EdenChain Rating Review

Stable+

Investment Rating

Expire date : 29.08.2018


Based on the analysis performed and issues identified we assign Edenchain project a “Stable +“ rating. We draw attention to the fact that without existing MVP and having only technical whitepaper it is hard to fully assess the project’s potential.

We would like to note the following strengths of Edenchain project:

  • Ambitious and complex idea

  • Strong technical whitepaper

  • Significant IT/software experience of the team

  • Circa 80% of hardcap has been reached during presale rounds

  • Potentially strong competitive position and market exposure

  • Notable token economic potential

However, we draw attention to the following significant risks associated with this ICO:

Commercial risks. High competition in the market raises significant risks for Edenchain. Edenchains aims to cover various different markets (IoT, shared economy, tokenization, ICOs, finance) which means that they compete directly with projects like Ethereum, EOS, Stellar and ICON which are either released already or will be released shortly in 2018. Whether or not Edenchain will be able to differentiate from the rivals due to higher security, performance and lower barrier to blockchain technology adoption (as intended) will be clear when the alpha/beta platform will be released publicly. In addition to that the focus of Edenchain platform seems to be shifted on Korean market which is not very significant in terms of size of blockchain market. Once the alpha/beta versions of the platform are released, and competitive advantages are evident, this risk may decrease as Edenchain is currently undervalued as compared to its competitors.

Absence of MVP. As of the date of analysis (May 2018), despite having demo videos in their blog, the team has not yet released an MVP/alpha, which is expected to be released in Q2 2018 according to the project’s roadmap. Absence of MVP seriously jeopardizes the ability to assess the team competencies, capabilities of the suggested product, degree of product development and other crucial factors that investors in an ICO must consider before making any decision to invest. Once alpha of the platform is released, and the team progress is obvious this risk’s level of may go down.

Unclear ICO details which cannot be verified as of the date of the analysis. The team is not transparent on its website and in the project’s whitepaper on some important ICO terms. E.g., start and end dates are not specified, bonuses (if any) are not mentioned. The terms of presale stage A are not specified, as well (the team provides information on the size of bonuses only). Moreover, smart contract code on GitHub is unavailable for public review and important ICO terms (vesting periods, token distribution timelines, bonuses, token burning) cannot be verified. The team has informed us that Edenchain will be using an API that is developed in-house for token distribution. The use of APIs lowers cost of development and is aligned with Edenchain’s intention to use APIs to make blockchain technology easier for enterprises to adopt. Subsequently, ICOs conducted on Edenchain will also have access to the API used for conducting tokensale which will lower cost of conducting an ICO and reduce coding bugs in smart contracts which might expose millions of dollars to risk of theft.

Team composition and competence. The team has ambitious plans in terms of the product complexity (many products, strong security, infrastructural nature of the platform) and deadlines – they plan to release testnet by the end of 2018 and mainnet in Q1 2019. There are no team members that actually had practical experience in blockchain prior to Edenchain. However, we note that James Ahn has given lectures on blockchain technology and participated in publication of books covering blockchain. On the other hand, the team has extensive experience in IT area as a whole. Several team members are also involved in Byzantine partners – a blockchain advisory and investment fund which is listed as partner on Edenchain website. This may lead to potential segregation of duties and conflict of interest issues. However, the team tells us that a long-term arrangement has been put in place to ensure that the incentives for both parties are aligned, to reduce risk from potential conflict of interest.  Two team members responsible for marketing and one responsible for business development do not have evidence regarding their previous marketing/business development experience, have small network on LinkedIn and no recommendations or endorsements from the former colleagues. However, in the short span of three months, they have proven themselves to be more than competent helping EdenChain to grow from an under-the-radar project into one of the most well-known projects globally. A Some project advisors do not list Edenchain on their LinkedIn profile and some advisors do not have LinkedIn accounts.

Whitepaper is comprehensive on technical details, but needs more elaboration on the business side. The team does not publish a business whitepaper on Edenchain’s website, only technical whitepaper is available. Instead, most business details are published on their website.  Despite that, the following areas are not covered:

  • Absence of market / competitor analysis which is crucial as the competition is high;

  • Roadmap, team and advisor composition, ICO details are published on the website only;

  • Unclear token and project economics (e.g. fees are not specified, revenue streams, target markets, illustrative use cases, etc.)

