ICO Review — Aergo (AERGO)

Lennard Neo

Published in

Astronaut Capital

7 min readJul 21, 2018

On the 21st of July 2018, Picolo Research released an ICO review report on Aergo. View the full report here.

A 4th Generation Blockchain with Enterprise Grade Capabilities

Aergo is seeking to create an enterprise-grade 4th generation blockchain allowing users to deploy their dApps on blockchain easily. The project is positioning themselves as the bridge between private and public blockchains for enterprises, utilising an existing platform model, Coinstack. Overall, Aergo promises a revolutionary concept and an open source project.

Company overview

Aergo is incorporated in Hong Kong with an aim to empower companies with the ability to deploy their business needs on blockchain. The team is developing a modern ecosystem supported by a distributed cloud architecture based on a core underlying technology. Coinstack, as a proven enterprise product, has over 25m users and is developed by Blocko Inc., whose clients include Samsung, Amazon, Microsoft and IBM. Aergo platform will tackle several challenges faced by enterprises in adopting blockchain technology, which includes lack of security, integration difficulties, limited technical knowledge on new programming frameworks, privacy, scalability and interoperability constraints.

Token Sale

AERGO is the utility token powering the platform. A total of 500m AERGO tokens will be issued. 30% of the tokens will be sold to investors.

Commercial & Technical Strategy

Aergo will serve as a bridge between public and private blockchains, creating a hybrid product using state-of-the-art technology. The product boasts a diverse architecture that is supported by high performance, secure and easy to use public blockchain with an efficient virtual machine engine. Aergo complete framework will consist of 3 core elements.

Aergo Chain — The public blockchain protocol that is deployed using a DPOS model that is compatible with a variety of smart contract infrastructures, including Ethereum Virtual Machine (EVM) to achieve interoperability. It also features AergoSQL that uses a traditional programming language, SQL technology, for mass adoption.
Aergo Hub — The interface that connects dApps to the Aergo Chain. These dApps are housed in the hub (like a cloud service), which consists of both public and private repositories that hosts the software program codes for a project.
Aergo Marketplace — A one-stop shop for software, computing and any other related services connecting vendors to end-users

Roadmap

The roadmap presented by the team was very brief and is subjected to changes. There is currently no MVP nor GitHub code available. Here, we cite some significant technical developments:

Q3 2018 — Aergo Chain Alpha launch
Q4 2018 — Aergo Chain Testnet
Q1 2019 — Aergo mainnet launch
Q2 — Q4 2019 — Aergo Hub and Marketplace

Token Use

The main token functionalities of Aergo tokens are 3 folds:

Currency/ payment transaction — Aergo tokens circulated will be used to power the network, operating as a medium of exchange between service providers and end users.
Staking/ Mining — Users will be able to earn Aergo tokens through DPOS by locking up their tokens in the network.
Coinstack Access — Aergo tokens can be used to purchase services on Coinstack (existing platform from Blocko) before the launch of the mainnet

Use of Proceeds

The use of proceeds indicates that majority of the funds will be allocated for Research and Development (40%) and incubate the ecosystem (30%). The remaining will be split across marketing, strategic alliance, business development and miscellaneous.

Investors

Aergo has obtained investments from several strategic investors. Some of the notable investors include:

FBG Capital — FBG Capital is a digital asset management company that focuses on blockchain-based projects. Past investments include Libra Credit Network, Eximchain, Taxa, Republic Protocol, MakerDAO, Zilliqa, Ripio.

GBIC (Global Blockchain Innovative Capital) — GBIC is a multi-strategy crypto fund with offices in New York, Shanghai and Seoul. They invest in transformative blockchain, Digital Assets and Distributed ledger technology. Past investments include Thunder Token, EXIM Chain, aelf, Lending Block, IoTeX, mainframe, Icon, Airswap, Liquid, Quantstamp.

JRR Crypto — JRR is revolutionising a 100-year old investment banking standard by investing in distributed innovation projects. Past investments include Quarkchain, Binance, Merculet, DCC.

Team

The team compromise of 40+ employees, with most concurrently holding positions at Blocko. Some notable members include:

Phil Zamani (Board Member) — Current COO of Blocko with over 20 years of experience in developing open source solution businesses. Phil held several director and advisory positions previously and was involved in driving Cloud and Big Data innovation at Banco Santander, Deutsche Telekom and Novel. He holds an MBA from Warwick Business School.

