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Alehub Rating Review

Stable

Investment Rating

Expiry date: Expired 06 Oct 2018

We assign the ALEHUB project a “Stable” rating.

The ALEHUB project is entering the growing markets of project management and freelancing, which will positively contribute to the development of the project with the proper implementation of all of the announced functionalities. Currently, the MVP is running for macOS, Linux and Android. This fact shows that the team is closely following the declared platform development timeline.

The product has a number of competitive advantages and strengths, as well as various economic models for different development scenarios depending on the amount of funds raised. However, there are also a number of negative aspects that could affect the future development of the project and the results of the ICO.

First of all, we note the high level of competition in the project management and freelance markets. Most companies have already been working in these market sectors for many years, having built a solid reputation and a loyal customer base. And they too could also implement blockchain technology, if they deem it to be necessary.

The global marketing strategy of the project is not presented, which raises questions regarding the future promotion of the product.

The projected revenues of the project are also a cause for concern, as the project does not disclose its financial model.

In addition to all of the above, it may take up to 4 years to start the project, after which payments to security Token Holders will begin.

These and other factors listed in the chapters "Analysis of investment risks" and "Analysis of factors affecting the future value of tokens" do not allow us to assign a higher rating to the project.

 

The ALEHUB project uses the decentralized ALE platform. ALEHUB aims at developing IT solutions for solving problems in the project management sector. ALEHUB offers the ability to manage projects with a simple interface that supports Android/iOS. ALEHUB is compatible with the legislation of different states and each project is carried out within the jurisdiction of each state, which is defined in the smart contract.

The ALE platform is a platform for creating decentralized project management services based on blockchain technology. Support for multilateral smart contracts is one of the main features of the platform. Due to the ability to manage the relationships of different parties automatically, a favorable environment for their interaction is created.

The project team is developing the ALE platform and the ALEHUB project in parallel with the proceeds from the ICO.

Website

Whitepaper

Smart contract platform: Ethereum blockchain

Contract type: ERC-20

Token: ALE

Token price: 1 ALE = 0.00042863 ETH (1 ETH = 2,333 ALE)

Accepted currencies: ETH, BTC, BCH, LTC, DASH, USD

Minimum purchase amount: 0.0516 ETH

Size of total token emission: ~211,000,000,000 ALE

Number of tokens for sale: 110,000,000 ALE

 

Pre-ICO:

Start date: May 25th, 2018           

End date: June 25th, 2018

Soft cap: No

Hard cap: $3M (~5,600 ETH)

Bonus system:

  • By date:

May 25th, 00:00 - Jun 25, 23:59 – 25%  

  • By transaction volume:

1.43 ETH - 14.29 ETH - 2% bonus

14.29 ETH - 142.86 ETH - 5% bonus

+142.86 ETH - 10% bonus

Bonuses are accrued by date and by volume of transaction.

Tokens for the bonus system are issued in excess of the total volume of tokens for sale.

Currently, according to the information from the project website, 2,421 ETH has been raised so far.

 

ICO:

Start date: July 25th, 2018

End date: September 24th, 2018

Soft cap: $7.5M (~14,100 ETH)

Hard cap: $33M (~62,100 ETH)

Bonus system:

By date:

  • Jul 25th, 00:00 - Jul 29th, 23:59 - 20%
  • Jul 30th, 00:00 - Aug 03rd, 23:59 - 15%
  • Aug 04th, 00:00 - Aug 08th, 23:59 - 10%
  • Aug 09th, 00:00 - Aug 13th, 23:59 - 5%
  • Aug 14th, 00:00 - Sep 24th, 23:59 - 0%

By transaction volume:

  • 1.43 ETH - 14.29 ETH - 2% bonus
  • 14.29 ETH - 142.86 ETH - 5% bonus
  • +142.86 ETH - 10% bonus

Bonuses are accrued by date and by volume of transaction.

Tokens for the bonus system are issued in excess of the total volume of tokens for sale.

The distribution of the total token emission is as follows:

The future structure of the distribution of funds raised during the Token Sale, depending on the amount of funds raised, is as follows:

According to the team, $1.2M was withdrawn from the distribution during the closed sale, which was carried out by the project in November-December 2017. The parameters of the closed Token Sale are not disclosed.