  • Forecast marketing activities and plans for product promotion are not detailed enough to make analysis and relevant conclusions, while they are important for the market acquisition

  • Products listed in the roadmap (EdenExchange, wallets, ICO platform and some others) are not covered in technical whitepaper. The team informed us that these products will be covered in business paper.

Given that there is no actual MVP that is available for the public to test, other than two demo videos on the MVP, all of the above significantly increase risks for investors. The team members informed us that they are planning to release business paper in June 2018 after the ICO ends.

Based on the analysis performed and taking into consideration all risks associated with Edenchain project as of May 2018, we assign Edenchain project a “Stable +” rating. We draw attention to the fact that once the major issues resolved by the team (i.e. alpha/beta released, etc.) the rating needs to be reassessed.

Edenchain team is building a scalable and secure  blockchain platform for the purposes of global programmable economy. The team wants to build high-performance, secure on-off chain interoperability blockchain platform with low processing fees. The team envisions that the platform will be used for a wide range of purposes including but not limited to P2P finance, B2B, IoT, shared economy and others.

Website

Whitepaper (Technical)

Twitter

Telegram

Reddit

Facebook

Blog

Bounty

Bitcointalk

GitHub: None

We draw attention to the fact that the company does not maintain a public account on GitHub, which means that there is no publicly available smart contract code and project code for review by all interested parties. The team will use API developed in-house for token distribution.

 

Presale rounds A/B

ICO (public sale) round I/II

Start date

March 2018

24 May 2018, 0700 UTC

End date

May 2018

25 May 2018, 1900 UTC

Stage cap

No data

No data

Funding raised

circa 80% of hardcap (USD 19.2 million)

-

Token

EDN (ERC-20)

Token supply (for sale/total)

400,000,000 / 1,000,000,000

Soft cap

No data

Hard cap

USD 24,000,000

Token price

USD 0.06

USD 0.06

Bonus

20% / 10%

No bonuses

Minimum investment

USD 100,000 / 100 ETH

1 ETH/1 ETH

Maximum investment

Not specified

1 ETH/3 ETH

Currencies accepted

ETH, BTC, USD

Restricted list

United States, China, Iraq

KYC procedures

Yes

Country of legislation

British Virgin Islands

 

The team has also launched a pre-ICO bounty campaign in which they are offering the participants of Edenchain Ambassador Campaign 0.1% of the tokens (up to 1,000,000 EDN). Ambassador campaign has started on March 18, 2018 and has ended on 30 April 2018. Although bounty campaigns may have negative impact on the short-term / mid-term token price, we believe that 0.1% pool as not sufficient enough to influence the token price.

We draw attention to the fact that the team does not provide a business whitepaper, only technical paper is available which does not cover market outlook, competitive analysis, project’s and token’s economy. However, we acknowledge that most of the information can be found on their website or blog.

No private sale was conducted for Edenchain and Edenchain does not have equity investors.

We also draw attention that there is no contract code available publicly. The team will use API developed in-house for token distribution as the risk of unverifiable ICO terms remains as at the date of this analysis (May 2018).

Token distribution will start one day before exchange listing which is not really justified. 20% of tokens will be distributed monthly. This framework applies to the whole token sale (presale and crowdsale).

EDN will be supplied in the amount of 1,000,000,000 (one billion) tokens, but the company intends to sell only 40% of that – 400,000,000 (four hundred million) EDN tokens. The token distribution will be as follows:

The team does not specify vesting terms for team, founders, partners and advisors neither on the website nor in the whitepaper. The team informed us that vesting period for these stakeholders is 12 months and Edenchain reserves the discretion to determine how these tokens will be vested after the lock-up, with the key objective of implementing vesting terms that will anchor key personnel to continue growing and developing Edenchain in the long-term. We draw attention to the fact that vesting terms cannot be verified as long as there is no smart contract code available which increases risks for potential investors as of May 2018.

Given that the project roadmap states that the mainnet release is expected in Q1 2019, vesting terms for the team cover the most milestones on the roadmap. The hardcap of 24,000,000 USD is average for blockchain infrastructure projects currently.

The team does not disclose forecast use of proceeds from the ICO. According to the representation from the team, funds raised will be used prudently to accelerate adoption of Edenchain and to develop new technologies to ensure Edenchain’s continued relevance and the majority of proceeds will be used for the development of Edenchain platform and HelloEden to encourage adoption of Edenchain to enhance the vibrancy of Edenchain.

The team informed us that all unsold tokens will be burnt.

