CASPER API Rating Review

Rating

We assign the Casper API project a “Stable+” rating.

Casper API develops its activities in the growing cloud storage market, offering its services at prices that compare favorably with those offered by competitors. The opportunity for users to reduce costs makes the project promising and creates a demand for its services.

Projects that provide cloud storage services are high in demand among crypto enthusiasts. This fact can be confirmed by the successful ICOs of Casper’s competitors and the sale of all of the token emission by the Casper API project during the Pre-ICO stage.

The product has some competitive advantages and strengths, such as an economic model for various development scenarios, good scalability and services for binding the token to the platform. Their detailed marketing program is also worth mentioning.

We would also like to make note of the following factors that could have a negative impact on the future development of the project and the forthcoming ICO:

Currently, there are several direct competitors in the market, with both blockchain and non-blockchain platforms, that could hamper the project’s development.

All issued CST tokens will remain in the system no matter what the outcome of the ICO. The project controls 24% of the emission provided that the Hard cap is achieved. If the amount of funds raised is less than the maximum, an even larger share of the emission remains under the control of the team (up to 80%).

The freezing of investors' tokens for operations on crypto exchanges until with a phased release from November 2018 to May 2019 and the absence of bonuses for the participants with investments of less than $100,000 may deter short-term investors from deciding to participate in the ICO.

The members of the project team do not have much experience working together.

General Information about the Project and ICO

Casper API is an infrastructure for decentralized data storage on any blockchain platform. The project will provide for the use of all typical functions of cloud storage and the infrastructure will be compatible with all applications and offline services.

The service will provide customers with a number of advantages while storing information:

  • High transfer rate.

  • Protected storage and reliability.

  • Cost effective.

Website
Whitepaper
Smart contract platform: Blockchain Ethereum
Contract type: ERC20
Total emission: 440,000,000 CST

Pre-ICO: December 2017
Token: CSPT
Price: 1 CSPT = $ 0.08
Hard cap: $ 1,040,000
Pre-ICO has been completed. According to the information on the website, the Hard cap was achieved within 1 hour.

CSPT tokens can be converted to CST tokens from the start of the ICO.

ICO (Pre-sale): 11.05.2018 – 29.06.2018
Token price: 1 CST = $0.12
Soft cap: $ 6,700,000
Hard cap: $ 28,600,000
Accepted currencies: ETH, BTC
During the Pre-sale, remuneration to large investors is provided in the form of additional CSTs:

  • $10,000 -$100,000 - 0%

  • $100,000 - $300,000 -10%

  • $300,000 - $500,000 - 15%

  • $500,000+ - 20%

ICO (crowd-sale): 30.06.2018 – 30.07.2018
Token price: 1 CST = $0.16
Hard cap: $3,160,000

Tokens sold during the Pre-ICO, the Pre-sale and the crowdsale will be locked. Unlocking will occur according to the following scheme:

 

Period

Pre-ICO

ICO

(Pre-sale)

ICO

(crowdsale)

November 2018

20%

20%

20%

January 2019

20%

20%

20%

March 2019

20%

20%

20%

April 2019

20%

20%

20%

May 2019

20%

20%

20%

The distribution of tokens is as follows:

All unsold tokens from the ICO will be sent to the System fund.

If the Soft cap is not reached during the ICO, all funds raised will be returned to the backers. In this case, funds raised during the Pre-ICO are not subject to refund.

No additional token emission is planned.

Description of the Services and Scope of the Project

The platform is designed to provide cloud storage services for decentralized applications (DApps). Casper API allows for integration with various blockchains that use smart contracts. In addition to DApps, the platform can also be used by ordinary users who want to keep their files encrypted in decentralized cloud storage.

Basic platform services:

  • File storage - allows users to store, download, edit and delete their files, as well as provide other members of the platform with access to them.

  • Backup storage - unlike file storage services which have a small size and can be frequently accessed, backup storage is aimed at saving large amounts of rarely accessed data.

  • CDN - distributed storage of website content, allowing for quick access to this content for end users.

