Crypto Primers: UTRUST
This is the continuation of my Crypto Primers series. At CoinTrackr Insider we love disruptive technologies. By potentially opening up a market of nearly $200 billion capitalization to merchants everywhere, this project does just that. An ambitious goal for company that could change the online payment industry forever
Vision
UTRUST is a new project that aims to disrupt the e-commerce industry by creating a cryptocurrency online payment gateway comparable to established providers such as Stripe, Braintree and PayPal.
Launching with 10 currencies and aiming to offer more in the future, they incentivize merchants by charging lower fees, preventing chargebacks and, ultimately, allowing them to tap into a market that had little to no purchasing power until now.
On the other side, UTRUST will make cryptocurrencies a secure method of paying online by offering protection for buyers using an in-house escrow and mediation solution.
In fact, the main selling point is their buyer protection. UTRUST will offer this as part of their platform, supported by a trust system for merchants. Payments will be held in escrow for a variable amount of time (up to 21 days) before they are released to the merchant. Over time and a history of successful trades, the trust-rating of the merchant will increase and the time the funds will be held in escrow will decrease to near instantaneously.
Offering solutions not only for the e-commerce sector, but also peer-to-peer payments between friends and family, it is easy to see why it is often called the “PayPal of cryptocurrencies”.
Moreover, UTRUST also plans on being a crypto-to-fiat gateway. Through the platform users will be able to transfer crypto into their UTRUST wallets in any of the supported currencies to convert it to fiat before withdrawing into their local bank accounts. While this may not sound like a big deal, it is indeed a major factor in the evaluation since this will be among the first companies — regulated in Switzerland — that is allowed to do just that, making it future proof and very valuable. Swiss banks support both, SWIFT and SEPA, which means bank transfers should be available worldwide.
And finally — without being the intention of UTRUST — they are helping to bring an utopian dream for many people in the cryptocurrency space to life. A multi-wallet — supporting a variety of cryptocurrencies — all in one platform, ultimately available on desktop and mobile. 🎉
Team
Impression
Many investors believe that one does not fund an idea, but the team behind it. In the case of UTRUST, you are investing into 15 engineers, a variety of talented product designers, very experienced executives and an armada of advisors. One of the biggest teams seen for any project in the space.
Many members of the team originate from a Portuguese web design and development company, founded in 2012, called Subvisual, an experienced venture with offices in Braga (Portugal) and Boston (USA). Featuring clients such as AT&T, Uphold, Betfair and Airtel, it becomes apparent that they are skilled individuals.
We also had the pleasure of meeting most of the engineers, designers and executives when we traveled to their offices in Braga, Portugal. They plan to move some of the members to Zug (Switzerland) in early 2018 but continue the majority of their operations in Portugal which makes financial sense.
Operations
Giving the large team that UTRUST houses, it would be beyond the scope of this report to list every member. We will therefore focus on some of the more public facing figures.
- Nuno Correia (CEO)
An early cryptocurrency investor and successful entrepreneur. We had a few opportunities to talk to him personally where he made a trustworthy and professional impression. He is truly passionate about the cryptocurrency space as a whole and enjoys taking part in transformative projects such as UTRUST that have the chance of making a fundamental impact in the industry. - Filipe Castro (CIO)
An MBA with an MSEng and love for disruptive technologies. A friendly person that clearly sees the bigger picture and focusses on it. In our talks with him he is exceptionally knowledgable about the entire platform and pushes towards doing things the right way. - Artur Goulão (CTO)
Former CTO in a leading digital payment platform company and current head of Development of a Swiss-based Cybersecurity company. Also in the past he was the leading force in the development of an online payment provided (Easypay). - Roberto Machado (CPO)
Founder and Product Manager at several startups prior to UTRUST. Has deep technical knowledge and vast experience in scaling products to millions of users. When we talked to him he was always very responsive and made a friendly, professional impression. - João Ferreira (Head of Design)
Lead Designer at Subvisual with over 5 years of experience. Very skilled individual that has created a professional looking brand and UI/UX concepts for the platform. In chats with us he has been responsive and friendly.