As stated in project’s technical paper, EdenChain is a programmable economy platform that provides high-performance processing speeds that addresses the technical issues of usual platforms such as Bitcoin and Ethereum – performance and scalability and absence of secured connectivity, is operated reliably, and is a blockchain technology capable of developing a variety of automated services based on smart contracts with reliable interoperability of external systems.

The team stated that target markets for Edenchain are global enterprises, including large MNEs to startups. Edenchain is a permissioned blockchain platform which was an improved version of Hyperledger Sawtooth created via a fork. Edenchain team optimized processing speed on Hyperledger Sawtooth increasing processing speed up to 1000TPS. They have also made it easier to adopt blockchain platform through the use of RESTful APIs. Most developers already have expertise using APIs, hence an enterprise does not need to invest heavily in an in-house team of blockchain developers to adopt Edenchain.

EdenChain is a permissioned blockchain consisting of three layers: a distributed ledger layer, a validation layer, and a bridge layer. The distributed ledger layer is a place at which data used in the blockchain are separately stored, and only data of transactions agreed to in the validation layer are processed. Distributed ledger data can be added through transactions. The validation layer is where a transaction is executed and verified, and includes an EVM to run a smart contract. The validation layer has a transaction scheduling function, which has a significant impact on the performance and scalability of EdenChain. The bridge layer is used to securely import data needed by an on-chain smart contract within the blockchain in cooperation with an off-chain. In the bridge layer, nodes naturally exist on-chain and offchain, and an E-Protocol using ECC-TC, which is an encryption technique, is used for reliable communication between these nodes.

EdenChain is configured with a permissioned blockchain to run smart contracts quickly and efficiently in a trusted environment.

Distributed Ledger Layer

The distributed ledger layer provides decentralized database functionality to EdenChain and is used on the basis of the Linux Foundation's open source project, Hyperledger. The DLL stores all data generated by the EdenChain in a block. The data cannot be modified and can be only added. The DLL stores the data on a disk device and assumes that all of the stored data originated from a legitimate transaction. The DLL can find the necessary data from the outside by using a block ID or a transaction ID, and also provides a function of accessing information about all transactions included in the block. The DLL has a BlockCache module to minimize disk access. BlockCache mainly stores currently used blocks in a memory, and when a requested block cannot be found, it reads the block from a disk and loads it into the memory. Depending on a frequency of use, it is possible to determine blocks that should be kept in the memory and those that should not, and thus a cache effect with optimal use of memory can be obtained.

Validation Layer

Layer that executes, processes, and verifies transactions, providing important functions for smart contracts and strength of EdenChain. In order to update the data in EdenChain's distributed ledger, transactions must be used. EL provides a TEE (Trusted Execution Environment) to provide an environment in which the transaction can be safely protected from data extortion or data forgery by hacker attacks. All transactions and key logic including smart contracts are executed in the TEE. The EL has Transaction Execution Scheduling (TES), which specifies how transactions are to be executed and on which node. TES is an important technical factor that affects performance and can show different processing performance with the same computing resources depending on how transactions to be processed are managed and executed. TES includes an Ethereum EVM to run smart contracts written in Solidity. If a transaction being executed is a smart contract running on Ethereum such as Solidity, the EL executes the EVM.

Bridge Layer

BL is an important technical element that differentiates EdenChain from other blockchains and guarantees zero-knowledge trusted connectivity between on-chain and off-chain. In Ethereum, smart contracts can be interworked with external systems using Oracle, but this does not guarantee trustworthiness of data from external sources. To realize a smart contract-based programmable economy, it is necessary to secure trusted connectivity that enables the blockchain and external systems to securely interwork against hacker threats. Once trusted connectivity is secured, it is possible to expand functions by interworking with external systems and to automate various services. The BL is composed of 1) an on-chain module for interworking with a smart contract, 2) an offchain module for interworking with an external system, and 3) modules for interworking and networking between the on-chain and off-chain modules. The on-chain module serves as a gateway for responding to external data requests required by smart contracts. The off-chain module fetches data requested by on-chain module by accessing the actual external system, verifies the data, selects a specific value, and transmits it to the on-chain module. Since the on-chain and off-chain modules are located in different networks, they configure a network on which they can securely exchange data against hacker’s attacks and communicate.

