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Eon Protocol Rating Review

Risky

Investment Rating

Expiry date 01 Dec 2018 31 Aug 2018

Rating report

Based on the analysis performed and issues identified we rate the EON Network as “Risky”.

Blockchain could add value to games for gamers by suggesting new ways of monetizing personal data, and help small developers by eliminating entry and marketing fees and some difficulties in cooperation with end-users.

Via the EON platform, gamers can monetize data and receive rewards for gaming. Developers can cooperate with gamers without intermediaries and focus on development rather than on marketing.  

The project has the following strengths:

  • A well-explained product featuring a supply-and-demand model

  • Strong advisors and notable investors

  • Partnership with a relatively popular pet game

  • An active and constantly-growing community

However, the project has the following significant risks:

  • MVP is not available

  • No GitHub account or smart contract code

  • The market is full of decentralized solutions already

  • Dependence of the platform’s success on partnerships not yet established

  • The roadmap does not cover business operations

  • Fundamental factors which put pressure on the token price in the long run

General Information

EON Network is a decentralized solution for game developers and gamers that aims to provide a cheaper, quicker way to create new games and reach a new audience.

KEY FEATURES

  • Platform: Ethereum and EOS based blockchain

  • Foundation date: Q3 2017

  • Location: Palo Alto, California and Singapore

  • Restricted countries: no data

  • Website

  • Whitepaper

  • MVP: The project refers to the CryproAlpaca game as an example of MVP, but this is not directly related to the platform

  • GitHub: No profile, smart code is not disclosed

  • KYC

  • Founders: EON Foundation

  • Team: 6 core team members, including founders

  • Advisors: 3 individuals, including one investor

  • Investors: Feng Li, Cherubic Ventures and Uphonest Capital

  • Community: ~100k Telegram, ~9kTwitter,   ~4k Reddit, <100 Facebook, <100 Instagram followers

  • Telegram

  • Twitter

  • Reddit

  • Facebook

  • Instagram

  • Partners: Crypto Alpaca (as of June 21st, 2018)

 

 

ICO (public sale)

Start date

~25.07.2018

End date

no data

Token

EON

Token Distribution

630,000,000

Total Volume of Tockens

2,100,000 000

Soft Cap

10,000 ETH

Hard Cap

30,000 ETH

Token Price

0.028 USD

Exchange Rate ETH:EON

1: 21,000

Bonus Rstio

0%

The EON Foundation is a Palo Alto, California and Singapore-based blockchain games company, established in 2017 by Aron Lyu, Tao Hu and Mark Nedzelskii (co-founders of EON platform).

The vision of the foundation is to enable players to find great games easily and help developers distribute their creations more easily through the EON platform with the help of EON tokens.

On June 8th, 2018 the EON Foundation announced its first partnership and seed funding.

Crypto Alpaca, a decentralized pet-raising simulation game, launched in February 2018 by EON Foundation, started to accept EON token.

Feng Li – an early investor in Ripple and Coinbase and two VC firms - Cherubic Ventures and Uphonest Capital have invested $5 million in platform development.

A total sum of 2.1 billion (2,100,000,000) EON tokens will be issued and distributed. It is assumed a coin burn mechanism will be applied when the coin is initially issued.

Below is the scheme for token distribution:

  • Lock up period for advisors is up to 6 months, for the EON foundation 2 years.

  • From June 07, 2018 to July 26, 2018 the project is running the EON Bounty Campaign, offering 20,000 000 EON tokens, equal to $600,000. Assuming that the Hard cap is achieved, this could affect the token price to the tune of around 4%.

  • In July 2018 the project is planning to hold the EOS airdrop.

SUMMARY: General and initial technical information is available online, and the project shares some main announcements and updates with the community. But presentation is a little messy; there is no authoritative source of data, and information is scattered across different sources.

The token distribution proposal seems optimal, reflecting interest from the team (including EON Foundation members), a reward aspect and investors’/participants’ involvement in the project. The lockup period for the team exeeds the main milestone for project development.

In June 2018, the project announced its first partnership with a game, CryptoAlpaca, and seed funding from Feng Li, Cherubic Ventures and Uphonest Capital. It is expected that the list of investors and partners will be expanded with the development of the project.

The budget plan is not disclosed.  

Description of services

The EON platform is a decentralized digital game distribution platform where gamers can discover, share and play games, as well as socialise with other gamers.

The platform will be built on Ethereum. Later it is considered to add other advanced blockchain technologies, for example EOS.

Critical data such as the referral smart contract and transaction history are stored directly on the blockchain. Other metadata are stored on a centralized server off-chain from the EON platform.

The platform will support multiple cryptocurrencies (a list of accepted currencies will be disclosed later) and enable quick transfer transactions.