At the time of writing the review, the project had released an MVP, which is available via web interface after registration. In order to save a file in the service, the user just needs to drag it to the browser window, to the page with the open MVP interface. Downloading and deleting a file are both available in the same place:


Casper API has the following features:

  • Each downloaded file is automatically encrypted and replicated to storage devices by at least 4 different providers. This provides fast and reliable access to user files. The encryption keys are stored by the user, which ensures that access by third parties to the files is prevented.
  • All interactions of platform participants are regulated by the smart contract:
    • The user's placement of the data storage order and the write-off of the monthly data storage fee.
    • The search and selection of the nearest suppliers based on geolocation and access speed.
    • Ensuring that each file is replicated to the storage devices of the above-mentioned number of suppliers (in case of loss of connection with one of the providers, the smart contract will connect another provider and upload the file to their hard disk automatically).
    • Purchase of quota by the supplier (storage provider).
    • Payment of remuneration to storage providers.
  • Transaction data is transferred to the smart contract in an encrypted form (using zk-SNARK algorithm), ensuring its confidentiality.
  • The transfer of files between users and suppliers occurs via a P2P network.

Casper API platform participants are:

  • Users are token holders who use the platform services listed above, paying for them in CST tokens. Prepayment of the tariff is made in CST at the rate of USD (prepayment in BTC, ETH and USD with conversion to CST is available). After the file is uploaded to the suppliers, the smart contract charges a storage fee on a monthly basis. In the event that the user deletes the file, the unused portion of the prepayment is returned to the user. The users can also transfer their CST tokens to other platform participants for a reward.

  • Service providers are platform members who provide their hardware resources on a paid basis to store user files from all blockchain platforms integrated into Casper API. Any token holder can become a supplier. He will need a personal computer with free space on the hard drive and round-the-clock access to the Internet. The provider acquires a quota, paying 1 CST for every 25.6 Gb of disk space it provides (1CST / 25.6Gb is the minimum quota, there is no upper limit). The provider’s revenue is made up of the amount of downloads by the platform participants (expressed in Gb) and by the storage of files which the provider stores on his hard disk (incoming traffic from the user to the provider is not paid).

The above capabilities of the Casper API platform are aimed at providing reliable data storage services with quick access to them. Both capabilities are embedded in the platform architecture. In addition, according to the White Paper, the cost of platform services differs favorably from existing cloud storage solutions.

Market Review

Market analysis

Data storage has long gone beyond the hard drive of the user's computer. Cloud storage is a way of storing data on the Internet, not in local arrays. It is purchased as a service and provided on demand, which allows customers to get the required amount of storage with payment after use. Cloud storage eliminates the need to buy and manage personal storage infrastructure. It increases flexibility, provides global scaling and the ability to deliver data to any place at any time.

Solutions based on advanced information technology enables companies to achieve success and gain competitive advantages over their competitors.

The introduction of cloud technologies allows the users to save money, putting the system into operation for a minimum period and to regulate the capacity of companies' services, as the consumer does not need to invest in the purchase of servers or software licenses when connecting to cloud services. The client does not bear any one-time payments at all. A monthly subscription fee is charged depending on the chosen tariff plan and the number of users of the service. The tariff is often very small.

On the Statista website, you can see the market share of the leading suppliers of cloud services for the second quarter of 2016.

According to the research of Markets & Markets, it is expected that the cloud storage market will grow from $30.70bn in 2017 to $88.91bn by 2022 with a CAGR of 23.7% during the projected period.

The growth of cloud storage in the Asia-Pacific (APAC) region is expected to be particularly strong.


 

Competitor analysis

Companies such as Amazon, Microsoft, IBM and Google have become leaders in the segment of providing cloud storage services. Along with ordinary users, the services these companies are offering are also being used by state and corporate clients.

The existing cloud storage systems are vulnerable because of their centralization which increases the likelihood of leakage and theft of information. Therefore, blockchain technologies began to be considered as a way to get rid of intermediaries, increase transparency and security between market participants, and reduce operating costs.

In recent years, there have been many projects that are developing decentralized storage platforms:

  • Filecoin - it works on blockchain with its own tokens, which miners can earn by providing a place for storing information to customers. It uses Proof-of-Storage, Proof-of-Replication and Proof-of-Spacetime algorithms.

The ICO of Filecoin has raised a record-high $252m.

  • Storj - a decentralized cloud storage platform with its own tokens, which allows all users to lease unused space on their hard drives and earn from it.

During the ICO, $29m was raised. At the time of writing, the capitalization of the STORJ token was $117m.

  • Bluzelle - a decentralized solution for DApps databases. The data storage system works similarly to torrents: small bits of data are stored worldwide in an encrypted form on different nodes and they are accessible through a high-speed process when requested.

During the ICO, $19.5m was raised. At the time of writing, the capitalization of the BLZ token was $70m.

In comparison to its competitors, Casper API has the following advantages:

  • The platform offers decentralized file storage services. The CST token will be the currency used on the platform for all transactions.
  • The platform aims to create an infrastructure for storing data on any blockchain platform.
  • According to the documentation, the cost of cloud storage services will be significantly lower than competitors’.
  • Any platform member can become a cloud storage service provider and earn from it.