An e-bridge is a core technology of the BL and connects EdenChain with an external system, i.e, an on-chain and off-chain software Bridge. Data moving within a blockchain can secure security by using technologies such as a consensus algorithm and encrypted messaging. However, in case of an external system, the data cannot secure security because it can be attacked by hackers in various places. Therefore, when the on-chain module and the off-chain module are interworked, it is necessary to trust the external system and also the fact that the data transmitted from the external system is securely transmitted without any threat when it is linked with the on-chain module. A trust problem of an off-chain data source can be resolved if the external system is providing public services and has a reputation. A trust problem that can occur in the off-chain module when interworking with an external system can be largely classified into three issues – data source reliability, reliable data transfer from the source, reliable data transfer from the off-chain module to the on-chain module. E-Bridge is a technology that solves these technical problems and provides trusted connectivity between the on-chain module and the off-chain module. E-Bridge is designed in such a way that there are software modules such as an Oracle server and enclave located off-chain that are not in the blockchain, and an executor located on-chain and an Oracle client interwork together to secured connectivity. E-Bridge consists of an executor that executes transactions, an E-Oracle client forwarding external data access requests from the smart contract, an E-Oracle server processing requests from clients, and an SGX Enclave, a TEE running E-Oracle Server programs. Executor and E-Oracle Client are located on-chain. E-Oracle Server and SGX Enclave are in offchain, so E-Protocol is used for secured connectivity to connect On-chain and Off-chain module within the E-Bridge.

The executor is equipped with an EVM and is responsible for running a smart contract. The executor runs in an isolated environment to secure security, and updates to the smart contract are not directly recorded on a DLT. Only data verified through a validator is allowed to access the DLT. EdenChain is designed to run and validate smart contracts on each executor node by running executor nodes.

E-Oracle is a software module that provides functions for smart contracts to access external data. It consists of an E-Oracle client and an E-Oracle server. When the E-Oracle client requests external data, the E-Oracle server collects the data and sends it to the E-Oracle client. Since the E-Oracle client must be able to be called from a smart contract, the E-Oracle client is loaded and used in the smart contract. The E-Oracle client uses an E-protocol to request data required for the E-Oracle server. E-Oracle consists of several nodes and provides data verification method between these nodes and a consensus algorithm for final data selection.

The E-Oracle client is a special form of smart contract in which smart contracts provide external data access functionality. When the E-Oracle client requests external data access, the E-Oracle client passes parameters required for execution to the E-Oracle server, receives external data collected by the EOracle server, and delivers it to the smart contract. The E-Oracle client acts as a gateway between the smart contract and the E-Oracle server.

The E-Oracle server provides the actual functionality required to access the data requested by the E-Oracle client from the outside. An important feature of E-Oracle server is that it can execute external data access requests from E-Oracle client, collect external data, select appropriate values, and forward the values to the E-Oracle client. To enhance security, the E-Oracle server does not run an external data access related code within the E-Oracle server itself, but runs the code in a separate space called an SGX enclave (Intel's Software Guard Extension (SGX) enclave, which runs programs in a trusted environment to ensure security). The E-Oracle server consists of N-nodes, and any external data is designed to fetch multiple pieces of data. If data from one E-Oracle server is imported, multiple E-Oracle servers may be run because data reliability or systemic problems may prevent proper importing of the data.

More in-depth technical explanations and justifications of the Eden platform may be found in the project’s technical paper available on Edenchain website. However, we draw attention to the fact that technical paper does not cover the functional of EdenExchange, Eden wallet and ICO platform which is important for better understanding of how the project is supposed to work. Technical paper lacks description of roles within the platform and description of project’s economy, although a brief overview of the ecosystem is shown on the website. Absence of detailed information is a potential risk for investors.

In addition to the above, we draw attention to the fact that project’s technical whitepaper is not comprehensive enough in some areas. We believe that the whitepaper has the following problems:

  • Absence of market / competitor analysis which is crucial as the competition is high;

  • Roadmap, team and advisor composition, ICO details are published on the website only;

  • Unclear token and project economics (e.g. fees are not specified, revenue streams, target markets, illustrative use cases, etc.)

  • Forecast marketing activities and plans for product promotion are not detailed enough to make analysis and relevant conclusions, while they are important for the market acquisition

  • Products listed in the roadmap (EdenExchange, wallets, ICO platform and some others) are not covered in technical whitepaper. The team informed us that these products will be covered in business paper.

Given that there is no actual MVP that is available for the public to test, other than two demo videos on the MVP, all of the above significantly increase risks for investors. The team members informed us that they are planning to release business paper in June 2018 after the ICO ends.

