I have been thinking so long to start doing ICO analysis for the public, and from today I am going to start this. Lucky or not, “Accounting Blockchain” came to my attention at first when I was checking which ICO should I begin with.
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For the information part, I have been going through their whitepaper, onepager, etc. And the info I received has been divided into few sections.
By reading their whitepaper & onepager, I think the basic idea is to avoid data redundancy and errors in the invoice and/or accounting industry.
According to the video they have in their homepage, it says that for a product, let’s take ‘cake’, there is debt and credit since the beginning of the product, i.e. from ingredients of cake to the final product.
Integrating the Accounting Blockchain’s product, they say that they can:
- reduce data redundancy
- reduce errors
- cut the final cost of the product
The only problem I see in this is, the buyer and the seller have to integrate Accounting Blockchain as well as complete this learning curve to use it along with learning about the new system of Cryptocurrency, as AB token (the native token of Accounting Blockchain) is the one used in this product. Which according to me is a considerable learning curve altogether, which according to their video, they say, is more than disruptive for a 500-Year-old system!
Also, if we check more deeply, in this system, one has to enter details, and the other still have to verify the same. Also, the error factor persists. Just by using blockchain won’t eradicate human error, rather than actually making the work more, considering if one party makes a mistake, due to blockchain’s immutable nature, the correction has to be approved by both parties.
Need for Blockchain
If we come to the next section, i.e. the need for Blockchain in this project. Yes, I can agree that in the invoice industry, you can use blockchain for the same reason as Accounting Blockchain says, to reduce data redundancy.
But, have they selected the correct blockchain? Ethereum is one of the best blockchain out there, no doubt in that. But what they are trying to do, is to save data worth billions if not trillions in Ethereum. And without the scaling proposals becoming a reality in Ethereum, it won’t be a viable option.
Also, if we consider a global system, let’s say I am company A and I have dealings with company B. I don’t want to know the invoice details or would like to store details of invoices from other company unless it is rewarding in some way. So, rather than using the main blockchain for everyone, maybe they could have used side chains/channels for better scalability.
And for that, either they have to use some other blockchain or create their custom blockchain with their custom features depending on the needs. Because they are not the only company which are hoping to store data in the Ethereum blockchain.
Utility or Security
Based on the explanation they have given, though the AB Token is used for payment in the system, other than that, I don’t see any use of AB Token in their system.
Also, based on this video, they say they are integrating other cryptocurrencies to their suite as well, making the use of AB Token minimal.
Use of AB Token other than on their system according to me is NIL unless they make some partnership which exclusively accepts only their Token.
Until that, I think AB Token is a security, and to a great extent, a means to raise funds for their product development and business expansion.
According to their description, they don’t have an MVP at the moment. An alpha or MVP would be available only by December 2018 according to their roadmap. And as I have a technical background, my instincts say at best they will be able to launch by next year only.
Technical things take time and even though we think some particular timeline, at the first moment, hell breaks loose.
Team & their experiences
According to their Executive Summary, they have 10+ team members covering multiple areas of business.
Looking at the team’s position, it seems like a great team which can move forward with this business.
But if you give a closer look at the above line and the team, they seem to have more experience in the business and accounting sector. But if you check the development part, I don’t see a good number of developers.
Regarding experience, Nathaniel (Jamie) Borg, the CEO of Accounting Blockchain, seems to have fine experience in the Accounting Field according to the Linkedin Profile. Based on some research, Nathaniel is not linked to any other ICO’s yet as of writing this.
On a further check, it seems that Nathaniel Borg is connected to a company called “Malta Bargains Limited”. And he has been with the same company for the past few years, and he still is the Director of that company. Though this is just our finding and not a complete proof that both these persons are same. Though they both have some similarities like the county, Malta.
Considering the next team member, Daniel Cutajar, COO of Accounting Blockchain, this is the second job he is working on after 18+ years in Dinos Motor, where he was the Director. From his Facebook profile, he looks like a nice family guy. He is also not linked to any other ICO Projects.
