TenX Token Sale Review: “Muddy the water to make it seem deep”

Company: TenX 
Website: https://www.tenx.tech 
Year: 2015 
Country of incorporation: Singapore 
Current Total Equity Funding: $1.2M in 2 rounds from 8 investors
Blockchain competitors: Tokencard, Mobi, Xapo, WireX, Monaco 
Non-blockchain competitors: Visa, Mastercard, UnionPay, American Express 
Ticker: PAY 
Token Sale launch: 24 June 17 
Token Sale end: 07/04/2017 or earlier 
Cap: 200,000 ETH 
Whitepaper: https://www.tenx.tech/whitepaper/tenx_whitepaper.pdf 
Blog and updates: https://medium.com/tenx-wallet

TenX aims to solve a problem that most average people run into pretty quickly when they start getting involved in crypto: now that I’ve finally worked out how to buy the stuff, how do I spend it? Preferably, on basic and legal things, like a cup of coffee, and not on Silk Road. A number of cryptocurrencies are currently attempting to tackle the same problem, but (on the surface at least), TenX appears to be taking matters one step further.

TenX offers a multi-asset wallet, linked to a physical or on-phone debit card. In theory, you can use this wallet with any vendor which accepts Mastercard or Visa. The crypto assets are only converted when the user wants to buy something: they select the crypto they want to convert to fiat and then pay using the card. Simple, but there are fees: 0.5% of the transaction value is paid to PAY token holders (in the form of ETH) and users receive a 0.1% cashback in PAY. Assuming the ICO raises at least 100k ETH, TenX intends to spend part of the proceeds to develop the COMIT network, described simply and modestly as “the internet of blockchains”. Assuming proceeds exceed 150k ETH, TenX plans to apply for a fiat banking license.


  • On the surface, TenX appears to be addressing the ease-of-use problem most crypto holders are familiar with. Using a debit card is simple, while using crypto is much more difficult: this is largely cited as the primary hurdle on the path of mass-adoption. In this context, the TenX wallet is immediately appealing: very few token sales address such large problems with a seemingly obvious, yet elegant solution. To demonstrate this apparent ease-of-use, TenX claims to have tested its cards with 1000 real life users in Singapore. These people made payments for a total value of over $100K from 50 different vendors. To attract the regular guys, they even filmed a video of somebody buying something from McDonalds using the TenX wallet.
  • The TenX product has been live since the beginning of 2017 and open to user registration since June. It has been rolled out in all major countries other than the US. The wallet currently supports Bitcoin, Ethereum, ERC20 Tokens and Dash and the app is available in beta on Android (free download through the Play Store). TenX says that the iOS and web app will be available from July 2017, assuming that at least 50k ETH will be raised during the ICO. TenX claims that any user from outside the US or a “non-US sanctioned country” can sign up, all they need to do is download the app, enter their phone number and email address, and transfer crypto assets. They promise that they will support US-based users later on in 2017.
  • The product also operates in a market with a very large market opportunity. Global credit and debit card payments volumes are vast: Visa and MasterCard processed over US$10 trillion worth of transactions in 2016. Even if you make very modest assumptions about the market share of crypto-enabled payment cards, and for TenX’s market share within that segment, the numbers for TenX’s potential transaction volumes are large. This means that payments for PAY token holders look promising.


  • Yes, it’s difficult to spend crypto on everyday items, but that doesn’t mean that people would do so if it was possible. How many people actually want to keep all their money (or even a portion of their money) in crypto? If it becomes easier to spend crypto on everyday purchases, maybe it will increase — a tiny bit. But for the foreseeable future, the vast majority of people will earn fiat. We think that these people will not want to run the exchange rate risk of having their life savings in crypto. Most people buy crypto as an investment and, in this case, they will want to hold it rather than spend it. Another proportion of crypto users need it to purchase goods and services they wouldn’t want linked to their credit cards or, indeed, their identity.
  • The competitive landscape for projects attempting to tackle the same problem as TenX is fierce.There are several other projects out there aiming to link crypto wallets to conventional global payment networks: Tokencard, Mobi, Xapo, WireX and Monaco for example. Some of them have functioning products as well. Yes, TenX has a working product with relatively rich features, but technically there is nothing particularly innovative about what they are doing. There is no reason to believe that many others won’t be able to launch similar products if regulatory hurdles can be overcome and Visa and MasterCard continue to be comfortable with the concept. Also, if the product does take off, it would be really easy for big exchanges (and normal banks) to launch similar products. Compared to TenX, their marketing power, trust and existing relationships would probably allow them to crush the startups. TenX’s product has no real network effects (unlike most real game-changing innovations) eliminating any first mover advantage.
  • Being able to make payments in multiple currencies, using multiple cryptocurrencies and crypto tokens could be great. Getting gouged on conversions and other fees is maybe not so great. Like its competitors, TenX doesn’t seem to have a mechanism to help users get comfortable that they’re getting a good deal. Some fees are pretty expensive — e.g. US$2.75 for ATM withdrawls, US$15 to issue a card. Essentially the TenX token takes 0.5% of every transaction from the TenX wallet and card holder and gives it to the token holders. TenX’s users get 0.1%. At the moment, you can get away with that because the traditional payment network is an untransparent oligopoly. But if you think that crypto has a future, it is probably at least in part because you think that the traditional payment system is an anachronism and in the long term its inefficiencies and the pricing power of the incumbents should get eroded. How will TenX be able to compete if someone launches a similar product which offers that 0.5% rebate to the card holder, not the token holders? Which card would you prefer as a crypto asset holder?
  • While the relatively advanced stage of the wallet / card product is one of TenX’s strengths, the opposite could be said for TenX’s longer-term plans. TenX provides limited detail on the current status of the COMIT network or its potential benefits, other than that it will “completely change the way the business is done and how we understand today’s blockchain ecosystem” and an acknowledgement that “COMIT is a very technically complicated and time intensive project. It will take a lot of resources to establish and finalize it and it will be a long way until it is live and and operational. Likewise their plans to acquire a banking license “will allow TenX to become a major systemic hub and one of the most important financial institutions connecting blockchain assets and the fiat world” but the details didn’t make it into the white paper. These large and complex projects would require significant resources in areas where TenX has limited experience and could distract TenX from focusing on the wallet / card product. In addition, it is not clear how PAY token holders would benefit from these initiatives.
  • In most token ICOs, the potential upside to tokenholders comes from increasing demand for the token as demand for the token ecosystem’s products rise. The value of the TenX token is largely driven by the 0.5% of transactions made using TenX which is distributed to token holders. To a regulator, these might look like distributions to equity holders, creating a heightened risk that the project is subject to regulatory scrutiny. Even if this doesn’t result in sanction, the conventional finance industry is generally very risk averse, especially when it comes to interfaces with crypto, so any hint of regulatory concerns could jeopardise TenX’s relations with MasterCard and Visa, which are critical for its business model.
Less than meets the eye — while the use case initially seems compelling, and may well attract crypto tourists, the long-term value proposition is unclear. Still, the available product and good investing background of the company are there. We are going to invest about 5% of portfolio.

We would like to remind you that all opinions expressed in this piece are our own and are based on the research our team conducted independently. If you are serious about participating in an ICO, token sale or crowdsale of any kind, we strongly recommend that you conduct your own due diligence by familiarizing yourself with the projects, their background, white papers and the market(s) in which they operate. Stay safe!

Tokenguide Team

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