ALE tokens will be issued as they are sold. Tokens intended for the team, the bounty and the advisors will be created in proportion to the number of tokens sold.

 

The ALE (Automatic Labor Exchange) platform lists the support of multilateral smart contracts, the building of rules of communication and work by the participants, and compliance with most jurisdictions as the main advantages of the project. The team is planning to integrate elements of the DAO (Decentralized Autonomous Organization) into the project management system to create a universal protocol.

The main objectives and issues the project addresses are:

  • The automation of contractual relationships with the help of smart contracts.
  • The automation, acceleration and standardization of the verification processes of platform participants (by the project itself at the initial stage), of the technical specifications and of the results of the work.
  • The coordination of the management system, the rules of record keeping and the frequency of its compilation in the contract.
  • Consensus of the parties’ confidence via the distributed ledger provided blockchain, backed by financial guarantees and reputational risks through the ALE system, which acts as a neutral intermediary.
  • The automatic processes of payment settlements between parties.
  • The flexibility of the project, which includes the possibility to change terms in the presence of consensus on financial and management decisions.

According to the team, the ALEHUB project is primarily aimed at solving IT problems and the problems of project management. According to the documentation, the project has pre-installed sets of classes for Parties and Contracts specific to the selected industry.

Classes of parties

Classes of contracts

Actions of members

Customer

Contractor

QA party (Quality Assurance Party)

Acc party (Acceptance Party)

Publication contract.

Identification contract.

Contract for receiving data from the Blockchain Database with definite time and size parameters.

"Multilateral agreement" class of contract.

Contractors’ resume publication with an option of identification.

Contractors’ commercial offer publication with or without prices.

Publication of technical specifications order for technical specification, description of initial date and preferences, order for prototype, contract wording, determination of milestones and work schedule, determination of general QA parties.

Currently, the MVP available for macOS, Linux and Android is downloadable from the project website.

ALEHUB can occupy its market niche if they carry put everything as planned, as the proposed solutions are interesting, and they can be useful for freelancers, small companies and start-ups, who are actively entering the market and have a modest budget. However, it should not be forgotten that this market has long had leaders who want to cover all areas, and the legal regulation of cryptocurrencies and smart contracts has not yet been developed in many countries, not to mention the fact that the ability to use cryptocurrency as a payment method for businesses is not widely available.

 

4.1 Market analysis

The ALEHUB project will develop its activities in two directions: project management and freelancing.

According to the latest report by Transparency Market Research, the project management industry is expected to grow by 9.3% between 2017 and 2025, and it will reach $41.69B. In the industry, the development and implementation of ERP systems is rapidly developing, attracting new suppliers and consumers.

The main share of customers of ERP systems are representatives of the industrial sector. They are followed by the banking, retail and distribution sectors. An interesting trend is that the increase in demand for integrated management and accounting automation systems among enterprises from the spheres of professional services and the public sector.

Panorama Consulting Solutions, who are dealing with the implementation of ERP systems, announced a rating of the largest manufacturers of such software. Their analysts rated vendors by market share, cost and duration of product development, the timing of return on investment and software functionality. Information about the software functionality was obtained based on the evaluation of demonstration versions of products by Panorama customers.

According to the data, SAP occupied the largest share in the global ERP system market in 2016 (with more than 20%), and Oracle (19.9%) and Microsoft (9.4%) also ranked among the top three.

SAP also ranks first in the payback period of investments in ERP. The speed of implementation is led by Oracle products and the cost of implementing is led by NetSuite systems, which on average cost customers 2.8% of their revenue.

The freelance market has also been gaining momentum recently. In first place, in terms of the number of registered freelancers, is the United States. According to the study "Freelancing in America: 2017" commissioned by Upwork and the Freelancers Union, the popularity of freelance work among qualified professionals in the US is increasing every year.

The US freelance market is growing faster than the total number of personnel in the US, outpacing labor growth at a rate 3 times faster since 2014. In 2014, it totaled 53M people and grew to 57.3M in 2016 (an increase of 8.1% from 2014), while the American workforce grew from 156M to 160M people over the same period of time (an increase of 2.6%).