The team provides the following project roadmap:

We draw attention to the fact that as of the date of analysis (May 2018) the only MVPs available are the demonstration videos of E-Explorer and E-Edge. Project roadmap says that alpha versions of Edenchain wallet, Edenchain platform are to be released in Q2 2018. While the presence of demo is better than nothing, there is a certain degree of probability that the testnet will be released after the public sale, thus increasing risks for potential investors.

The team has clarified some milestones in the roadmap for us:

Alliance program refers to engagement with enterprises in both public and private sectors. After the ICO, Edenchain’s team will be focusing our efforts on forming partnerships with even more enterprises to adopt the Edenchain platform.

Financial investment consortium Is a VC fund that will invest and partner with companies that are looking to use Edenchain platform in a variety of ways. These companies would increase the vibrancy of the Edenchain ecosystem.

Partnership with major blockchain network: This refers to partnerships with other major blockchain networks such as Tomochain. Contrary to the widespread belief that different blockchains are competitors of each other, Edenchain believes that blockchain adoption can be accelerated through cooperation.

CleanDeal Service and Real Service PoC refers to two of Edenchain’s partners – Cleandeal and MyCreditChain who will be testing Edenchain’s testnet by building their actual services on the testnet. This ensures that when mainnet is launched, the platform is ready for enterprise users and would give them a smooth experience in blockchain technology.

Edenchain API service: Edenchain uses APIs which makes it significantly easier to for developers to use blockchain technology. HelloEden is a turnkey solution for smaller/medium companies to adopt blockchain. The high cost of development and scarcity of blockchain developers is a huge constrain for enterprises looking to adopt blockchain technology.

The project’s roadmap is up to Q1 2019 when the mainnet is expected to be launched, thus covering less than a year. At the same time, the project is complex and the application opportunities are vast in case of success and the team could have provided more details in their roadmap covering development progress and expected activities after the launch of the mainnet in Q1 2019, especially given that the vesting period for team, founders and advisors is 12 months since the ICO date according to representation from the team.

Market analysis

According to Marketsandmarkets forecast, world’s blockchain technology market is expected to reach USD 885.4 million in 2019. Korean blockchain technology market according to KIST market survey is expected to reach USD 79.4 million in 2019.

Given that the blockchain technology market includes all possible blockchain platforms and not only infrastructure platforms like Ethereum, EOS and Edenchain.

For the purposes of analysis of macro factors affecting Edenchain project modified PESTEL framework will be used. PESTEL framework analyzes Political, Economic, Social, Technological, Environmental and Legal factors. As far as blockchain projects are concerned, Environmental and Social factors are usually not applicable or have relatively small impact.

Political – South Korea is one of the most blockchain-friendly counties in the world and has transparent developed economy with clear tax policy and economic laws. World’s developed countries can also be considered blockchain-friendly when it comes to actual blockchain implementation.

Economic – South Korea has low inflation, low interest rates, developed industrial economy with developed technological cluster. It is the world’s 14th economy by GDP (PPP). Most developed economies of the world have similar macroeconomic conditions.

Technological factors – South Korea is one of leading technological countries in the world, especially when it comes to high-tech industry.

Legal – Edenchain as an infrastructure blockchain platform has little potential issues when it comes to legal considerations. However, when it comes to EdenExchange and HelloEden ICO platform there are legal issues regarding government position regarding ICOs and cryptoexchanges in all major countries of the world.

Competitive landscape

We will use Porter’s Five Forces framework to perform initial competition assessment for Edenchain project.

Threat of new entrants

Threat of new entrants is medium mainly due to the fact that so far history of blockchain infrastructure platform market shows that if new entrants to the market may differentiate from the competition in any significant aspect, then the competitors can coexist. Examples include EOS (high performance, no transaction fees), Stellar (focus on bank system and security), ICON (focus on interoperability).

Threat of substitutes

Threat of substitutes is high as the blockchain technology is new and the market is immature. Changes happen rapidly in the industry and are unpredictable. However, this threat is fair for all existing market players.

Bargaining power of customers

The team states security, high performance and low fees as core priorities for their product and if they succeed in achieving all these targets, potential substitutes may or may not meet the benchmarks set by Edenchain platform. If the platform is developed is intended and required security, performance and low-fee structure are met, customers may not wish to switch to a substitute product. Since potential benefits of using blockchain technology in Edenchain’s target market niches is high, the price sensitivity of customers may be assessed as medium-to-low.

Bargaining power of suppliers

Since there are only labor (developers) and expertise (and maybe node holders) on a supply side for Edenchain project and taking into consideration the youth of the market, bargaining power of suppliers can be assessed as relatively low.

