Hello Spheris,
I think this is a great idea and this market niche can and should be filled.
GameCredits/MobileGo is already doing something very similar with moderate success.
I do extensive research in everything I want to invest in, so I read your entire white paper and explored your entire webpage.
After my extensive research, I am almost certain this will not work out.
You can prove me wrong but let me list my reasons and questions.
Reason 1:
2 TRIL Supply.
Token Price = Market Cap / Supply.
Assume Cap is 87M, which would already be a generous assumption for an ICO with no working MVP until 2018.
Supply is 2 TRIL. Price is 87M/2TRIL = $0.0000435 USD per token. 1 Satoshi is the same price at the moment of this posting.
Market cap needs to be 87M now for each token to be worth 1 satoshi, not 50M as stated in the outdated Whitepaper.
It is unlikely and unrealistic to expect $87M+ ICO with no Minimum Viable Product until 2018 and a team of 4.
Most ICOs do not raise that amount nor is there a need to raise that amount.
Expected Outcome: ICO raises less than $87M, making these tokens worth less than 1 satoshi.
Now they'll never be traded until the market cap hits $87M, which is never because the market cap won't move as it won't be traded.
Unlikely Outcome: ICO raises $87M+, securing the 1 satoshi level for this token to be traded at. There are market dynamics and 1 satoshi sell wall will drive potential investors off, as there is an abundance of potentially great investments at the moment that does not look like its blocked by a massive 1 satoshi sell wall. Even if there are buyers it will just look like no one is buying because there will be no buy orders as those will be instantly gobbled up by sell wall at 1 satoshi, and the 500% bonus can contribute to this. It will be a challenge to pass the 1 satoshi hurdle that should not be risked in the first place which can be simply fixed by lowering the 2TRIL supply to 200BIL. The ICO would have to raise $200M+ so the pricing can start at 2-3 satoshis for me to feel comfortable. It will leave some leeway for the potential increase of BTC price or fluctuation in this token, as well as staying away from 1 satoshi. I outline later why 1 satoshi in my opinion is not a good idea and will be more harmful than beneficial, for having 2TRIL tokens.
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Reason 2:
Absurd 500% Bonus.
Absurd Bonuses overall.
But I analysed it.
It's not really 500% on Day 1.
Interesting sales tactic, but this can in actuality be simplified to 340,500 SPRS / ETH, with 300% / 167% / 100% / 33% / 0% bonus.
With this kind of bonus and gap, the sell orders at 1 satoshi level will be there for a long, long time.
This kind of bonus is unprecedented even among scam ICOs.
Eventually this will not increase liquidity, but rather decrease it as people are seeing there is no profit to be made.
There might be profit but that's not how it works, when people see this massive sell order wall at 1 satoshi, they will be driven away.
They will feel less incentivized to buy in.
Because any buy orders will be instantly fulfilled at 1 satoshi level, leaving a massive sell orders at 1 satoshi level.
There are plenty of other promising coins to invest in that they can find that doesn't look like it has such a hurdle.
The hurdle to break from 1 satoshi to 2 satoshi level is not easy, a 100% increase.
Let's do some math.
Let's be realistic here.
You raise $10M from ICO, and really, that's all you need, seeing as the team and advisors keep 15% as well.
Let's assume an even spread of buyers for each bonus tier.
(1,362,000 SPRS + 908,000 SPRS + 681,000 SPRS + 454,000 SPRS + 340,500 SPRS) / 5 = 749,100 SPRS per ETH on average.
ETH = $325 currently.
$1 USD = 2305 SPRS.
$10M * 2305 SPRS = 23,050,000,000 SPRS
Now since 1,240,000,000,000 was on sale, the proportion of sales we achieve is 23,050,000,000 / 1,240,000,000,000 = 0.01858870967
Which is the equivalent of 1.85887% of the sale.
This means the remaining SPRS will be spread among investors proportionally by 53.7960954447 times multiplier.
Thus, each $1 USD = 2305 SPRS * 53.7960954447 = 124,000 SPRS.
