There’s no escaping the explosion in ICOs, there seems to be one for everything from dental records to sex services and everything in between. However, despite the derision that accompanies this latest fad from old guard hodlers who made their fortune buying into bitcoin at three figures and Ethereum at two figures, there is still a very strong case to be made for participating in ICOs as a way of boosting your portfolio value; the difficulty comes in finding the lone diamond in the rough.
I first came across this gem in an article by AltCoin trading and decided to dig deeper into it using my ICO investment checklist.
First though an overview. RefToken is a distributed affiliate marketing platform that aims to empower the scrappy blockchain startups of today to fight toe to toe with their incumbent competitors using a performance marketing model (i.e. they will only pay sites and marketers a fixed fee for each sale they refer). The platform also promises to eliminate affiliate fraud and breaches of trust at both ends by using the blockchain and smart contracts to govern deals. So far so good, but can the team deliver and is there enough value in there to merit investing your ETH in the project?
What is the purpose of REF tokens?
REF Tokens (see what they did there?) are a utility token and will be used by merchants to pay affiliates for referring users. The token is the fuel that runs the platform, and the architecture dictates that campaign funds are locked in escrow for the duration of the campaign (further reducing circulating supply).
The low issuance is very nice, with just 50M tokens issued, of which 22M will be in circulating supply. The 20% is reserved for employees and will start vesting after one year which is reassuring. 30% are locked in a market-making fund to protect against pump and dumps. This is a very innovative concept, which I really liked. The flip side of this is that tokens are priced at €1.29, which means nothing from a valuation point of view, yet might be a turn off for those who like to get thousands of tokens for their ETH. That said this was also the strategy that Gnosis followed, and everyone knows how well that did.
What is the value potential of the token?
The low cap, together with the utility of the token auger well. Nonetheless, the 100% bonus on the presale makes it a relatively safe bet if you aim to enter with a sizeable amount and flip half once the token hits the exchanges.
What is the white paper like?
Long, but well written in a manner that doesn’t attempt to blow you away with the author’s knowledge of a blockchain’s technical implementation. Rather it explains the market in its current and future states, the opportunities presented by the current shortcomings in the sector and how they are going to be resolved. Oh, there’s also a 3-year financial plan, indicating that the team actually know how to run a business.
What stage is the project at?
There is no Github to follow progress on, so there is no way of tracking progress on the project. There is also no clear technical explanation on how the project will deliver from a technical point of view, and it could do with a yellow paper. Nonetheless the team have a demo platform up, which looks very pretty and seems to work very well, with none of that buggy interface experience that blockchain teams seem to be so great at creating. I’m not an affiliate marketing pro, but suffice to say that if their prototype works nicely, I have a degree of confidence in their ability to release a product that is actually workable by enterprise customers. Moreover, the team have promised to release their proof of concept by end November, which is mid-way through their ICO, this is unheard of in the ICO world and if there was ever a fitting instance for moon/Lambo predictions, THIS is it.
The roadmap predicts a full launch in 2019, which is a fair bit far away, albeit a more realistic time-frame than many ICOs are proposing when one considers the time taken to launch a platform on this scale.
This falls in a couple of categories. How safe are investor funds from the founders making a run for it, and how safe is the ICO from hackers? The former seems to have been taken care of by engaging a government licensed fiduciary to hold their multisig keys (there’s an announcement on their Twitter and FB that explain the partnership). This means that should something awry happen to user’s funds a head would roll, an investigation will be started, and, most importantly, an insurance policy will kick in. Sweet.
The second is harder to assess however, they have gone through the work of engaging Ambisafe to manage their ICO and have released their own wallet, meaning that many attack vectors such as altering the wallet address on their website have been eliminated.
RefToken seems to be an actual registered company located in Malta (I needed to Google it too). If you do Google it, you’ll find that its actually a good place to launch this project as
a) the government is determined to make Malta “a centre of excellence” in Blockchain tech. b) some of the world’s largest online gambling companies are located there due to the country’s tax breaks and robust regulatory framework.
They also have their office address on site.
Founders and Team
As the AltcoinTrading article stated, the team (shock horror) has actual experience in running a business, although not all of them have experience running a blockchain business, so that might be a consideration. They hail from the gambling, software, finance, blockchain, affiliate and legal sectors. Arguably this is a subjective preference as for many in the ICO sphere, the possibility of picking the next Mark Zuckerberg outweighs experience.
This is ultimately what any form of venture funding boils down to. You can make greater returns from backing a business that solves a real problem and executes acceptably well than one that executes phenomenally in solving a non-existing one. The key points RefToken proposes to solve are:
• Eliminating middle men such as Google’s AdSense platform that retain large percentages of the revenues that sites generate through selling advertising by connecting them directly with the advertiser
• Eliminating affiliate fraud
• Using escrows to prevent merchants withholding payments to partners
• The cash flow issues that come about from the current monthly pay cycle where sites spend money on a daily basis to generate traffic for which they’re paid at the end of the month
• Allowing greater accuracy in defining a conversion via their drag and drop smart contract editor (ouch if you bought into the BlockCat ICO)
Judging from the above there seems to be a decent opportunity to build a solid P2P online marketing solution (if not to overthrow the big G). They also seem to be the only team currently building such a platform, meaning that they have a head start on copycats.
They’re aiming on raising a not insignificant €25.5M, with a hard cap of €48M, which they state on site will be used to accelerate development, build additional modules and fund their sales and marketing teams.
All in all I’d give this project an 8.5/10
Erika Zammit is a crypto blogger and hodler who actively seeks out value ICOs for long term capital appreciation. She prefers Astons to Lambos.
appreciation. She prefers Astons to Lambos.
Thanks to Erika for a great guest post. I don’t know about you, but she convinced me about the merits of Reftoken. If you want to come and join us over there, jump aboard the rocket here.