Token Review: Nucleus Vision (nCash) is it worth the hype?
Now that the crypto bubble has finally burst and the hype has died down a little, we survivors ask ourselves: how can we bring some actual substance into the space? How can we pair tokens with real life value and give them utility ? When it comes to answering these questions, one of the projects worth talking about is Nucleus Vision (nCash).
NUCLEUS’ goal is to connect brick and mortar businesses closer with their customers, through IOT sensor Technology & Tokens. Upon entering a store, Nucleus sensors register the customers phone and prompts them to share their information with the store in reward for Tokens. The Nucleus tokens can then be exchanged for discounts within the store. The goal here is to connect what is currently offline, that is walk in customers in traditional brick and mortar stores. In spite of booming e-commerce , offline retail still makes up for a majority commercial transactions. By connecting the crypto economy with brick and mortar businesses, tokens getting a real utility which is certainly the next step in crypto adoption.
This review will give you a good understanding of Nucleus, and helps you to judge whether or not it is worthwhile. We will examine the Team, Product, Technology and how Nucleus treats you as a potential Investor.
🤼 1. Team
1.1 Track Record
Nucleus is led by Abhishek Pitti who started his career in retail by working at his parents plumbing shop, where he experienced the struggle of not knowing what the customer wants first hand . His obsession with start-ups began later in life, when he pitched his idea how to improve customer-stores at a startup accelerator program in Silicon Valley. As he felt the thrill of bringing his own ideas to life, he decided to drop out of Harvard Business School to realize his vision.
Prior to his engagement with Nucleus, Abhishek also worked as an aerospace engineer and in an investment firm. It is always good to start something based on a problem one has experienced himself, so this is certainly a good starting point for any CEO/founder.
We also have Martin Dudley as CMO who served as VP of certain retailers. Martin brings in valuable retail experience to the Team. Avinash Pitti joins as CTO, he has a experience as an SAP Developer. Avinash also worked as a consultant for customers like Philips and BP.
Brooks Atwood is hired as Chief Design Officer, he is a TED speaker and also knows how to chop wood
Blockchain experience is brought in by Brian Lemster who runs a mobile development company according the link on his profile.
According to Nucleus, their whole team consists of 40 people, including 1 IOT platform engineer. Since Nucleus’ core product are IOT sensors, it makes me wonder why there is only one IOT engineer ?
1.2 Advisors
As you will see in the product part, Nucleus’ sensors depend on radio frequencies governed by the telco industry to properly function. That is why Arun Seth — former British Telecom CEO — is surely a good pick for the advisory board. The same accounts for Ian Balina, a well known YouTube crypto expert, who fills the role as community advisor. We also have the co-founder of ICON, a blockchain PR consultancy and various others. Overall, a good mixture of people with the right kind of experience.
1.3 Investors
Tim Draper is heavily advertised as the Star Investor backing the project. Draper is an early investor in Skype, Tesla and Baidu. Draper is also well known as a huge crypto advocate. My problem is the fact that I can’t find any actual proof/statement from him regarding his investment in Nucleus.
✅ Experienced management team
✅ Backed by prominent investors
✅ Relevant advisory board
❌ No statement from Tim Draper
❌ Only one IOT person
🏆 Team Score: 24/40
Questions for Nucleus Vision:
Why is there only one IOT engineer on your team ?
Can you give us a proof that Tim Draper invested in your company ?
🚀 2. Product
2.1 Value Proposition and USP
The idea behind Nucleus is to gather data which is not currently available. That is customers walking into physical stores. The goal is to increase the conversion rate for stores, by giving them intel about their customers. If the store knows my preference before I am entering, my shopping experience can be personalized, therefore I will buy more stuff. The customers will be rewarded for sharing their data and the store increases its conversion rates. To ensure data privacy, the customer owns his data and only gives it to the brands he trusts.
The basis of Nucleus’ product is its patent pending sensor technology called ION which detects customers smartphones via radio frequencies. Customers will have a wallet on their phone that holds their personal data which is requested when they are in range of the ION sensors.
Nucleus claims that their prototype is running at 10 stores already, and that they have signed deals with brands to install it within 14.000 locations.
The actual progress is shown in a detailed roadmap and so far the goals have been achieved, even though they are still behind their Q1 goal as of today. What I am missing is some actual material from the stores. Show me something about your prototype, some customer testimonials, photos of the sensors or the authentication process. I get that it is in Beta, however there should be some material that they can show off here.
One thing that is questionable, is the sign up process. The customer has to register and authenticate with every individual store. Since stores can share the gathered data with other locations, the user has to confirm this every time. The problem I see is that this is quite inconvenient and requires a lot of maintenance from the customers.
2.2 Competition and Market
Despite e-commerce, offline retail still makes up for a majority of the market. There is some huge untapped potential not only to disrupt the retail industry, but also to drive adoption for cryptocurrencies by coupling the tokens with real world goods (as you could use nCash to pay at stores). There is quite some competition in the market. Read my Momentum Token review if you want to learn about one of their competitors:
2.3 Traction & Community
Nucleus ran one of the biggest bounty campaigns in crypto history by giving out 100 million in nCash tokens worth $ 1M for the bounty hunt alone. No wonder a massive community has formed around nCash with 90k members in the Telegram group and 60k on Reddit. I found the overall sentiment to be positive, however there are quite some complaints about a lack of transparency and proof of their claims.
