mance Harmon – Harmon also has an Air Force background as former Course Director for Cybersecurity. He was also Program Manager of a large-scale software program for the US Department of Defense’s Missile Defense Agency and senior executive for product security of an unnamed $1.7b revenue organization.

President Tom Trowbridge – Trowbridge is President of the Hedera Hashgraph Council and has a strong finance background, having started and ran the New York Office of UK-based Odey Asset Management. He also has held positions at Goldman Sachs, Lombard Odier, Atticus Capital, Bear, Stearns & Co., and telecom and media private equity firm Alta Communications, where he was responsible for 10 deals.

Verdict

Below is a breakdown of the risks and growth potential of Hedera Hashgraph.

Risks

  • Very bold claims but no working product (-1)
  • High hard cap and initial valuation but other projects that have done well have had the same (though uncommon) (-0.5)
  • Similar to EOS – bold claims, no working product, lots of hype – except the EOS team probably had a more relevant background (CTO Dan Larimer was behind popular and proven projects like Bitshares and Steemit) (-0.5)

Growth Potential

  • A lot of hype (e.g. large Meetup community) (+4)
  • Some DApps have already committed to the platform, and many developers are interested in the platform (e.g. their developer – not general public – Discord channel has nearly 5,000 members as of writing) (+4)

Disposition

  • Hedera Hashgraph promises to pack quite the punch similar to projects like EOS. The hype is definitely there, but can the team deliver?
  • Hedera Hashgraph receives a 6/10.

Investment Details

  • Type: Native – Utility
  • Symbol: Unspecified
  • Platform: Native
  • Crowdsale: Ongoing
  • Minimum Investment: $1,000
  • Price: $0.096 or $0.12
  • Hard Cap: $120m (institutional round and accredited investor round combined)
  • Payments Accepted: BTC and USD (via wire transfer) – can’t mix BTC/USD to pay for one SAFT (but can purchase two SAFTs separately using BTC for one and USD for the other)
  • Restricted from Participating: The SAFT is being offered to accredited investors in 63 countries. (Anyone from a country NOT on the following list is restricted from participating). The countries are: Andorra, Argentina, Australia, Austria, Belgium, Bermuda, Brazil, Virgin Islands (British), Bulgaria, Canada, Cayman Islands, Croatia, Cyprus, Czech Republic, Denmark, El Salvador, Estonia, Finland, France, Germany, Gibraltar, Greece, Guatemala, Honduras, Hong Kong, Iceland, India, Republic of Ireland, Isle of Man, Israel, Italy, Jamaica, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Moldova, Netherlands, New Zealand, Nicaragua, Nigeria, Norway, Panama, Poland, Portugal, Puerto Rico, Romania, Saudi Arabia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, United Arab Emirates, United Kingdom, United States.

For More Information

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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