Hashgraph, Chromaway ICOs & Corl STO: to watch or pass?
The purpose of this blog post is not to provide a review of the projects — there are enough of those online, this post is just to share my thoughts and opinion after taking a look and researching the projects, from a investors point of view.
We’ve had an interesting couple of weeks, SEC U-turns on ETF denials, Yahoo Finance enables crypto payments and Square allows you to pay with crypto. These are good signs of supply but weak signs of demand and ultimately demand is what will drive the market back into a bull run, but when that demand comes — it will be a lot easier to buy crypto and that’s a good thing.
This week I wanted to share my thoughts on the Hashgraph and Chromaway ICOs as well as the Corl STO…here we go:
Hashgraph
The first thing I’ll note here, is that they are raising a lot of money. Around $100mln. This will put off a lot of retail investors, speculators and flippers. This is a good thing in my opinion. I think if you look at the market, especially in this bear market, the ICOs that have raised north of 100mln and locked tokens for 6 months + have held their value in this downturn — Tezos, EOS, etc and have gained some value at some point.
There’s no doubt that this project is a big undertaking and the team has the capability to do it, in my opinion. They have been working together for years, as a team and on the project. The CTO is a world class talent. For me, they are not a ‘fly by night’ project. I don’t think this project will kill blockchain but it will be something else institutions can use if blockchain is not the right fit (which is sometimes the case).
Like EOS, this technology is something different and they are trying to do something different and you can tell by how they have structured their organisation, setting up a council from different industries as governance, which many technologist won’t like, but again it’s something different. Despite the risk of ‘human corruption’, it can work. Centralised leadership still made Apple, Microsoft and Amazon great.
My biggest concern about this, however, is the seed terms…they got a huge discount on crowdsale terms. I understand why, the seed investors were practically investing blind, with no organisational plan or set up. Now, however, the mainnet is live (further than 99.9% of projects) and the organisational structure is set up. Seed investors have a much longer lock up (4 years), which is a very good sign, however they have the same initial release as crowdsale investors. This could obviously create a lot of sell pressure initially on exchanges, as that will be the only time they can liquidate for a year, however the first release is not for another 6 months, so the market could be different and support the sell pressure.
Bottom line, Hashgraph is one to watch, but because of the huge discount and release schedule of seed investors, I’m cautious of the crowdsale and will be watching on exchanges.
Chromaway
Chromaway has been in the limelight for many reasons. I don’t want to hash over the FUD that was surrounding this project as for me the fundamentals of this project remain the same — strong. The stand out quality of this project is the team, they have extensive blockchain experience. The company have already built custom blockchain solutions for companies and have been generating revenue. This shows to me that they know how to build, execute and develop business/gain adoption — this is ahead of 99.9% of projects out there.
The advisors of this project are also noteworthy; some of crypto’s most credible veterans, who have achieved success in the space already and they want to partner up with this project. It seems this project is about people who know blockchain, are from blockchain and want to further advance blockchain. I’m not one to highlight tech, but if they are able to build what they plan to build, from the looks of it, it could provide a very strong alternative to the top 15–20 projects out there.
In addition, their token economics are better than most. Early investors have received a maximum 30% discount from what has been disclosed; a much better set up than many others.
What I will say about the FUD is that there was a lot of noise about some investors getting large allocations and then reselling with a 30% margin…to me this is nothing. Some early investors of hyped up projects, were reselling large allocations with 200–300% margins and no one was blinking an eye. These were projects with no mainnet for months, sometimes close to a year, from teams with no blockchain experience, raising more money. So 30% is no problem for me.
Plus, with a $15mln raise for a project who’s mainnet will go live in October when tokens are released, to me is great value. This is a project to watch.
Corl
Corl is one of the lastest STO tokens to come from the Polymath ecosystem and looks very interesting. The team have solid experience in the field of lending, with the advisors who can give the contacts for deal flow.
My only issue is that this is a really long term play. I like the dividend aspect and business model. We own equity in a commercial loan organisation and get a share of the profit from all revenue and any liquidity events from equity warrants on investments.
There are deals in the pipeline from my conversations with the team, however for me the team have ambitious goals, which are just plans at this stage. I would like to see some high profile deals come in, as the dividend payments on their projected investment volumes is very minimal in the short term.
What makes it attractive, short term is the potential uplift in value from investing in early rounds. Latter rounds and especially at crowdsale, investing is unattractive — I’m buying in at a very unattractive 2–3x of first round.
It’s really foggy at this stage, with little information on what the near future holds for the project — so at this point very speculative. It would’ve been good if the team had achieved a bit more in the space prior to this project to give me a better idea of their ability. So for now, it’s not a pass but one to keep an eye on as the project develops. If I miss the first round, I will watch on exchanges, if they build some real traction.
CORL UPDATE 3/9/18: As this projects is as standalone business that’s not tied to the infrastructure of blockchain or tokenized securities, I’ve decided to pass as these types of projects are not within my investment thesis for now. This project may still develop and do well but it’s not for me — it’s a pass.
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Disclaimer: Any information in my blog posts are for educational purposes only and are not to be taken as financial advice. The views expressed are my opinion only and are not paid or sponsored. Please remember investing in cryptocurrencies is very risky and you can lose all your money. Please consult your own licensed financial advisor and operate within the laws of your country of residence. I may or may not have positions in the cryptocurrencies mentioned in my blog posts