Ethereum smart contracts will be utilize to track traffic across the EON platform. This will help reduce fake traffic and calculate conversion rates & ROI easier.

Developers will receive payment for games after the deduction of payment system commission and taxes.

The EON SDK is briefly mentioned in the white paper, in reference to the fact that after submitting new games on the platform, developers would be helped to integrate with the EON SDK.

 

The ecosystem consists of the following aspects:

  • Game discovery system: Designed to enable discovery, purchase and playing of games based on gamers’ interests. Any user can submit new games to th platform, which should be claimed by the developer before upload, and receive rewards.

  • Game community: Designed to build communication with other gamers by submitting reviews, photos and videos for games and voting on other gamers’ activities. Each user will have a private page showing profile information, activities and achievements.

  • Referral system: Designed as a new user acquisition system.

  • Rewards will be assigned for attracting new gamers and submitting new games outside or inside the EON platform, contribution to the growth of the platform via user activity.

  • Activity will be recorded on the blockchain in the form of smart contracts auditable by anyone.

  • The referral system could be used to exchange traffic inside the EON platform.

  • Developer system: Designed for submitting and updating games, tracking statistics and configure referral smart contracts.

Cooperation between participants occurs as follows:

SUMMARY: The project provides a good description of the platform and the cooperation amongst its participants. A visualization of the application is also given, although as of June 21st, 2018 there is no demo version of the product.

Roadmap

The roadmap describes main milestones for the platform, including the involvement of the EON foundation.  

SUMMARY: The roadmap looks quite realistic in terms of platform development; one of the two milestones for Q2-Q3 2018 is already achieved. But it should be noted that development for the project with respect to the team, token economy and public sale is not mentioned.

Market review

Recent data for 2017 show that the gaming industry generated $116.0 billion in revenue and will continue to grow.

Mobile games remain the largest segment, generating $50.4 billion, followed by PC games at $32.3 billion and consoles at $33.3billion.

Asia remains the biggest market for mobile gaming, generating $36 billion in 2017. In contrast, North America and Europe generated $9.1 billion and $5.9 billion respectively in 2017.

Evolution for the gaming industry requires new technological solutions and democratization of the market, which at the moment can be described as centralized, loosely regulated and highly profitable.

There are several issues within Gaming industry:

  • fees for centralized distribution platforms (Steam, Apple, Google, Origin etc.) for developers; as a result of individuals having to pay these fees big companies could cover the whole market with their advertising, while small development companies go bankrupt due to a lack of players for their games.

  • difficulties for small developers in acquiring target users; as a result, more efforts are spent on marketing campaigns then on development of good quality content.

  • lack of control over accounts for players; user don’t really own accounts, characters or purchased items unless the game supports some sort of P2P trading.

Using blockchain would enable developers to spend more time on development and solve issues of ownership of game assets within a digital wallet.

There are plenty of blockchain solutions involving gaming cryptocurrencies.

Below is a comparison of EON with several other projects.

 

Project

CryptoKitties

Enjin Coin

Game.com

IONOMY

EON Network

Type

Game

Gaming Network & Smart Cryptocurrency for Gaming

Gaming platform for blockchain digital currencies

Decetralized platform

Decetralized platform

Application

Desktop

Web & Smartphone

Web & Smartphone

Web & Smartphone wallter and Smartphone game

Web & Smartphone

Release

December 2017

Q1 2018 - wallet release

 

 

Q1 & Q3 2019 - SDK release

Funding / Hard cap

$12 million USD, no ICO / 50 000 ETH

~$23 million USD, ICO / 100 000 ETH

$ 5 559k, ICO in November 2017 / 100 000 ETH

$ 500k during ICO in Aptil 2016 and $125k during initial funding in November 2015 / -

$5 million USD, seed funding as of June 2018 / 30 000 ETH

Token for sale

-

80% (pre sale & crowd sale)

50%

46%

30%

Market capitalization

-

~$52,600 k USD

~ $77,700 k USD

~ $19,250 k USD

-

Accepts

ETH

ETH

ETH

ION

multiple cryptocurrencies (not specified)

Token

non-fungible token

ENJ, utility token

GTC

ION

EON, utility token

Platform

Ethereum

Ethereum

Ethereum

Blackcoin's core 

Ethereum with possibility to add new platforms

Concept

Buy a cat, mate it with someone else’s kitty and get cryptokittens which can be sold.

Smart gaming cryptocurrency powering a game development ecosystem that will enable developers to create groundbreaking, blockchain-based games - and empower gamers.

Blockchain gaming ecosystem, offering messaging service, token fund, currency trading platform, digital wallet and ICO platform.