It is estimated that 57.3M Americans engaged in freelancing brought to the US economy about $1.4T in 2016.

Freelancers will represent the bulk of the US work force by 2027 if current growth rates continue.

Currently, the project management industry is a steadily growing market, which attracts more and more new suppliers. Over the years of existence of this industry, a number of classical suppliers of ERP systems have been formed with their qualified staff and client base. With the development of the Internet, freelance sites have emerged, which have also occupied their niche in the market. Accordingly, it is obvious that this industry is highly competitive and new players whose platforms are based on blockchain technology need to develop additional competitive advantages to find their client base, and the transition to blockchain for classical players is only a matter of time.

4.2 Competitive analysis

Since ALEHUB will carry out its activities in the project management market and the freelance market, its competitors will be:

  • Companies in the field of project management systems.
  • Freelance exchanges.

We identified the following suppliers of ERP systems among the systems of project management:

SAP SE (SAP ERP) – A German company and Europe's largest software manufacturer. The company takes the fourth place in the list of the largest software developers in the world.

SAP ERP is software that enables users to automate the professional activities of representatives of different specializations. Such applications are aligned with a specific industry, simplifying the work in it and communication with other structural units significantly. SAP consists of several functional blocks, which includes the management, integration and solution of all tasks for: Accounting and Finance, trade and customer relations (CRM systems), treasury, administrative staff, production, supply, warehouses, logistics (SCM, EWM), risk management and strategic planning (GRC), system administration, data management and web services, etc.

Oracle Corporation (Primavera) – An American corporation, a developer of software for organizations and a supplier of server equipment. The company specializes in the production of database management systems, middleware and business applications.

Primavera is an enterprise resource management system designed to organize domestic economic activity, as well as to optimize the procurement, supply, production, personnel and finance processes. It includes management and automation of both continuous production and production by parties and orders. It provides full financial control, personnel management, enterprise logistics management and project management.

Microsoft (Microsoft Project) – The Microsoft Corporation is the world's largest company specializing in the production of software, the provision of services and the development of Internet technologies for computers.

The Microsoft Project was created to help project managers in developing plans, allocating resources to tasks, monitoring progress and performing work volume analysis. In the market of small and single-user solutions, Microsoft Project is virtually a monopolist, earning more than $900M in sales per year and having a client base of 200M users, which is about 80% of the market in the small and personal solutions sector.

Currently, the freelance market has well-developed classical electronic labor exchanges, which have a multi-million audience of users. A clear representative of such platforms is:

Freelancer.com – A classic freelance platform where more than 20 million freelancers are registered. The website charges fee on both sides from 3-10% and a membership fee of $0.99 - $49.95 per month.

There are also several blockchain-based platforms in the freelance market:

BlockLancer.net - A distributed autonomous labor market (DAJ) based on the Ethereum platform, a fully self-regulating platform for job searches and project execution. The platform also solves the difficulties that are common for freelancers worldwide: the lack of fake reviews, guarantee of payment for freelancers, the lack of influence of platform owners on the processes between clients and freelancers.

The project tokens can be compared to shares, since they are a share in the project. Since the platform is completely owned and subordinated to Token Holders, no one can interfere with the operation of the system.

The platform has a 3% fee.

The ICO of the project ended on February 28th, 2018. The current capitalization of the project is $799,000. Tokens are traded on the following exchanges: Sistemkoin, IDEX, and DDEX.

UMKA - A blockchain-based decentralized labor exchange for the implementation of projects and the creation of working teams. UMKA is a system that allows employers to formulate the exact requirements for employees and performers to improve their competence in accordance with market trends.

The platform also solves some of the difficulties that arise with similar services: the lack of guarantees of timely payment and proper execution, high commission fees (the commission fee is usually between 2.7% and 20% of the amount of each transaction in the modern market of freelance platforms), the inability to resolve conflict situations in a bilateral manner, the lack of communication within the market, traditional smart contracts, and the language barrier.

UMKA charges a 1% fee within the platform. All proceeds will be distributed among the holders of UMK tokens.

At the time of writing the review, the project was conducting its public Token Sale, which will last until August 1st, 2018.

