We assign the Storm Token project a "Risky +" rating and do not recommend buying Storm tokens to long-term investors. Participants hoping to receive speculative income immediately after the ICO should be extremely cautious and carefully monitor the sales process, since the large hard cap will most likely not leave investors’ demand unsatisfied, hence the token price in the secondary market will not increase.
Considering the fact that the global market for freelance services has a high potential and is growing gradually, the idea of optimizing the interaction between customers and professionals providing such services is very attractive. The undoubted advantage of this project is an already functioning prototype - the BitMaker application - which can be downloaded from the AppStore and Google Play. According to the official website, the application has been downloaded more than 1 million times.
We also consider the team (the advisory council for the project in particular) very successful. It includes several significant people in the blockchain community.
Nevertheless, there are a number of questions to the founders regarding the implementation of business solutions to attract users, and how soon the pool of executors will be filled so that the platform can really provide quality services.
In addition, the documentation omits fundamentally important aspects of the project being developed, such as the financial and technical aspects. The white paper does not offer any idea about the market for similar platforms in general, and in particular does not consider any competitors. Also, there is no roadmap for the project from official sources, nor scenarios for implementing the platform with different amounts of funds raised during the crowdsale.
The hard cap for the project in our opinion is too high and cannot be justified, which is likely to entail a decrease in the token price in the short and medium term.
General information about the Project and ICO
Storm Market is a platform for placing and performing various types of tasks based on blockchain technology. The first step on the way to product development is the existing BitMaker application (which will be renamed Storm Play) which has had more than 1 million downloads in 187 different countries. Its idea is that a user receives rewards in the form of satoshi (1/100,000,000 of a bitcoin) for performing micro-tasks, such as installing new games, applications or viewing advertisements.
The project team intends to use blockchain technology to create new opportunities for users worldwide. Within the platform users will have the opportunity to receive revenue in the form of Bolts awards for performing micro-tasks such as QA testing, computer training and P2P freelancing. The blockchain algorithm, in turn, allows the conduction of micro-transactions in a timely and efficient manner.
During the pre-sale the team, according to their official blog, has collected about
$16.5 million (55,678 ETH) .
GitHub: not available
ICO start date: November 7, 2017 6:00 AM PST
ICO end date: December 7, 2017 6:00 PM PST
Target cap on crowdsale: 206,295 ETH
ICO price: 1 ETH = 26,950 STORM Tokens. The price per Token is 0.00003711 ETH
Minimum Buying Transaction: no
Maximum Buying Transaction: 100 ETH
Bonus: buyers of the first 945,000,000 tokens will receive a 15% bonus
Accepted payment: ETH
Total emission: 10,000,000,000 STORM Tokens:
- 65% crowdsale
- 25% users and partners
- 10% team
Ditribution: no data available
Token Issue Date: no data available
Vesting: 1 year lock over a 4 year earn-out
Escrow: no data available
Project services and their usage
StormX Inc. is planning to build an optimized Storm Market platform with a hybrid implementation on the basis of a blockchain system, using proprietary services. Storm Market will work in a similar way to the AppStore or Google Play - as a platform where users can create and accept assignments using smart contracts. The team strives to turn Storm Market into a platform that works via a combination of API and other proprietary software tools and applications, as well as smart contracts based on Ethereum for various tasks that will be performed using STORM tokens.
Storm Play, in turn, will serve as a transition from a mobile application to blockchain, along with a massive increase in usage and a supplement of additional features.
Users of the system will be "Storm Makers" who will send tasks to STORM Play and pay with STORM tokens for them or "Storm Players" who receive rewards for performing tasks in Bolts. Bolts, which users earn by performing tasks, help them to obtain a higher rating. In addition, these tokens can be used for other tasks - they are also a currency for which a performer can buy top places in the search list for users ready to start another micro task. This is similar to the "boost points" system used at minds.com.
The documentation does not specify how these smart contracts will work, nor how users interact with each other. In particular, there is no detailed information on how payment will be implemented or how the rating for each user will be confirmed: there is currently the possibility that a user can receive a task solution without paying for it. The concept of Storm Markets replaces services such as Freelancer, as well as the services of intermediaries. This implies that each party (the customer and the contractor) will be on better economic terms.
The process of performing tasks in the Storm Play application takes place in a game form, which makes it possible to make monotonous work much more enjoyable, and encourages active user participation. The basic unit of the process of gamification is "action cycles" - when a task is completed, a Storm Player can increase their rating in the system - their number of Bolts increases as well as their experience.
Unfortunately, there is no technical description of the project in the white paper. Public codes and smart contracts for the platform are not represented here for the community either.