Industry rivalry

As of May 2018 Edenchain has plenty of competitors especially due to the fact that the team is aiming to solve a lot of problems and target various markets at the same time, but the most notable competitors are Ethereum, EOS, Stellar and ICON.

 

Edenchain

Ethereum

EOS

Stellar

ICON

Project type

Blockchain infrastructure

Blockchain infrastructure

Blockchain infrastructure

Blockchain infrastructure

Cross-ledger architecture

Key functions / features

Security, high performance, low fees

De-facto industry standard in terms of smart contract ecosystem

High performance, no transaction fees

Secure transactions

Interoperability with multiple blockchains

Key users

Enterprises, developers, users

Enterprises, developers, users

Enterprises, developers

Banks, developers

Enterprises, developers

Key products

ICO platform, wallet,smart contract platform,  exchange, infrastructure platform, dApps platform, ICO advisory

ICO platform, smart contract platform, infrastructure platform, dApps platform

Smart contract platform, infrastructure platform, dApps platform

Blockchain platform, smart contract platform, ICO platform, integrated exchange

Blockchain platform, wallet, ICOs are possible but not a main purpose

Development stage

MVP demo (video) released

Released

Prerelease (EOS.IO Dawn 3.0)

Released

Mainnet and wallet released, ongoing development

ICO status

Presale roundended

Ended

Ongoing

n/a

Ended

Capitalization

(as of ICO date/hardcap)

USD 19.2 million / USD 24 million

18.4 USD million / n/a

n/a / n/a

n/a

~28.4 USD million/ 43.9 USD million

Market capitalization

n/a

USD 68.3 billion

USD 13.6 billion

USD 6.8 billion

USD 1.6 billion

Product launch

Q1 2019

n/a

June 2018 (EOS.IO)

n/a

n/a

 

As of May 2018, the market for Edenchain is very competitive. However, success of competitors and their coexistence shows that a new entrant may find its place on the market if it succeeds in distinguishing from the rivals in any way. For Edenchain it appears to come from the provision of secure on-off chain interoperability and high performance which they state as the main system feature. We also note that Edenchain processes 100% of transactions reliably on a first in, first out basis and efficiently uses computing resources through the energy-efficient Proof of Elapsed Time consensus mechanism developed by Intel.  We also draw attention to the fact that Edenchain has RESTful APIs and an enterprise looking to adopt blockchain technology can interact with the smart contracts based on the APIs alone, without needing any knowledge of Solidity or other smart contract languages. We draw attention to the fact that if Edenchain for some reason fails to deliver proven better security and performance as compared to peers, it may face heavy competition from the projects which are already released.

We have discussed the competitive landscape with the team and the team provided the following justification on how Edenchain will differentiate from competitors like EOS and ICON:

Edenchain is a permissioned blockchain technology. A permissioned blockchain is a hybrid between public and private blockchain. Edenchain leverages on the strength of both structures to create a balance that is optimized for enterprise users. This gives enterprise user’s privacy, customizability, scalability, security and low reliable costs. Most of these features are not offered by EOS or ICON. Edenchain uses the namespace technology to process transactions in parallel on a first in first out basis, ensuring that 100% of transactions are processed. Edenchain can have up to 2^16 namespaces, which mean that as a network, Edenchain can potentially process up to 65,536,000 TPS as a network. Edenchain namespace technology is conceptually similar to sharding.

As compared to ICON, Edenchain is significantly different. ICON is a public blockchain ledger. All data is stored publicly and it uses a different technology to allow it to scale up to 9,000 TPS as a network. EOS is slightly similar to Edenchain that it is a permissioned blockchain network. However, EOS uses DPoS as their consensus algorithm and relies on 21 block producers to serve the entire network. Edenchain uses PoET which was developed by Intel and used in Hyperledger which has an enterprise community of more than 200 companies. The number of nodes serving each namespace can be customized based on the needs of the enterprise, and Edenchain estimates that they will eventually have thousands of nodes. Edenchain focuses on serving enterprise users by ensuring that there is interoperable secure connectivity between on-off chain communications which most enterprise users will require, whereas secure connectivity is a less discussed feature on EOS. Additionally, while EOS is still in a proof-of-concept testing stage, Edenchain platform, which is an improved fork of Hyperledger Sawtooth, has already been proven conceptually and ready to be used by enterprises. This puts Edenchain ahead of EOS in terms of development. EOS also has an inflationary mechanism which is needed to continue incentivizing block producers to operate and the token supply is expected to grow by 5% per year. Edenchain however, has a hyperdeflationary model because a portion of tokens used as transaction fees will be burned.