Park Hunyoung (Board Member) — Current CTO of Blocko with over 13 years of experience in database and distributed system developments. Park is the project leader for developing Coinstack and was previously a software engineer with TmaxData and Tibero. He holds a master’s degree in computer science from KAIST.

Roderik van der Graaf (Board Member) — An advisor to Blocko with over 20 years of experience in investment and advisory. He is currently the managing partner of Lemniscap, a firm specialising in early-stage blockchain investments. Roderik has worked in companies such as Caldera Pacific, KCP capital, Bear Stearns, and Rabobank. He holds a master’s degree in information technology from the University of London.

Kyung Tae Lee (Senior software developer) — Has over 14 years of experience, specialising in graph database and query engine development. Past experiences include principal researcher at both TmaxData and Bitnine. He graduated with a master’s degree in computer and information science from Kangwon National University.

Sung-Jae Woo (Developer) — Has over 11 years of experience and was a former RDBMS developer. He is proficient in several programming languages including C, Go, Perl, Bash, Fortran, C++ and Java. He holds a PhD in Physics from Korea University.

Yun Woo Park (Developer) — Park has over 10 years of experience in distributed management system and database R&D principal. He has spent the last 2 years researching on improving blockchain performance and has previously worked at TmaxSoft, Bitweb and LG. He holds a double degree in computer science and Physics from Korea University.

Advisors

There are currently 8 advisors for Aergo. Some notable advisors include:

Eddie Alleyn (Advisor) — 35 years @ Ministry of Defense for the UK government, Executive and Non-executive director at several tech startups in cybersecurity, Advisor @ SANS Institute

Dr Riad Hartani (Advisor) — PhD in Artificial Intelligence, Co-founder @ Xona Partners, iValley.co

Vincent Zhou (Advisor) — Founder @ FBG Capital

Strengths

Aergo is backed by Blocko, who has built a proven blockchain enterprise product with over 25m users worldwide
Potential network adoption by leveraging Blocko’s clientele base
The team has both relevant commercial and technical experience to achieve project milestones
A well-blended enterprise suite of solutions that bridges the gap for businesses utilising blockchain

Weaknesses

Employing DPOS might pose a higher risk of organised attacks and the threat of becoming centralised
No MVP or GitHub available
Roadmap provides limited visibility on technical and business developments of the project

Opportunities

Function-As-A-Service (FAAS) Market — The past couple of years have seen an increasing demand of users adopting FAAS. This “Serverless model” has helped companies to achieve higher business efficiency by reducing IT operational costs substantially. It is forecasted that the FAAS market will grow from $3bn in 2018 to over $8bn in 2025.
A flexible enterprise solution between private and public chains — There has been a massive growth of private and public blockchains in the market, however, limited enterprise solution suite offerings exist for blockchain adoption. Even though several known tech companies have stepped into this sector, none provides a value proposition that bridges the gap between public and private chains. Therefore, the opportunity exists for early movers in this area.

Threats

Competition in this sector is increasing with Oracle recently launching its blockchain cloud service platform. Other established tech companies such as Microsoft, IBM and Amazon might follow suit.
Employees holding dual positions in both Aergo and Blocko could impede the development progress of the project.

Conclusion

In conclusion, Picolo Research presents a ‘Speculative Buy’ rating on Aergo. The project offers a unique enterprise solution that is needed for companies to adopt blockchain technology. Furthermore, Aergo has a team ready in place (having established Coinstack previously) with a mix of experiences capable of fulfilling the project milestones.

Overall, for the reasons listed, Picolo affirms its rating on Aergo:

Aergo’s leverage on Blocko’s experience and client network enhances the project’s success
Potential opportunities in a growing FAAS market and various use cases across multiple industries
One of the early movers offering an enterprise solution on both public and private blockchains.

Not withstanding the above, Picolo acknowledges that Aergo will be entering a competitive space surrounded by major tech companies. In addition, not having an MVP or Github increases the investment risk of a project. Lastly, information with regards to token sale has been limited to our knowledge but Picolo analysts will continue to monitor any developments and update the rating accordingly should the token metrics deviate significantly against our current assessment.

In light of the preceding, we recommend a ‘Speculative Buy’ rating on Aergo for investors seeking both short and long-term exposure.

End.

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