As for the competitive advantages of the ALEHUB platform, we note:

  • The possibility of concluding contracts, the terms of which can be customized for the legislation of the country where the tasks of the customers will be carried out.
  • Support of multilateral smart contracts.
  • The size of the commission for the withdrawal of funds favorably differs from the commissions of both classical competitors and blockchain-based ones.

The project team also relies on the integration of DAO (Decentralized Autonomous Organization) elements into the project management system, which, in the opinion of the team, will solve the problems inherent in the industry. In general, the ALEHUB project enters a highly competitive market, where there are a sufficient number of large players who also strive to follow the same path of innovation.

 

The ICO of ALEHUB is staged by Effective Energy Ltd , a legal entity registered in Hong Kong in 2011.

Two teams are involved in the development and implementation of the ALE platform and the ALEHUB project: Effective Energy and Serokell, altogether comprising of 22 people, with 5 people involved as Advisors.

The Effective Energy team owns all of the rights of the ALEHUB project. The team develops all of the components of the product, and it is also responsible for the legal, marketing and organizational issues. Information on key members of the project is presented below:

Mikhail Gromyko – CEO

He has been involved in the project since January 2016. Mikhail has been working as the CEO of Effective Energy Ltd since January 2014.

Alexej Osipenko - COO

He has been involved in the project since March 2017. Alexej holds the position of COO at Effective Energy Ltd.

Education:

  • Saint-Petersburg State University of Engineering and Economics – 1995-2000

Ilya Shilov - CTO

He has been involved in the project since April 2018, he holds the position of CTO at Effective Energy Ltd. Currently, he is a student at the University of ITMO (St. Petersburg).

Egor Loktev - Project Lead

He has been involved in the project since 2017. Egor has held the position of CPO at Effective Energy Ltd since 2016.

Education:

  • Russian Economic University
  • St. Petersburg State University

The Effective Energy team includes specialists in development, marketing, and legal issues.

The Serokell team acts as a technical partner for the development of the backend part of the project: the protocol and the platform. The team consists of:

Arseniy Seroka - Lead developer

Alexander Rukin - UX/UI designer

Kirill Elagin - Lead developer

John Mostovoy - Lead developer

We would like to note the following advisors:

Nikolay Shkilev – Founder and CEO of Private Business Club.

Nikolay is an Advisor to the following projects: CookUp, Sentigraph.io, Hydrominer, Fox Trading, and 38 more.

Phillip Nunn – Founder and CEO of The Blackmore Group. Phillip has more than 15 years of experience in financial services. Phillip specializes in capital management, investments in commercial real estate and financial technology.

He is an Advisor to the following projects: SportyCo, CookUp, Sentigraph.io, Votem, and 27 more.

Vladimir Nikitin Advisor and world-class business consultant with more than ten years of experience in the legal, financial, retail and IT industries.

He is an Advisor to the following projects: PokerSports, CookUp, TimeBox, PLAAK, and 57 more.

The project does not state its founders are. The project team is represented by young specialists. The team includes specialists from different fields of activity, but there are no specialists with experience in the field of freelancing. The leaders of the project have management experience in companies from the IT sphere. Almost all of the team members work together at Effective Energy Ltd. The company was registered in 2011 in Hong Kong, an innovative software development company specializing in Big Data, AI, neural networks, distributed computing, blockchain and distributed accounting technology. However, the company's website is not very informative and was only created less than a year ago.

It is worth noting that the experience of some members of the team is not confirmed and there is no information about their experience on the website or in the whitepaper.

In general, the composition of the ALEHUB team is sufficient to realize the tasks set for the project, which they will have to solve in the next few years.

 

The team announced the existence of two tokens in the platform.

The first token is ALE. ALE tokens will be issued according to the ICO results.

There is a smart contract repository available on GitHub:

Token name – Ale Coin

Symbol – ALE

Decimals – 18

At the time of writing the review, the smart contract was not audited.

The ALE token is an ERC20 Ethereum blockchain security token available for storage in various wallets compatible with this standard. It is acquired in order to obtain the right to pay dividends from the proceeds of the project and vote "for" and "against" possible changes related to the system.