We note that Edenchain may be undervalued as the competitors are all capitalized significantly higher than their ICO value and all currently valued above USD 1 billion.

Creation of interoperable blockchain platform with high security and high performance requires significant effort and competency from the team behind it.

We draw attention that Edenchain team lacks practical blockchain expertise. This is partially offset by a number of advisors which have blockchain expertise, but that is not enough to fully cover the need for blockchain expert within the team. We also note that James Ahn has given lectures on blockchain and participated in blockchain book publishing giving technical inputs. Edenchain team also responded that core developers have over 50 years of experience in high technology development in fields such as machine learning, big data, cloud computing, and building pioneering technology to bring about tangible improvements in security and efficiency of government organizations and large enterprises. They have proven their versatility in adapting to new technology and more importantly, combining new technology with existing technology to create products that can be used by enterprises.

We draw attention to the fact that the capability of the team to deliver such a complex project will be easier to assess once the testnet is released. Without the actual product it is hard to assess whether the product is truly secure and high-performing.

We also draw attention to the fact that several team members do not have many LinkedIn connections, endorsements and recommendations. This may matter less for developers, but for the marketing specialists having a strong network and proof of competence is crucial to be successful. Nevertheless, Edenchain team informed us that they spent nothing on marketing campaigns and all growth of Edenchain community to date may be considered as a proof of expertise of the marketing team.

We draw attention to the fact that several team members and founders are holding positions at Byzantine Partners – blockchain investment company. This fact may raise segregation of duties issues and conflict of interests. Edenchain representatives informed us that their arrangements with Byzantine Partners are such that both parties are incentivized to ensure the long-term success of both parties, and that they have a signed MoU for long-term cooperation.

James Ahn

Founder & CEO

James has a master's degree in software from Korea University and KAIST with 20 years of experience in the field of IT. He worked as CTO at CyberRenassance Inc. (Japan) and later as a representative of MHR and DeepNumbers. Edenchain website says that he served as a consultant to the NIA Platform, a technical advisor to the National Computing & Information Service, and an advisor to Cloud for the Korean Agency for Technology and Standards. LinkedIn profile does not show the latter experience of James.

Jenny Ryoo

Co-founder and blockchain developer

Jenny has 10 years of experience in the field of IT. She has performed customer analytics studies to analyze and predict users' behavior patterns by analyzing web user logs of the National IT Industry Promotion Agency. She has conducted research on smart grid technology for Green Office of the Korea Institute of Energy Technology Evaluation and Planning. She studied systems for real time big data processing for the National IT Industry Promotion Agency. She also participated in the development of the big data analysis system of the National Assembly Library and developed data abstraction, interface and a module for basic statistical analysis. She graduated from Korea University. We draw attention that she does not have actual blockchain experience and does not have endorsements on LinkedIn.

Hokyun Kim

Blockchain developer

Hokyun graduated from Korea University and has 18 years' experience in the field of IT. He was the first in the world to develop Saw & PinckandPlace - the full auto system that performs 3-step manual process, Sawing -> Cleaning -> vision inspection sorting in the final stage of CSP mass-produce, in one process, was certified as the world's leading product by the Ministry of Commerce, Industry and Energy. He developed SK Telecom's WAP Mail Gateway which provides standardized APIs on 7 portals. He has developed signal detection and decoding systems and signal processing algorithms.

Hokyun graduated from Korea university.

We draw attention to the fact that Hokyun does not have blockchain experience and there is no information of Saw & Pinckandplace on the internet. Hokyun has only 30 connections on LinkedIn and does not have any endorsements and recommendations.

Brian Park

Blockchain developer

Brian graduated from Hanyang University and has 15 years of experience in the field of IT. According to Edenchain website, he built a business-dedicated virtual workspace based on the Sandbox virtualization technology of domestic mobile carriers (SK Telecom, KT). At SK Telecom, he developed the Direct Push technology for interworking with Mobile Outlook based on Windows Mobile, and carried out a project for developing the system for analyzing quality of experience of WCDMA video call serviced by SK Telecom (Video Call Analyzer Tester). He also participated in the development of software-based power saving technology applicable to a cloud environment for the Korea Institute of Energy Technology Evaluation and Planning.