Advisors
- João Gil Figueira (Legal Advisor)
International lawyer with extensive experience in international taxation and legal aspects of cross-border investment in several industries including cryptocurrency. Has extensive applicable knowledge and is said to have had significant impact on the legal framework to make it sound. - Sydney Lai (Advisor)
Cryptocurrency investor with a background in technology banking at Wells Fargo and Credit Suisse. When talking to her it was obvious that she has a very sharp mind and knows her trade extraordinarily well. She is also a TEDx speaker and loves emerging technologies and entrepreneurship. - Francisco Maia (Advisor, Distributed Systems)
Co-Founder and CEO of SafeCloud Technologies, a Swiss venture focused on privacy-preserving software solutions. Researcher at INESC TEC with focus on distributed systems, large scale data storage, distributed coordination and privacy-preserving technology. He has participated in several European projects in collaboration with both industrial and academic partners from all over the world. - João Paulo (Advisor , Cloud Computing)
Co-Founder of SafeCloud Technologies based in Switzerland and researcher at INESC TEC. He is one of the world leading researchers on storage deduplication and benchmarking. He has also worked on software defined storage for Cloud Computing and has contributed to several European projects namely in the development of secure database and storage solutions. - Francisco Cruz (Advisor, Architecture)
Researcher at INESC TEC and Co-Founder of SafeCloud Technologies based in Switzerland. His work has been focused on distributed databases and Big Data. He has extensively contributed to the community with work on autonomous reconfiguration and elasticity systems for Cloud Computing.
Partners
- Soma
A partnership with another cryptocurrency project was forged before the ICO launched. Soma is a decentralized, social market place that will — if successfully funded — implement the UTRUST payment gateway to enable their users to buy and sell products on their platform.
Technology
Token
UTRUST provides an ERC-20 utility token. Benefits for investors lies primarily in two mechanisms in place to incentivize not only holding, but actually using the token.
Fee-less payments
UTRUST payments occur a fee of 1% which is charged to the merchant. By utilizing the token to pay, this fee is waived. The use of the token is therefore incentivized since it will effectively reduce the final price by 1%.
Burning of tokens
The main incentive to buy and hold tokens however is the burning mechanism. Over time, UTRUST plans to burn a total of 90% of all tokens in circulation, taking them out of circulation permanently, thus theoretically increase the initial value 10-fold.
UTRUST charges a fee of 1% on every payment. Up to 20% of this fee (so up to 0.2% of every payment made with non-UTRUST tokens) is being used to buy back tokens from partnering exchanges at market-rate and send them to an address that nobody owns, making them virtually untouchable, even for UTRUST.
This mechanism is limited to up to 50 million tokens every year and stops when only 100 million tokens are left in circulation. Note that UTRUST says “up to”, so the amount burnt is not guaranteed. Nuno (CEO) clarified this by stating that the amount will be adjusted based on the total UTRUST transactions made, to burn an average of up to 50 million throughout every year.
Distribution
At the point of writing this, UTRUST still stands to raise up to $49 million during their ICO on 02 November 2017. The report will be updated accordingly once the ICO finished.
UTRUST is distributing their utility token in an ICO over several stages, with a total of 85% being sold, 5% being reserved for bounty programs and marketing and 10% being reserved for UTRUST themselves, diluted over 5 years. A total of up to 1 billion tokens will be supplied.
The sale is structured as follows:
- 10% were sold to private investors at $0.02 per token.
- 5% were sold to investors taking part in their pre-sale at $0.03 per token.
- 70% will be sold to investor taking part on their ICO at $0.052 — $0.065 per token, dependent on if they are eligible for an “Early Supporter Reward” or not.