The second token is AXEL (ALEHUB eXchange Element). This token is for internal settlements within the ALEHUB platform and will be used as a cost container. This step is aimed at reducing the risks for participants, associated with the high volatility of the crypto market. The AXEL token will be pegged to the US dollar at a ratio of 1 AXEL = $1. In the future, the base currency can be changed, taking into account the state of the market. Changes will relate exclusively to the ratio of AXEL and the base currency.

The AXEL token is the key to accessing the ALE platform within the ALEHUB project. The entire line of financial products and services is based on the interaction of users with the use of AXEL tokens. The payment of fees for using products and operations on the platform is determined in AXEL.

According to the provided documentation, the size of fees is as follows:

  • A transaction that transitions the system between states in a fixed amount – the fees are technical, providing protection against attacks on the system through infinite cycles, etc.
  • Execution of a smart contract - in proportion to the number of virtual machine byte codes executed - the fees are technical, providing protection against attacks on the system through infinite cycles, etc..
  • Withdrawing funds from the system - 0.1% of the amount of funds withdrawn.
  • Verification in the ALE system - $5.
  • Commission for the publication of documents in a nested blockchain - $0.10 for each document.

In the first and second cases, the size of the fee will be assessed only after a complete description of the virtual machine, and according to the team's statement, in any case, their impact on the financial result is likely to be less than a tenth of a percent.

According to the team, ALE tokens can be bought on exchanges and also exchanged for other cryptocurrencies or fiat. AXEL tokens will be used only within the project and they will not be available on exchanges. The AXEL token is created by the gateway (liquidity provider) when funds are placed in the system and it is burned when funds are withdrawn.

In our opinion, the use of the AXEL token on the ALEHUB platform is justified, since the implementation of all platform functions will be carried out with the help of AXEL tokens, which provides participants with insurance against the volatility of the crypto market but carries the risks of the issuer. The ALE token bears only two functions for the holders: the right to receive dividends and the right to vote. It is a security token, so its use is subject to certain legal risks.

Analysis of factors affecting the future value of tokens

The ALE token is a security token. ALE Token Holders will receive weekly dividends from the proceeds of the platform, therefore the token exchange price will depend on the turnover of tokens in the system. It is worth noting that the platform will pay an income of 30% of the revenue, not the profit or Ebitda, which will make the ALE token more attractive to investors, due to the greater transparency and simplicity of operations. The revenue of the platform will depend on the number of platform users and successfully completed transactions. The more participants of the system are interested in ALEHUB’s services, the faster the platform will grow.

The main revenue of the project will be formed from the following sources:

  • Verification - $5.00.
  • Publication of documents - $0.10 for each document.
  • Commission for withdrawal of funds - 0.1% of the amount of funds withdrawn.

Revenues from verification fees will be allocated to the expansion of the network of verifiers. Revenue from other sources will be allocated to the following purposes:

  • 40% - for the remuneration of miners.
  • 30% - for payments to ALE Token Holders.
  • 20% - for system maintenance and development, and marketing.
  • 10% - for legal expenses.

ALE Token Holders will be able to vote:

  • For system improvements and changes over time.
  • For correcting the order of the ALE token circulation.
  • For technical modification, affecting the process of developing the platform and expanding its functionalities.

There are no other functions of the ALE token on the platform. The AXEL (ALEHUB eXchange Element) token will be used for internal operations on the platform. AXEL will solve the problem of volatility of cryptocurrency on the platform. The token rate will be pegged to the dollar and amount to: 1 AXEL = $1. The AXEL token will always be inside the system on user accounts, but it can be exchanged to any currency of their choice at any time. A commission will be charged for withdrawal of funds from the platform. The commission is introduced to avoid manipulations with the exchange rate.

Dividends to ALE holders will be paid in AXEL tokens. Since the AXEL rate is pegged to the US dollar, when dividends are withdrawn, holders will not face the risk of volatility of cryptocurrency, paying only the withdrawal fee. The very fact of the payment of dividends to ALE holders will affect the exchange value of the ALE token positively.