Decentralized platforn that facilitates the development and monetization of new mobile games and rewards gamers financially.

Decentralized solution for game developers and gamers.

Achievements

The most popular app on Ether in 2017.
Community spent more than 12 million dollars on virtual kitties.
2k daily active users.

20 million registeres users (due to Twitter).
Strategic partnership with experienced game engine - Unity, american esports organization NRG and gaming magazine - PC Gaming.

Partnership with Love.pet - blockchain game.
Strategic partnership with TRON foundation pumps GTC token by more than 50%.

Network has 500+ active nodes generating 23 ION per day, which works out to about $600 USD per month.

Partnership with Crypto Alpace - the first EON Foundation game.
Crypto Alpaca game has over 200 000 registrations.

Considerations

Transaction volume (tokens) fallen from 1.3 million in December to 115 000 in May.

Dependence on one main target for adoption - Minecraft.

White paper is not available.
Lack of information on main sources.
Very ambitious plans with slight achievements.

Merchandise mechanism for additional funding.
Just one game since the ICO was released, in December 2017.

New project, SDK is not published.

Based on the comparisons above it follows that success for the project depends on partnerships concluded, as with ENJIN and Game.com. From this point of view, EON doesn’t have established relations as of June 21st, 2018. Also pet games are popular within the community and attract a lot of users and investment – e.g. CryptoKitties.  

Summary: The gaming industry is very attractive from the perspective of growth and demand on technical development. The market looks very competitive and already has plenty of blockchain solutions.

The main decentralized competitors – the Game.com and Ionity platforms, have already entered the market. Based on their experience it should be noted that the project could be vulnerable in the post-ICO period, and success is hard to predict.

Team & Advisors

Team

 

Aron Lyu

Tao Hu

Position

Co-founder

Co-founder

Total experience

4 years

5 years

Relevant experience

4 years

4 years

Relevant education

Yes

Yes

Professional achievements

No relevant achievements (languages)

No relevant achievements (languages)

Previous experience (positions)* - years

Product Lead at Bytedance Inc. - 1y
Entrepreneur in Residence at Morningside Venture Capital - ~1y

Co-founder of InnoVision (cutting-edge technologies for entertainment industry) - since 6/2016
Software Engineer at Oculus VR, Facebook - ~2y

LinkedIn

Yes

Yes

Connections

500+

500+

Endorsements / Recommendations

Yes

Yes

 

 

Mark Nedzelskii

Sunny Sun

Position

Manager, Community Relations

-

Total experience

<1 year

-

Relevant experience

<1 year

-

Relevant education

Yes

-

Professional achievements

No relevant achievements (languages)

-

Previous experience (positions)* - years

No former experience

Senior Engineer for Facebook (according to website)

LinkedIn

Yes

Not found

Connections

<10

-

Endorsements / Recommendations

Mentioned, not confirmed
 

-

 

 

Hao Dong

Will Lee

Position

-

-

Total experience

-

-

Relevant experience

-

-

Relevant education

-

-

Professional achievements

-

-

Previous experience (positions)* - years

No data

Operation Manager at DouYin & Tik Tok (due to the web-site)

LinkedIn

Not found

Not found

Connections

-

-

Endorsements / Recommendations

-

-

Advisors

 

Michael Zyda

Anshul Dhawan

Position

Director & Co-founder
Advisor

Co-founder

Total experience

32 years

18 years

Relevant experience

32 years

18 years

Relevant education

Yes

Yes

Professional achievements

16 publications, 5 patents, 5 projects

3 certificates, 2 patents, 1 project, 1 award -

Previous experience (positions)* - years

Director of USC GamePipe Laboratory since 1/2005
Co-fouder of Great Wall Tiger (creative studio for augmented & virtual reality) - since 1/2016

Co-founder of Equally (social education network for kids) - since 1/2018
Product Lead at Zynga (social game developer) - ~2y

LinkedIn

Yes

Yes

Connections

500+

500+

Endorsements / Recommendations

Yes
 

Yes

 

 

Feng Li

Position

Partner

Total experience

19 years

Relevant experience

19 years

Relevant education

No

Professional achievements

No data

Previous experience (positions)* - years

Partner of IDG-accel (investment firm) - since 5/2008
Founder of Moment System (internet ad monitoring) - ~1y

LinkedIn

Yes

Connections

500+

Endorsements / Recommendations

Yes
 

Summary: The team features 6 core members. Positions are not disclosed, and there are no direct links to LinkedIn. Based on 3 accounts found, we note that the team is young and have limited but relevant experience.  Further development of the project and a tough roadmap assumes the team growing in numbers, especially in development and marketing areas.

The advisors are experienced professionals in the games industry. One of the advisors, Feng Li, is also a early investor in the project. None of them mention the EON project in the ‘experience’ sections of their resumés.  