We think that the demand for cloud storage among users and the advantages of the Casper platform allows the project to occupy its niche in the market.

Team

The project team consists of 26 people, including the founders and project advisors. Key positions occupy the following members:

Artem Koltsov (linkedin) Founder

The founder of the company. Head of the Expert Council on Digital Economy and Blockchain Technologies under the Russian Federation State Parliament Committee. The founder and CEO of the Russian Internet agency, Legion Digital.

Education:

Stanislav Kapulkin (linkedin) – CTO

Technical director of the company from July 2017. He is an experienced programmer. Has won various contests in the IT field, winner of the regional stage of Imagine Cup in 2015.

Education:

  • St. Petersburg State University of Information Technologies, Mechanics and Optics (ITMO University).

Vitaly Cheremenskiy (linkedin)CEO

CEO of Casper API. Member of the Expert Council on Digital Economy and Blockchain Technologies under the Russian Federation State Parliament Committee.

Education:

  • Saint Petersburg State University of Information Technologies, Mechanics and Optic.s.

Evgeniy Stratonikov (linkedin)GO Developer

Senior Software Engineer at Casper API.

Education:

  • St. Petersburg State University.

Nurlan Tlegenov (linkedin)CMO-Casper API

Director of Marketing of Casper API since July 2017. He has 6 years of experience in corporate business, he previously worked at the KaVo company. Member of the Expert Council on Digital Economy and Blockchain Technologies under the Russian Federation State Parliament Committee.

Education:

  •  St. Petersburg State University.

 

Advisors:

Yuriy Gugnin (linkedin) – the founder of Karma.red that collected $10m during the ICO. He has 16 years of experience in IT. Co-Founder of RIK, a digital business school (more than 1,000 graduates). He has a PhD in Economics.

David Kang (linkedin) CEO of Lexington Investment Group Inc since 2016. CEO of BitTalk since November 2017.

We would like to mention that even though the team was only formed recently, it includes a number of specialists with extensive experience in their fields. There is no long-term history of joint work between the team but a number of managers are members of the Expert Council on Digital Economy and Blockchain Technologies under the Russian Federation State Parliament Committee. According to the information posted on the company's website, the team also has a specialist responsible for listing and market making (Michael Portnoy).

Token Analysis

The project has a page on GitHub and the development is conducted in the Open Source mode. At the time of writing the review, there was no repository with the CST code. According to information from the founders, it will be published by the end of April.

During the Pre-ICO period, CSPT tokens were issued. These tokens will not be traded on exchanges. However, during the ICO period, the participants will be able to exchange CSPT for CST tokens of the ERC20 standard which do not have such limitations.

CST is a standard ERC20 Ethereum utility token intended for use on the Casper API platform as follows:

  • To purchase a quota for the amount of memory (1CST = 25.6Gb) - for token holders who decided to become storage providers.
  • Users will pay for the provider's services for storing/downloading data.
  • Platform participants will be able to rent/lease tokens, as well as sell and buy them on exchanges.
  • A platform fee is charged on each transaction, part of which will form a fund for the remuneration of network providers.
  • To reward network providers (available in both CST and fiat currency).

According to the documentation, CST tokens can be transferred in an equivalent amount to any other blockchain platform, provided that this platform is integrated into Casper API and uses smart contracts.

The platform is aimed at providing its services worldwide, which means not limiting its services to users and suppliers to just one geographic location. In our opinion, the use of the CST token is justified, as it will be a universal currency for the platform, being used in the Casper API ecosystem and all the platforms integrated into it.

Analysis of Factors Affecting the Future Price of the Token

Since the CST token is the internal currency of the Casper API platform and all transactions within the platform will occur in tokens, its cost will largely depend on the growth of the number of users and the Casper API’s penetration into the cloud storage market. Such factors as the increase in the scale of the network, the volume of storage facilities and their occupancy will directly affect the rate of CST.

Considering that the cost of the platform services will be tied to market prices in dollars, the token exchange value will ultimately be a derivative of the market value of services, in this field of activity. We think that this fact, as well as the fact that, according to the submitted financial model, the platform prices will be three times lower than market prices, can positively affect the exchange value of the token in the short term.

According to the roadmap, the MVP was launched in February 2018 before the ICO and the alpha version of the product will be released in November 2018. The beta version of the platform will be launched in the 4th quarter of 2018 and the global connection of suppliers will be conducted from the beginning of 2019. By this time, it is expected to the number of users will increase, which may result in the growth of the exchange value of tokens. The mechanism for acquiring a quota for the amount of data stored, which involves the activation of tokens by providers and blocking of tokens on accounts, will reduce the number of tokens in circulation.