Development strategy and Roadmap
The documentation does not offer any information regarding further actions of the team after the end of the ICO. The roadmap listed on the project website ends with the date 20.10.2017, when the ICO starts.
In our opinion, this industry is very promising and is characterized by an intensive growth in the number of both employers interested in this type of workforce and professionals supplying the work, who prefer freelancing rather than work in offices.
According to Forbes, at the end of 2016, the global market for freelance services reached $1 trillion. These services are often represented by separate agents with a large commission, who work with PR agencies also adding a margin to their services. Therefore as a result the cost is high for the end customers, while the executors get little, since most of the amount is distributed among agents. It is logical to assume that quality of services suffers.
In 2017 the market for freelance services continues to grow significantly. The publication gives examples of such large companies as GE and P&G, who actively use contract work for their business. However, it is noted that there are serious legal and regulatory flaws in this sector of the economy - at the end of last year, New York City council drafted a bill according to which freelancers will have some legal protection against unscrupulous employers.
Thus, decentralized technologies are ideal for economic interaction between people, excluding middlemen who take high commissions, and the risks of non-payment of remuneration.
According to Truelancer review, more than 50% of the entire market of freelancers is based in the US:
In this case, according to PWC:
- There are about 54 million freelancers In the US, which is 34% of the workforce of the entire active US population.
- The age range of freelancers is as follows: 30% millenials (21-34 years), 33% Gen-X (35-50 years), 29% baby boomers (51-68 years); others are aged 69 and over.
- 38% of professionals cite freelance as additional income.
- 50% of respondents consider the lack of sustainable income a serious problem.
Europe is in second place for the number of freelance professionals. In the UK, the leader in the European freelancing market, in 2016 alone 2 million freelancers were involved, 43% higher than in 2008.
It is notable that 1.77 million state ‘freelancer’ as their main job.
There are many different data sources for market volume by profession. In our opinion, the most meaningful and accurate information is provided by HR portals, in particular Paychex - with a link to Indeed.com:
Proceeding from the diagram, the main popular freelance services are Design, Microsoft, Photoshop/Adobe, Illustration and Excel. In our opinion, none of these industries can be implemented for example from a smartphone. We also find it difficult to conceive of the conditions for executing this type of work via a smart contract, which could serve as a serious obstacle to the mass distribution of such a service.
Thus although the fact of rapid growth within this sector cannot be doubted, it is still unclear if the product is of any use in this industry.
StormX features professionals whose names are associated with popular Apple Store applications, as well as experience in developing successful blockchain community projects.
Almost the entire team was formed a couple of years ago, and they have already implemented the BitMaker project. Among its members are the CEO, Simon Yue; the STO Calvin Hsieh; the SOU Arri Yoo, as well as John Nolz, the development manager and several engineers.
The total number of team members is 11, in addition to which 10 advisors are involved.
The founder and CEO is Simon Yu, who graduated from the Foster School of Business of the University of Washington in 2014. With modest experience as financial and credit analyst with Amazon and KeyBank, at the end of 2014 Simon opened a successful Korean-Mexican cafe in Seattle. From this Simon was able to generate revenues of more than $500,000 from an initial capital of $100.
Rui Maximo is the CTO. Rui has more than 25 years of experience in IT development and engineering, he originally graduated from Brigham Young University (Jutta, USA) in Mathematics and Abstract Algebra.
Arri Yu - COO. Arri has experience in implementing successful start-ups.
The team of STORM advisors includes well-known business people such as Bill Shihara and Antoni Di Iori. Because of this, STORM can be added to Bittrex. The project will also use the Jaxx wallet during its ICO.
Among the most well-known advisors are:
- Bill Shihara - CEO and founder of Bittrex; has extensive experience in the field of cyber security for Amazon, Blackberry and Microsoft.
- Guy Benhartzi - CEO of Bancor.
- Anthony Di Iorio - Co-founder of Ethereum and the Jaxx wallet.
- Brian Kelly - Manager of CNBC.
The team recently announced that when staging the ICO, users will be able to send ETH directly from their Jaxx wallet and immediately convert it into STORM tokens. Thus, the creators seek to attract the maximum number of participants in the sale, simplifying the process of buying tokens.
The project also offers the distribution of free STORM tokens to all BitMaker users (after rebranding to Storm Play).
The white paper does not disclose a marketing strategy for the project, which will involve a large number of both performers and customers of certain types of service.