Token & Economy

The EON platform’s currency is the EON token.

  • Currency code – EON

  • Type – utility token, Ethereum based

  • Decimal places – 18

It is designed to support the platform’s economy and facilitate its growth.

Means of purchase:

  • Exchanges, taking into account that incentive tokens for team and investors will have a lockup period

  • Rewards for assisting the growth of the EON ecosystem – 30% of token distribution

  • In the 4-year period 315m (315,000,000) EON tokens ~ 15% of total will be released in equal portions every month.

  • In the next 4-year period half of 315m EON tokens will be released and so on.

  • Rewards for playing games and attracting users – amounts to be configured by developers.

EON can be spent on:

  • Payment to developers for all digital assets within the EON platform

  • Rewards for acquiring new users

  • Exchanges

  • The burn mechanism implemented by the EON Foundation – a specific amount of tokens will be bought by the EON Foundation when EON reaches 100k users and burned

SUMMARY: The whitepaper discloses the main features of EON token, including its supply-and-demand model. Necessity for a proprietary token is not obvious, as payment could be made with other cryptocurrencies, and exchange will imply additional transaction fees for participants.

Token price factor analysis

As a full description of the project is released, all factors may be re-evaluated:

Factor

Description

Price effect

Development and release of new products according to the roadmap

The roadmap seems generic, reflecting only main milestones of application development. The impact of this factor can't be estimated as of June 21st, 2018 as milestones will be achieved later.

Bullish / Bearish

Demand for the platform

Based on the competitive analysis it may be concluded that demand for the platform depends on the partnerships established. Currently there is just one confirmed partner - Crypto Alpaca game.

Bullish / Bearish

Sale of tokens by the team and advisors

The distribution proposal assumes a lockup period for team members - 4 year vesting period, for advisors & initial partners - up to 6 months, for EON Foundation - core team members - 2 years; within the first 2 years these funds will be used for R&D, marketing, etc.

Bearish

Pre-ICO bounty campaign

The EON bounty campaign is offering 20,000,000 EON tokens, equal to $600,000, between June 7 and July 26, 2018.

Bearish

Token burning mechanism

The token burn mechanism assumes that a specific amount of tokens will be bought by the EON Foundation, when EON reaches 100k users and then burned.

Bullish

Volatility of crypt omarket

Tokens would be used as an internal payment mechanism, therefore due to the high volatility of crypto markets the token price could fluctuate or even be subject to speculative activities (pump and dump etc.)

Bullish / Bearish

SUMMARY: Token price analysis has highlighted potential risks for token price stability. It should be noted that these factors were analyzed before release of the MVP and applications.  

Investment risk analysis

Based on the analysis performed, the following risks are identified:

Risk

Description

Level

GitHub account

The project doesn’t have an account on GitHub. Also, as there are no references to the smart contract code on official site, that prevents evaluating the  terms of the ICO terms. The development side of the project looks risky.

High

Market

Plenty of decentralized game solutions and an absence of entrance barriers highlight the industry as very competitive. A good idea doesn’t quarantee success. The main criterion will be partnerships.

High

MVP

The project doesn’t have an available MVP and refers to the CryptoAlpaca game, not developed by the EON Foundation.

High

Competitors

Aforementioned competitors - Game.com and Ionity platforms – have already entered the market and received support from partners and the community.

Medium

Team

The team has only 6 core members, whose previous experience can't be evaluated, due to an absence of LinkedIn profiles for half of the team. Further development of the project will require more developers and back-office employees (especially marketing).

Medium

Roadmap

Further roadmap development covers only application release and does not specify the business development process in much detail or the team’s plans regarding market coverage/number of platform users, etc.

Medium

Token price

The announced lockup period for advisors & initial investors is short - 6 months. The lockup period for EON foundation for further R&D is 2 years, so there is a risk that both groups could sell their tokens.

Medium

Budget plan

Absence of a budget plan could be a consequences of the financial concept’s vulnerability.

Medium

Legal risks

Privacy of data is a very important concern nowadays, and legal implications differ from country to country. However, blockchain is probably the best solution when it comes to data privacy.

Low


SUMMARY: The main general risks for the project are due to its early stage of development, and connected with the absence of a final vision for the project.   

 

 

The information contained in the document is for informational purposes only. ICORating received monetary compensation from the entity rated in this report for completing the ratings report.  

However, the entity rated in this report did not have the opportunity to approve this rating report before the report was published, nor did the rated entity have the opportunity to edit or remove this report once it was published. The views expressed in this document are solely those of the ICORating Team, based on data obtained from open access and information that developers provided to the team through Skype, email or other means of communication.

Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud. We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.