As it currently stands, the ICO will start on 02 November 2017 at 2 PM UTC and last a maximum of 7 days, or until sold out. An “Early Supporter Reward” is given to investors registered before the 20th of September and entitles them to an investment of up to $10,000 worth of tokens at a price of $0.052. It effectively reduced the price by 20%. This was well received by the community — particularly due to the limit of $10,000 — rendering it uninteresting for investors looking to “flip” the coin once it arrives on exchanges.
It is noteworthy that UTRUST is not using a smart contract to conduct their ICO, arguing that a single address would add an additional layer of vulnerability (see CoinDash and Enigma). Instead, they are providing private wallets for every participant which also allows them to accept Bitcoin for an Ethereum-based token. While potentially harder to attack, this requires investors to trust UTRUST to report the correct numbers and to not raise more funds than they intend, and to refund their investors in case the ICO sales out. Moreover, the tokens will need to be withdrawn manually to an ERC-20 address such as MyEtherWallet.
Finally, UTRUST recently announced that they are compliant with the Swiss Financial Market Supervisory Authority (FINMA) which requires them to implement KYC to counter money laundering. Investors will be able to participate in the ICO even while not verified, but will need to complete and pass verification which requires a proof of identity and proof and residence before withdrawing the tokens. It has yet to be confirmed what happens to users not being able to pass their KYC.
Development
As mentioned, the UTRUST utility token (UTK) will be based on the Ethereum platform. It will be completely decentralized with no central authority having control over the supplied tokens.
For the more tech-savvy readers: UTRUST is being built with Elixir (Phoenix) on the backend, React on the frontend and a highly optimized PostgreSQL-setup driving the database. All of this is very progressive and purely performance-driven.
We had the chance to talk to Roberto Machado (CPO) and he did put an emphasis on UTRUST being a very modular and extensible platform, as it will serve millions of users and a variety of different businesses that may require different solutions.
Competitor Analysis
Value Proposition
UTRUST provides a unique selling proposition in the sense of creating a secure way of making cryptocurrencies actually useful for the e-commerce sector. While payments to friends and family do not necessarily require a buyer protection, payments to merchants absolutely do. Current solutions offer nothing like it and if you paid for something with for example, Bitcoin, you had no chance to get your funds back.
In a nutshell, UTRUST shines at:
- Giving potential buyers with cryptocurrencies actual purchasing power without converting their funds into fiat, which is costly and time-consuming.
- Protecting buyers from fraudulent sellers through buyer protection for physical and digital goods alike, while PayPal is limited to physical goods only.
- Protecting sellers from fraudulent activities that can lead to costly chargebacks and legal inquiries.
- Protecting buyers and sellers from volatility by converting cryptocurrency to fiat immediately through partner exchanges.
- Providing a secure way of converting cryptocurrency funds into fiat and withdrawing them to bank accounts around the world.
Competitors
It is hard to find a direct competitor for UTRUST as — at the time of writing this — there is no other project that focusses on buyer protection. We analyzed three of them that come closest to what this project is trying to achieve.
OmiseGo
The most likely competitor of UTRUST as a whole, OmiseGo is one of the steepest risers of 2017. Likely to be known to many CoinTrackr Insider readers already.
With advisors that include Vitalik Buterin (Founder of Ethereum), Dr. Gavin Wood (Co-Founder of Ethereum), Vlad Zamfir (Ethereum Foundation) and Joseph Poon (creator of the Lightning Network and Plasma) among others, it becomes clear that we have a very strong team here.
Differences
- The project is backed by a larger company, Omise, that was founded in 2013 and already has a viable and active business with over 130 employees in Thailand, Japan, Singapore & Indonesia.
- OmiseGo’s exchange will be an in-house solution, while UTRUST will partner up with exchanges.
- Strategic partners include McDonald’s and ALIPAY.
- Pays its owners in fees when they choose to stake their tokens.
- Was recently speculated to be traded around $700 long-term by a private analysis service.
Monetha
Having recently raised $37 millions in only 18 minutes, the media attention towards Monetha was enormous. Still the most commonly compared company to UTRUST, it has fundamentally different concepts and goals.