Or we can say, $1 USD = 22,745 Satoshi = 0.00022745 BTC = 124,000 SPRS.
The average investor gets 124,000 SPRS tokens per $1 USD, which should be worth at least 22,745 satoshis or 0.00022745 BTC to break even.
Meaning each token should be valued at 0.18342741935 satoshis, which is impossible.
We have to wait until the market cap is worth 87M+, then the valuation is 1 satoshi.
Expected Outcome: Bonus gap and outrageous bonus for early investors will lead to mass selloff for a long time, especially since MVP comes 2018. If starting price is 1 satoshi, I am confident the liquidity will just decrease over time until the platform is up and running next year, which begs me to question why have an ICO now? The decisions made by this team is highly questionable. If the starting price reaches 3 satoshis by some divine luck with hundreds of millions of dollars being poured in for ICO, you can darn expect with this bonus model that it will be driven down to 2 and then 1 satoshi.
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Question 1:
If the ICO raises under $87M, how will we reach $87M if no trading is going on so that this coin will be worth 1 satoshi each? According to your whitepaper, you will not list it on exchanges until it hits the market cap necessary to trade at 1 satoshi. This does not make sense. How will the market cap move without trading taking place? Market cap is simply calculated by Token price * Supply. Token price will not move itself without trading.
Question 2:
Why 2 TRIL tokens? you said in White Paper to avoid fractions and market scalability and greater liquidity with narrow bid-ask spread.
There is a problem here. With 2 TRIL tokens we won't even hit the 1 Satoshi mark realistically to get off the ground first. It's like building a giant wall in front of yourself, and trying to jump over to take off, but more than likely you'll just run into the wall and fall. This is complete overkill as Ripple, which is likely to be adopted by banks one day, only has 38BIL tokens, not 2000BIL tokens. Bytecoin, which you should and could use as a great example, has 184BIL and trades for 33 Satoshis or $0.0001435 USD, with a 260Mil market cap. If your coin gets stuck at 1 satoshi massive sell wall it will be dangerous and more harmful than beneficial for the decision to create 2 TRIL tokens. Yes, 2 TRIL tokens is your dream target, but realistically speaking here, unless you have 200M+ already in investors that see the promise of your product, then 2 TRIL tokens will lead to its demise. If you want 2 TRIL tokens that bad, cancel the ICO, work on it until 2018, do ICO in 2018 when you see opportunity of the next ICO/crypto craze round.
Question 3:
What about ETH? Tokens are more likely to make it on EtherDelta before big exchanges like Bittrex or Poloniex. Can we trade these tokens for ETH denominations?
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Review:
Market Need: 9.5/10 - In short, developers are getting screwed by centralized fees that take ~30% of their revenues from them, this can help
Blockchain Fit: 8.5/10 - Payment through these tokens can remove the need for fees
Founding Team: 7/10 - Extremely talented team, however no prior projects of a similar scale has been attempted by this team
Blockchain Talent: 8.5/10 - Blockchain enthusiasts, I have no doubt can get the job done, however there is no MVP yet
Equitability: 0/10 - Absurd bonus gap for ICO, absurd token supply, absurd ICO "cap", everything was absolutely outrageous
My Suggestions:
Option 1: Stop and come back next near for ICO after you have MVP. Why try to fit in now near the end of the Summer crypto craze with nothing to show for it? This project would be so much more promising if it came back at the next wave of crypto craze with something that is actually working beyond a White Paper.
Option 2: Decrease 2TRIL to 200BIL so we can have 1 satoshi at 8.8M raised, a much more realistic goal. Even then I do not expect this presentation or ICO to raise much more than 8.8M, and a 1 satoshi level, in my opinion, is extremely distasteful. It definitely does more harm than good to have a 2TRIL token count.
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I put a lot of time investigating each and every investment that I make, and while you guys got the idea right, there are too many red flags for me to get involved in this. Good luck Spheris and to any investors. Hopefully you can prove me wrong or revise your arrangement.