The project documentation provides projected revenue figures from successful projects and the publication of documents for the first year of the platform. The project is planning to cover 3% of the total volume of the project management and freelance market. Proceeds from all project revenues are expected to reach $239M, with revenues from commissions charged amounting to $197M. Therefore in the first year of operation, the project expects that the platform's turnover to reach $197B. According to the project's calculations, dividends per 1 ALE token will be $0.45, which will pay their purchase price back. Profitability will be 150%, but when the ICO reaches the Soft Cap and if the development scenario announced by the project is implemented, dividends will be paid to holders only after 4 years. In our opinion, the figures given by the project on revenue from commissions are completely unrealistic and are not even comparable with the total world volume of the project management market (more in the "Market Review" chapter), which may mislead potential investors. Since the project does not provide any other data, we cannot estimate the projected payback period of the ALE token to its holders.

Participants will receive the following bonuses during the Pre-ICO and the ICO:

  • 25% during the Pre-ICO, the bonus can reach up to 35% for large participants (> $100,000).
  • The ICO will start with a 20% bonus, which will decrease by 5% every 5 days, for large participants the bonus can be 30% (> $100,000).

During this period, ALE tokens may be of interest to early participants for speculative purposes. Consequently, the token price may create pressure as a result of the supply to early investors when listing on exchanges. However, the team does not disclose the terms and names of exchanges where the tokens will be listed.

If the Soft cap is reached, the project will launch in 4 years’ time, and if the Hard cap is reached, the launch is scheduled for 2020. The demand for ALE tokens is not expected prior to this moment.

77% of all tokens are offered for placement, the remaining 23% of tokens will remain at the disposal of the project. The project team will be allocated 10% of the total emission. The blocking period will be 1 year from the end of the ICO. ALE tokens left at the disposal of the project can be sold on the open market. This factor may put pressure on the price after listing on the exchanges.

 

We note the following risks for the ALEHUB project:

There are large players in the project management and freelance market who also strive to follow the same path of innovation. A number of large players in this market have relatively unlimited financial resources and can adopt new opportunities for themselves, which sometimes does not allow small novice projects to gain significant turnover. There is a risk that the project will not be able to occupy the desired market share, due to the introduction of new technologies by other market participants.

The ALE token is a security token, in connection with which the project may have future difficulties with regulators and circulation on exchanges.

During the ICO, the rate of ALE tokens is pegged to other cryptocurrencies and this creates an additional risk, due to the increase in the rate of cryptocurrency, the price of 1 token in fiat becomes more expensive.

The Hard cap is set at $33M, most of funds raised will be spent on marketing, development and testing of the system. However, there is a risk that the project will not collect the planned amount, as the average size of funds raised among the project's competitors (freelance) did not exceed $10M.

Depending on the amount of funds raised during the ICO, it may take 2-4 years to implement the full functionality of the platform. The current ICO market is highly speculative for the most part, which may affect the future development of the project. Current investors in most cases are only short-term and they are not ready for such long expectations amid the strong volatility of the crypto market.

The calculation of revenue for the first year of the project given in the whitepaper raises some questions. We did not see how the proceeds from the commissions in the amount of $197M were projected. The financial model of the project is not disclosed in the documentation, therefore it is not possible to analyze the economic part of the project in the short and long-term. The documentation does not provide any calculations on the basis of which it would be possible to assess the sustainability of the project at the time when any project coming to the market experiences its greatest difficulties with promotion, i.e. in the first 1-2 years after the launch of all platform functionalities.

The global marketing strategy is also not disclosed by the project. The budget for marketing will be $900,000 (12% of funds raised) if the Soft cap is reached and $12M (36% of funds raised) if the Hard cap is reached. The team does not disclose how the funds will be used. For this reason current investors have no idea about the ways of future product promotion. Without proper marketing, even with competitive advantages over other projects, the consumer simply won’t know about the project.

The team’s tokens will be unlocked 1 year after the end of the ICO. There is a risk that the motivation of the team can be reduced as the full launch of the project will take place in 2020 at best.

The ALE token does not have a functional application inside the platform. It can work without the token, which calls into question its necessity. Obviously, the emission of ALE tokens is needed to attract initial investments for the start of the project. To attract investors, the project promises to pay dividends to holders, but the first payments can take place no earlier than 2 years, if the Hard cap is reached. This fact can affect the decision of investors to participate in the ICO.

 

 

The information contained in the document is for informational purposes only. The views ex-pressed in this document are solely personal stance of the ICOrating Team, based on data 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.