Competitive Advantages of the Project
The current centralized platforms in the sector have created a fairly large market. Companies like Fiverr, Taskrabbit, Upwork and Mechanical Turk have a huge pool of freelancers worldwide, but the existing inefficiency of the working method significantly devalues the work of many of these professionals. Participants in the centralized platforms mentioned above lose up to 30% of their real wages, giving up a substantial part of their earnings to pay commissions. Blockchain can potentially change this dynamic due to an effective reward mechanism monetized by conversion to STORM tokens.
The Mechanical Turk service from Amazon is the largest and most visible service in the same field of activity as the developed platform. Companies can use Mturk for all kinds of services, from audio transcription to visual identification of a person, corrections and other services that cannot exactly be performed by computers, but which are not particularly high-value or highly skilled.
It is interesting to note that Mechanical Turk has only two options for paying a performer for completing a micro-task: the calculation is made by transfer to a bank account or payment with an Amazon gift card. People in countries where Amazon cannot engage in banking (almost everywhere except the US and India), or people who do not have banking services in general, must accept Amazon gift cards. In this context, the reviewed platform certainly looks more attractive.
There are also quite a few websites offering similar services for finding freelance work in different professional fields, for example https://www.peopleperhour.com/, or https://www.guru.com/, which do not utilize blockchain. Commission on these websites is also significantly lower than the conditions that the team considers.
The market for services offered on the basis of blockchain has no analogues. Ethereum also implements the BitJob project, offering business and students the chance to meet each other for short-term work cooperation. Wordcoin is a platform for services offered in the field of copywriting, translation of foreign languages, SMM and ORM. At the time of writing, both projects have collected about 2.4 million dollars and 875,000 dollars respectively during their ICOs.
- https://support.taskrabbit.com/hc/en-us/articles/204411610-What-is-the-TaskRabbit- Service-Fee
- https://www.guru.com/help/freelancer-help-center/my-profiles/membership-informatio n/#what-are-project-fees
- SMM - posting of announcements in social networks with an active SEO link
- ORM - renting pages on popular resources for the purpose of posting updated content
Risks of the Project
STORM is quite an interesting project; it should also be noted that the terms of the tokensale are quite risky for investors. According to the team, the project has received a strong community response to the sale - exceeding the expectations of the founders, it is likely that the crowdsale will attract a high value. At the same time, the amount stipulated for the hard cap in our opinion is too high for such a project, and the need for this amount is not proven. The documentation does not contain any details for the development and implementation of the platform either; therefore it is difficult to analyze the adequacy of such significant investments.
The uncertainty of important points in the project’s implementation which require specificity is also a drawback. Some aspects, such as the financial development model, scenarios for the distribution of funds, as well as the marketing strategy and the roadmap are not even mentioned in the white paper. In particular, the documentation does not justify the team’s wish to transfer the existing project (BitMaker) to a decentralized platform. In fact, the current product could be equipped with additional functions and capabilities to perform micro tasks. The founders say that decentralization will help make payments and micro-transactions more efficient. In our opinion, this is not worth the declared level of hard cap.
In addition, there are some questions about the pre-sale being conducted - some large investors managed to purchase 15% of total tokens within the private investment round. While bonus tokens (about 7% of the offer) will be blocked for 3 months, this lockout is not provided for the initial 15% of the offer purchased during the pre-sale round. This means that buyers of tokens during the crowdsale may face speculation immediately after the completion of the ICO.
Currently it is also very difficult to evaluate Storm tokens in terms of risk from regulators - the documentation does not fully disclose whether the token can be considered as an investment tool, or whether it can still be described as a utility.
Economy of the Project
The documentation does not disclose any information on the economic side of the project being developed. The only exception to this is a mention of the commission paid in tokens when making a deal on Storm Market - this will be 1%. The developers assure us that more detailed project information will appear after the crowdsale of Storm tokens.
Investment highlights of the token
StormX offers the ERC20-compatible STORM token, which is released on the Ethereum platform. Using the information provided on open sources, we do not have an opportunity to assess its prospects in the market, nor the conclusions about how realistic its development or subsequent implementation can be.
In our opinion, study of the project itself, as well as information provided to users via open access, does not enable a full understanding of the essence of the platform, its main goals, advantages and mechanism of operation. The lack of critical information on development progress, as well as the financial component and marketing strategy pose a lot of questions and cause many doubts.
The quantity of declared funds required for product development also seems overstated and unjustified, as a result of which we do not recommend buying Storm tokens to long-term investors. Participants wishing to receive speculative income immediately after the ICO should be extremely cautious and carefully monitor the sales process, since a large hard cap will most likely not leave investors’ demand unsatisfied. The token’s price on the secondary market will therefore not increase.
The information contained in the document is for informational purposes only. The views expressed 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.