OriginTrail (TRACE) — Project Analysis

Project Summary

Project Overview

OriginTrail aims to take on the supply chain business with its new product. They want to create a purpose built blockchain that can specifically deal with the demands of the supply chain industry. Currently focusing on the food side of supply chain, they aim to make it easy for IT users to quickly implement a blockchain which will allow the sharing of data in multi organisation environments.

They are particularly focused on the interoperability and automatic data connections between multiple organisations on the blockchain. They are factoring in performance, cost and scalability from the start of the design of their platform to ensure ease of use for all parties involved.

Important Factors:

• Although their token is ERC20 they plan to be blockchain agnostic in the future allowing their protocol to run on any ecosystem.
• They will ensure client data integrity by implementing zk-Snarks on their blockchain to protect sensitive data.
• Interoperability will be made easy by using the globally recognised GS1 standards for supply chain data exchange.
• The data storage layer is based on decentralised graph database which will allow them flexibility, performance, scalability and cost efficiency.

Trace Token

The Trace token’s main purpose is to provide a means of compensation between supply chain data producers and data consumers and the OriginTrail node holders.

The OriginTrail system depends on nodes and the nodes will compensated with TRAC for the following tasks:

• Discover and connect functionalities
• Supply chain consensus checks
• Data quality checks
• Data replication checks
• Data storage and management
• Filtering and delivering supply chain data

Team

The team now consists of 15 core people, all with proven experience in their fields of work. In addition to the team there are 9 advisors. Here we will take a quick look at the founders:

SWOT Analysis

Strengths

• OriginTrail business has been around since 2013 and has established customers in Europe.
• Won an award from the Walmart Food Safety Collaboration Centre in Beijing.
• Ethereum test network is already up and running with real use cases.
• They formed a group called the “Trace Alliance” which will comprise of beta users of companies across the US, EU and China.
• Partnered with Yimishiji a fresh food retailer in China.
• Roadmap looks solid with deliverables scheduled in early 2018 including live cases using the protocol network.

Weaknesses

• Trace token use case is quite limited as it is only used for data producers and consumers to access the network and for the compensation of nodes.
• The platform itself is a good idea but do we need another token? Could data producers and consumers not pay with another cryptocurrency to access the service?
• If people invest in this token and hold the token as an investment, this will make the token more scarce. This could drive up the token price making it more expensive to use the network.
• Sensitive and personal data by law should be able to be erased easily. However with use of a blockchain data cannot be deleted. Would the use of zk-Snarks be enough to protect sensitive information or will the authorities demand a way to delete the data? If so this could cause regulation problems further down the line.
• Gathering a critical mass of companies to join this project will be difficult. Companies like to control their own data. The extent of the learning curve to use this technology and the amount of control companies can have will affect company adoption.

Opportunities

• A lot of consumers demand a quality product and a chance to see that the product is genuine will be a big use case for customers.
• In turn if more customers demand to know the origin of their products more companies will adopt this product to show loyalty and transparency to customers. This could add another dimension to company competition with companies competing to show customers that they are the most transparent with the best quality goods.
• OriginTrail is moving its business towards Asia. They recently completed their Yimishiji pilot project and their Hong Kong office will be open soon. This is a good move as many people in China (after many scandals) like to know that their products are safe and have not been tampered with.
• Later in 2018 OriginTrail will open an Office in the US. If they have success in the EU and China this momentum could be carried over to the US.

Threats

• There are already many supply chain based cryptocurrencies in this space with a good user base and a strong token use.
• Compared to other projects, OriginTrail aims to do much more with their protocol. This could end up giving the clients an over complicated product leading to less adoption than they would like. Competitors with a simpler product could snap up these clients.

Conclusion

In conclusion, we like the fact the OriginTrail is an established company with real uses cases and clients already on board using the system. We like the business strategy especially targeting the China market, if they can crack this then they will make very good profits. After looking at the team via Linkedin they seem to have little crypto experience and only a few years experience from previous jobs. However, they have been running this company since 2013 which shows their ambition and care for their project.

The platform idea itself is ambitious and we see a lot of opportunity for it. The token use case seems weak compared to other projects. I don’t see why the token is absolutely necessary to run this platform. If the platform is going to be “blockchain agnostic” then shouldn’t we be able to pay for service on the platform using other cryptocurrencies?

In terms of investment opportunites. Tokens mined at distribution will be 500,000,000. At a price of $0.1 per token during the sale this will give it a rough starting market capitalization of $50,000,000. By market captilisation ranking this puts it in the 250–200 area. This allows room for growth from an early investment. Looking at OriginTrail competitors by market capitalization we can see that they are in the top 150. If the Trace token was to get into the top 150 then we could potentially see the price of Trace hit $1. Therefore I think $0.1 is a fair price to get in, but I would only hold this token short to medium term. A long term hold of this token will require reassessment of the company further down the line to see if could indeed reach its milestones and gather enough business interest.

Disclaimer: This is not financial advice, please do your own research before investing into anything.