Based on the experience written on Linkedin, it seems he has more experience in the Automobile industry than in Accounting. But as I believe that anyone can learn anything, I don’t want to discourage anyone with interest to learn anything.
Steve is the Blockchain Strategy Advisor, and Philipp is the Financial Advisor for Accounting Blockchain.
Steve looks equipped with all the required qualification in the industry and ready to help Accounting Blockchain with necessary help.
Funds Target, timeline & phases
According to their executive summary, the soft cap is at 4M while the hard cap is at 64M, which is about 16x times the soft cap.
I think that the soft cap should cover the necessary development and only those who cannot be traded off. While the hard cap to contain some overhead along with other useful but not compulsory things. But 16x the soft cap seems a bit high. But I like their soft cap limit of 4M, which is comparatively low, achievable, as well as have a lot of room to grow even after the token sale ends.
But the initial token price and the final token price (in the last phase) have a difference of 5x, which can result in a dump from the initial big whales (considering a minimum of $50K investors get 100% bonus).
Thus, at one point they may seem like giving a good offer, on the other, they lose that appeal, at least for me.
Regarding the timeline, considering the private placements as well, the sale is spread across four months or 120 days, which is a bit high than the average. Thus, in some way, the 5x low price is justified in one direction.
Regarding phases, according to the word they have used, it seems like they have “5/7 waves” of sale. An exact date was not available for each start and end of waves when we checked their website, at the time of writing this.
Funds Usage, Token Distribution & Valuation
The fund’s usage seems kind of normal except the human resource part, assuming that is related to hiring members of the team only. I can agree that for better talent, it costs money, but considering the soft cap and hard cap, it seems a bit high allocation.
I think it is now time that ICO’s consider a range in $ value rather than the % of fundraised for fund raised allocation. Example, considering this project reaches hard cap, 2% from 64M is for an unknown reason (others).
Regarding token distribution around 41–46% is for public allocation (Token Sale, Bounty & Program Rollout) and 10% for HNIs (High Networth Individuals). So kind of 51% is on the public hand, which is a decent amount to be available in different hands to avoid the concept of dumping in the market when the project is exchange listed.
Whereas, the founders, Nathaniel and Daniel together hold 5% of the entire token supply, which I think is a bit steeper than the average. Which if compared with the public sale amount is 1/8th of the total tokens which may be sold according to their will. The only relief is the vesting period, where they only have part of token available every six months till three years.
One thing I liked is that they have specified that those tokens which are not sold in ICO, will be burned. Though time will tell if they do it or not.
But if they do, out of the 37%, if some or any tokens are left, they will be burned.
Regarding Valuation, considering 37% is used to raise till 64M, they are valuing themselves around 173M! I hope I don’t have to answer why this is a huge valuation at this stage.
Even at the soft cap valuation, considering they reach only soft cap, i.e. from the 10% seed investor tokens (according to their token distribution) raising 4M, then they are valuing themselves at 40M, which is also, I think is a bit high valuation considering their current phase and the asset they have along with the team.
Social Media Activity & Engagement
Just going through their social media link listed on their website, I saw that they already have 5K likes on Facebook. But on the posts on the FB Page, they have just 50–150 likes, i.e. roughly 0.01–0.03% are active.
In twitter, they have a whopping 26.4k Followers! But only 100–200 likes at max for each tweet. And at the time of writing this, less than 35 tweets. Which tells us that the growth may not be organic.
In youtube, they have 2K subscribers and a range with high variation for the views to the videos. Some video has been viewed around 58K times, while some have just less than 200 views.
So, overall, most of the social media engagement looks fake or just due to the bounty.
There was no detail about the same while writing this on their website.
I want to say that this was the first time I have done a complete analysis of an ICO for the public. So please let me know if you want to see more parameters to be added to my review or want to give me some tips or want to correct me on my findings or even want to share some secret regarding the companies I would be writing in time.
The above was just an analysis for those who want to spend less time finding about the project. But please don’t consider this as an investment advice.
The above article was not paid for. And Accounting Blockchain didn’t knew about the same.
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