UTrust — ICO Review
Token: UTK
ICO: Start on November 2nd / end: November 9th
Project website: https://utrust.io
“We believe crypto-currencies are evolving to become much more than speculation and are here to stay in the minds and wallets of consumers (…) the only missing link is a platform of mediation and trust”. uTrust whitepaper
TOTAL 14/ 25
Summary:
Making crypto payments mainstream is an ambitious task to handle at this stage, but why not? Yet we would probably bet on an existing solution (like Paypal) that managed to create a huge network and has the technical skills to implement such a product. Our main concern for uTrust is that we do not see any clear need for a token to back such a platform (see section on token specifics below). On the tech side, nothing disruptive nor crypto-centric has been built based on their whitepaper and roadmap. uTrust will act as an intermediary between buyers and sellers, converting crypto-currencies to fiat on fly, and eventually as a mediator if conflicts arise. To our opinion, a nice team, a well-marketed product addressing a real need — for crypto holders — are not enough (especially when you start from scratch). Token economics first for an ICO candidate we would say. Here we hardly buy the proof of concept.
1 Business opportunity: 3.5/5
Description:
Swiss Blockchain-based digital payments platform that enables buyers to use crypto-currencies as a means of payment when purchasing goods and services online, while sellers are paid in fiat currency, supported by a payment-protection system.
Ambition is to provide the growing audience of crypto-holders with a fast service operating at lower fees than existing solutions, supporting frictionless transactions with efficient disputes resolution. Sellers on their side would be able to hedge crypto-currencies volatility risks.
Competition: uTrust faces the giant Paypal on the traditional online payment networks market. On the crypto-side, two main competitors are in place: Bitpay and Monetha. And several competitors are entering the payment game (Request Network for instance).
Notice that PayPal is also pushing its platform into bricks-and-mortar stores, bringring the gap between physical and digital worlds. This might be the next step for such a crypto payment network.
2Technology: 2/5
uTrust Platform will be made of:
- a transactional payment API for merchants
- a client API “Wallet Web App” where clients can check their balance and transactions history
- a payment protection system with a mediation mechanism (see below)
Use case: an online shopper is interested in buying an item on a marketplace/retailer website where uTrust payment solution is on. He has the possibility to pay with any of its crypto-currencies available in hiswallet (and supported by uTtrust platform), including uTrust tokens. Conversion from the crypto-currency chosen to fiat amount displayed by the seller is subject to a 1% commission and exchange conversion fees (except for uTrust tokens). Funds are hold in escrow for a duration that varies depending on the merchant performance history (up to several days for newcomers). Two possibilities here:
- No issue reported and the seller receive the money or,
- A dispute is opened and a self-resolution chat is set with the two parties. If they do not manage to solve the issue within 7 days then the buyer can escalate the claim to a uTrust operator (mediator) and a 2% fee over the amount in hold is applied in case of a buyer refund (which are issued in uTrust tokens).
uTrust token: ERC-20 compliant, uTrust tokens can be used as a means of payment in any transaction which is therefore not subject to conversion fees. On the other side, sellers are charged with a flat 1% fee on received payments.
Besides, uTrust tokens are subject to a “burning” mechanism with the objective of progressively reducing the token’s supply base and thereby increasing its value…
We have some concerns regarding uTrust tokens’ attributes. Behind the two token functionalities displayed before, incentives do not seem aligned. On one hand, you find an interest in buying goods or services with the token you have invested in (but not obliged to) while on the other hand you are supposed to wait peacefully for the token value to increase. If value of uTrust token, as said, mechanically increases over time (depending on platform adoption rate, volume of transactions and % of tokens burnt), it supposes that demand remains at least constant. But after tokens are distributed, what is the real interest in acquiring uTrust tokens as one could simply use any other currency? Then the question is: “to what extent buyers are willing to avoid paying fees?” So economics behind this token are not clear to us.
This so called “intrinsic deflationary” mechanism could be linked to share buyback programs of listed companies. The difference here, is that there is no dividends distribution or “earnings per token” as it is the case with stocks which mechanically appreciated after a buyback program when stocks supply is reduced.
Technically speaking regarding the fee burn rate,
“The amount of UTRUST tokens is projected to be reduced from the initial 1 billion to a minimum cap of 100 million, at a rate no faster than 50 million a year. This dynamic adjustment of the fee burn rate will be managed by the UTRUST platform analytics engine with the goal of balancing token supply and demand while encouraging transaction growth.”
More detailed information would have been necessary on how the “uTrust platform analytics engine” will operate. In this respect, uTrust token has an ambiguous role with no clear intrinsic use value as far as weunderstand the related section in the whitepaper.
Overall, the project does not much contain technical assets and success will highly depend on the team’s ability to sign contracts with merchants and generate customer adoption with strong marketing presence.
3Team: 2.5/5
Sounds good overall; quite a big team (c. 15 people) with diverse profiles and 5 software engineers. Team and top management have some interesting experiences but still nothing strongly tied to crypto world.
On the partners/advisors side, same observation. Experienced advisors but no heavyweights here as far as we know.
4ICO details: 2/5
uTrust token (Ticker: UTK)
ICO timeline: Started on November 2nd (pre-ICO round started on August 28th) / duration : 7 days max. Timing is also not “fortunate” considering recent market trends.
ICO process: first-come-first-served / tokens available within 2 weeks after closing
Hard cap: $ 49M / availability: 75% (pre-sale+ICO) + 10% private = 85%
Accepted contributions: ETH (min: 0.2) & BTC (min: 0.02)
Max. valorization: c. $ 58M
5Community & Communication: 4/5
Well marketed project (white paper, commercial videos, website) with good communication skills emphasizing on competitive advantages of uTrust solution and product/market fit.
Influence in numbers:
- Linkedin: 79
- Twitter: 6100 +
- Reddit: 179 subs.
- Fb: 8400 likes
- Youtube: 28K views on most popular video
- Medium: 285
6Verdict:
Perspective:
- Short-term: Neutral/Negative
- Long-term: Neutral/Negative
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