2.4 Bullshit Bingo
I found the explanations on the website + whitepaper to be reasonable and clearly laid out.
✅ Working prototype at 10 locations
✅ Roadmap has been delivered
✅ Good market potential
❌ Missing testimonials
❌ Questionable convenience for consumers
🏆 Product Score: 12/20
Questions for Nucleus Vision:
Can you show us some material from within the pilot sores ?
⚙️ 3. Technology
3.1 Technical Solution
The identification process works through ION sensors who pick up the customers IMEI (International Mobile Equipment Identity) over telecom providers radio frequencies, so there is no bluetooth or wifi required. The IMEI is stored on every smartphone and is independent from the SIM card.
Fun Fact You can see your IMEI by dialing *#06# on your phone.
The last four digits of the IMEI are then mapped with the customers mobile number to create a unique identification. One potential problem with this approach could be the fact that according to a BBC article as much as 10% of IMEI’s are not unique. Also, Nucleus needs to comply with Telco provider regulations which differ from country to country.
Once registered, the Nucleus backend maps the ID with customized recommendations for the consumer, for example a discount on a preferred product. Machine learning procedures will be applied to generate recommendations.
The nCash token will live on the Ethereum blockchain besides the users sharing preferences. So if a store wants to read the customers data, a request has to be made via the blockchain. All user data is stored on the phone itself which also serves as a computational node in the network. One concern is how much computation needs to be done on the node concerning battery life and data plans?
3.2 Blockchain Use Case
As we already discussed in our Momentum Token review, the use case for blockchain is twofold:
- Privacy: Instead of storing profiles on a central authority, it will live on the customers smartphone. The access rights will be stored on the blockchain, so the customer will have full control over his data.
- Versatility: Using tokens as currency in a rewards program makes sense due to its universal nature. The current landscape is fragmented into various disconnected programs. With tokens we can use our flying miles to buy a Starbucks coffee and vice versa.
3.3 Hands on
Nucleus published their Token Sale contract on Github, which implements the ERC20 token standard.
The three other repos are not updated and seem irrelevant to the product. There is some Python demo code, IP forwarding and of course the machine learning repo which is copied from some tutorial. If the code is not relevant to the project why is it even there? Is it to impress non technical people?
There is no Demo or testable product of any kind available.
✅ Patent pending technology
✅ Four years of development on sensor technology
✅ Good explanation of technical functions
✅ Strong blockchain usecase
❌ GitHub repo contains irrelevant and unmaintained code
🏆 Technology Score: 16/20
💰️ 4. Investor Information
4.1 Token Sale Information
Nucleus cancelled their public sale due to reaching their hard cap ($40 M) during the private sale. This caused some criticism amongst the community. It seems that there is a trend towards projects reaching their hard cap already in the private sale. nCash is available on public exchanges since February 26th with a current market cap of $ 116M.
4.2 Usage of Funds
The Usage of Funds is layed out in detail and also properly linked to the roadmap till 2022. The biggest spending goes towards IOT infrastructure & Development which makes sense for an IOT product, coupled wit IT spending 41% of funds are spend on Technology.
4.3 Business Model
There is no information about how Nucleus will make money and what revenue they project.
We can only guess it could be a mixture of selling the sensors and tokens. One thing that makes me wonder is how the token will retain its value if it’s given away to customers for free ?
4.4 Vesting
Nucleus sets a vesting period for 2 years for team and advisor tokens. 25% of token supply goes to the team. Concerning the hard cap of $ 40M, that means 10 million worth of tokens goes to the team. For a team with 40 members this means that $ 125.000 on average per year is paid out for each team member.
I was able to verify this by checking the smart contract on Etherscan which implements a vesting function that locks the payout of tokens for 2 years.
✅ Properly laid out budget plan
✅ Vesting encoded in smart contract
❌ Short vesting period
❌ Business model not clear
❌ Team holds > 50% of tokens
🏆 Investor Score: 8/20
Questions for Nucleus Vision:
How will nCash retain its value if it’s given away to customers for free ?
⚗️ Conclusion
Nucleus Vision is surely a hard case to judge. At first glance I am impressed by the nice presentation and the detailed explanation in their 72 pages long whitepaper. Nucleus exists since 2014 and is based on a research project at Harvard University, backed by star investor Tim Draper who is best known for his early investment in Skype. So all seems nice and shiny in Nucleus land, or does it?
The deeper I looked into Nucleus’ material and community, the more questions arose. The company is registered on the Cayman Islands, but where is the actual team located ? They state to “scale across India” in q3, so is that where they operate from ? I also couldn’t find any statement from Tim Draper about Nucleus. How is the coin going to retain its value, if customers get free tokens upon entering a store? How much profit will they make on selling the sensors? The pilot is running in 10 stores already, so there has to be some genuine customer testimonials. I get it if they are a stealth startup, but when raising money from the public, they need to communicate progress. Show us some real stuff besides the marketing material. The promise sounds good, but from an investors perspective, there are many questions left unanswered.
We conducted this review according to our guideline defined in our Ultimate Guide to review ICOs
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