Monetha is part of the Ethereum token economy (MTH). Their team includes Eric Duprat, previously General Manager for Mobile at PayPal. It is unclear where Monetha stands in regards to their legal and regulatory framework, as the ICO was conducted without requiring KYC.
Differences
- Does not accept any non-Ethereum based payments.
- Does not offer buyer protection via escrow. Instead, Monetha has something they call a contingency fund that collects 1% of all revenue it generates to refund buyers on a case-by-case basis.
- They did not require KYC and therefore are unlikely to be compliant with FINMA in Switzerland, where they are legally operating.
Request.Network
Finally, Request Network. Also frequently compared to UTRUST it is a very different idea, with only the payments itself overlapping. A very interesting project as a whole, as it builds on the existing protocols Civic, 0x and Aragon.
In its simplest form, Request Network allows its users to create invoices and send them to their recipients, similarly to PayPal. These can potentially be paid in any cryptocurrency or fiat (through oracles).
Request Network as a whole provides a compelling business case for a future that is likely to disrupt the payment industry using blockchain technology. Backed by YCombinator, it is definitely worth a second look but hardly a direct competitor of UTRUST.
Differences
- Request Network does not provide buyer protection, per se, but is instead trying to prevent fraud by scoring bad users (e.g. merchants or users) in the first place.
- The platform aims to eventually be globally compliant with local laws and be able to settle complex cases such as taxes.
- It is mostly decentralized (except for fiat conversion through oracles) with no central authority.
Our Verdict
We are overall bullish on the UTRUST platform. With a global market cap at the time of writing this article of nearly $170 billion there are many potential buyers unable to make meaningful purchases right now. Around $66 billion of those are token-based on networks such as Ethereum or Waves.
Locking out non-Ethereum based currencies results in a severe loss of potential purchasing power by holders of currencies such as Bitcoin, Litecoin or Monero. We also appreciate the compliance with Swiss regulation and requiring KYC.
Decentralization is a very attractive buzzword right now, but expecting everything to work without a central authority right now is unviable. UTRUST is creating a platform with themselves in the center as an authoritative figure. This allows them to accept every cryptocurrency — even non-Ethereum based ones — and make use of the full potential purchasing power of the cryptocurrency world.
The team’s experience is vast within development, design and marketing. Nuno — the CEO — is very hands-on and appears to be a natural networker. The engineers and designers we had the pleasure meeting were professional, responsive and sharp-minded.
Hacked.com recently reviewed UTRUST and gave this project a 7/10, deducting points only for not having an MVP ready and a lack of information on how the mediation service will eventually work.
The buyer protecting is what sets UTRUST apart. For buyers, this will make cryptocurrencies more trustworthy and viable in day-to-day use. Sending funds to family and friends will also be easier and cheaper than ever, potentially rendering services such as Western Union obsolete.
For merchants, the very low fees of just 1% and implied benefits of accepting cryptocurrencies should be incentive enough. UTRUST assured us regardless that they have a strong marketing strategy in place to onboard as many merchants as possible once the platform is ready. There is also going to be a selective Early Adopter Program for companies that are keen to start accepting cryptocurrencies.
With the general sentiment towards PayPal being rather negative on both sides — driven by high fees and frustrating support queries — UTRUST provides an excellent opportunity to invest into a blockchain-driven online payments revolution.
Scores
- Idea: 10/10
- Team: 9/10
- Tangibility: 4/10
- Marketing: 8/10
- Branding: 7/10
- Community: 10/10
We are deducting points for an apparent lack of an experienced Ethereum Advisor and / or Engineer. We also deduct significant points for not having a prototype ready publicly and for having really persistent marketing, including on Instagram and Facebook.
Their community is one of the biggest we have seen though, which is a great indicator and gives merchants an idea of the potential purchasing power they could open up. Finally, the branding seems solid but not as polished as it could be.
We are therefore giving UTRUST a 8.0/10.
Official Video
Sources
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency. The author of this report is a blockchain consultant working with a variety of companies, including UTRUST.