The project will create a System Fund to support token liquidity. The starting size of the fund will be 8.1% of the total number of tokens. The fund will be replenished by unsold tokens from the ICO. The less tokens that are sold, the more tokens that will be sent to the fund. According to the project's forecasts, up to 65.6% of the issued tokens can be accumulated in the fund. The fund will be directed to:

  • Market making (maintaining the CST rate, to ensure the load of the Providers' capacities remains at the average level of 70%, and the payback of the CST within a period not exceeding 12 months).
  • Regulating the rate of CST tokens.

The number of tokens in the fund will be restored by buying CST on exchanges. The process of restoring the size of the fund will reduce the number of tokens in free circulation, which will lead to an increase in their exchange value. The project also provides for the reverse process of selling tokens from the fund to the market to stabilize the token exchange rate.

The project has developed a global marketing strategy, to which allocates:

  • 40% of funds raised in the Pre-ICO ($400,000).
  • Funds to the System Fund with its redundancy.
  • Up to 40% of platform revenue.

If the marketing strategy is successfully implemented, the number of participants in the platform will increase. As an additional mechanism for attracting users, the team provided grants from the System Fund to the selected DApps, who can later become users of the Casper API platform.

The project revenues will be formed at the expense of fees charged for the platform services. The documentation provides several scenarios for the platform development. All financial calculations are based on a fee of 15%, in the first year the fee is 10%.  The total revenue from fee income and the main items of expenditure during the first five years of the platform activity are given. The project is planning to cover up to 30% of the market share of decentralized storage and decentralized CDN by increasing the share of DApp in the IAAS market to 15% by the end of 2022. The project will become self-sufficient after three to four years of development. We note that in the process of collecting fees, the project will accumulate a certain number of CST tokens, which may affect the exchange value of tokens when they are sold to support current operations.

The project offers an additional source of income for holders of CST - CST Rent. Any platform user can take CST tokens for rent as a reward. The size of the reward will be formed by the market. This process can become one of the methods of retaining tokens by the participants for a long time in order to obtain additional income. However, the project does not describe the rental process in detail and therefore it is impossible to assess the effect from its use to the participants of the platform at the present time.

The project does not provide any bonuses for the ICO participants (except for the large investors in the Pre-sale stage). This step may lead to the fact that most of the short-term speculators will refuse to participate in the ICO, as they will be able to buy tokens on the exchange after the start of trading. However, due to the decision to abandon the bonuses, the token holding pool can be formed by the long-term investors who rely on the successful development of the platform.

Risks

We have identified a number of risks in the Casper API project:

 

The project would have increased the turnover of CST tokens much faster if it had involved legal entities, among which the popularity of using cloud storage is growing. As the DApps service market develops, banks will implement blockchain-based applications in their systems but due to the fact that there are difficulties in regulating the crypto market in different countries, the current use of tokens by legal entities can be difficult and sometimes impossible. According to the founders, in those countries where the use of cryptocurrency is limited, legal entities will make payments in fiat currency. The conversion to CST tokens will be carried out by the platform itself. Therefore, legal entities will not face exchange rate differences when using cryptocurrency. Nevertheless, we included this as part of the legal risks for the project.

In addition to blockchain-based competitors, there are giants such as Google, Amazon and many other services offering cloud storage services. These companies will introduce the latest technology and easily compete with any decentralized start-ups if necessary.

The project provides freezing for all of the tokens sold. Unlocking will occur from November 2018 to May 2019 (see the introductory chapter for more details).

Tokens will be frozen for settlements on crypto exchanges, but they will be active for settlements within the platform. On the one hand, such conditions create a risk for the success of the ICO, as speculators will refuse to participate in it due to a large gap between the ICO and the listing of tokens. On the other hand, a low level of participation by speculators in the ICO will not put pressure on the exchange value of CST tokens in the short term which will be more favorable for the project in the long term.

We also note that bonuses are provided only for large-scale participants. There are no bonuses for the participants with amounts less than $100,000, this limits the range of potential for small investors.

If the planned volume of the Token Sale is not fully realized during the ICO, all unsold tokens will be sent to the System Fund and the team will receive a fixed amount of CST, which will cause a distortion in the share of tokens sold and tokens owned by the project. There is a risk of future supply overhang with regard to tokens controlled by the project.

Despite the fact that the team consists of professionals with extensive experience in their fields, there are no highly specialized members in the field of project operates in.

 

 

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.