We draw attention to the fact that Brian has no blockchain experience, has only 30 connections on LinkedIn and no recommendations or endorsements.

Kangho Kim

Chief Strategy Officer

Kangho has been in financial market for 10 years as a derivatives trader, an analyst and a portfolio manager at reputable global investment firms. At Franklin Templeton, he has performed a role of portfolio manager over 6 years, managing more than US $1.6 billion funds for fixed income, derivatives and alternative assets. His skill set is not only expanded to the financial market but to IT industry by having founded a social network mobile application as a CEO and applied Blockchain technology to his service. He is also a member of the Society of Blockchain Developers in Korea. Kangho also has a Master of Science in Global Finance from New York University’s Stern Business School and HKUST Business School, and a Bachelor of Economics from Korea University in Seoul.

We draw attention to the fact that Kangho also holds position of a Partner at Byzantine Partners – blockchain investment company which is listed as a partner of Edenchain project. The above may raise potential conflict of interest and segregation of duties issue for Kangho.

Hj Moon

 

Chief of business development, Asia

HJ has built his career as research analyst in top global investment firms such as Goldman Sachs and Barclays, covering major industries and companies in Korea. His depth of knowledge and analysis is well regarded amongst institutional clients during his research analyst tenure as he received multiple votes from institutions and hedge funds. He graduated with a Bachelor of Economics from Korea University in Seoul.

We draw attention to the fact that Hj also holds position of a Head of Research at Byzantine Partners – blockchain investment company which is listed as a partner of Edenchain project. The above may raise potential conflict of interest and segregation of duties issue for Kangho. He does not have business development experience and has 12 connections on LinkedIn and no endorsements and recommendations.

Richard Jahnke

Business Development, US and Europe (San Francisco)

Silicon Valley-based Venture Capitalist and brings with him more than 16 years of professional investment management, research and deal experience across the broad Technology sector. Currently, Richard is an Investor with Columbus Nova Technology Partners (CNTP), a global, multi-stage, technology investment firm operating out of Silicon Valley and New York City. Prior to CNTP, Richard was a Venture Partner with Flatiron Investors, a New York-based early-stage venture capital firm. And, before that, he was a Sr. Investment Analyst focused on Technology-related investments with The Olayan Group. Richard earned a MS in Global Finance from New York University's Stern School of Business, a MBA in Finance and Entrepreneurship from the University of Illinois, and a BS from the University of Michigan.

We draw attention to the fact that Richard states that he is an Advisor to Edenchain and not a Business Development manager.

Kathy Roe

Marketing

Graduated University of Portland with a Marketing Degree. Has experiences in various corporations and is currently in charge of Marketing and PR of the new leading blockchain firm EdenChain.

We draw attention to the fact that Kathy’s LinkedIn profile does not have information regarding her previous job experiences in marketing. She has only 48 connections on LinkedIn and no endorsements and recommendations.

Jessica Park

Marketing

Graduated Dongguk University with a Master's degree and started the first career with EdenChain. Has an experience as an editor of press, and had an interest in IT which lead to joining EdenChain.

We draw attention to the fact that Kathy’s LinkedIn profile does not have information regarding her previous job experiences in marketing. She has only 30 connections on LinkedIn and no endorsements and recommendations.

Aaron Tay

Financial advisor (Singapore)

Aaron started his career with the MAS, Singapore's Central Bank and financial regulatory authority after graduating from Singapore Management University. He traded a variety of financial instruments at the MAS, managing part of the central bank's foreign reserves. He subsequently joined Tikehau Capital, a listed European asset manager with US$16bn in AUM. Based in Singapore, he was responsible for the sourcing and execution of Asian private equity and venture opportunities across multiple sectors. More recently, he was closely involved in the launch of a venture capital fund.

Aaron graduated from Singapore Management University.

We draw attention to the fact that Aaron also holds position of a Co-Founder at Byzantine Partners – blockchain investment company which is listed as a partner of Edenchain project.

 

Kwangho Lee

Technical Advisor

According to Edenchain website, Kwangho graduated from Korea University and built his career in LG group with numerous key projects in group companies. As a system engineer, he led the IT consulting and system establishment projects in Data warehouse and Business Intelligence area (LG Electronics, LG Card, Korea Railroad Corporation etc.). In LG CNS, he developed and executed assessment center program for Big Data team and was a judge of “Idea Farm”, which is an in-house new business idea bank. Also, he was in charge of reviewing ideas and prototyping of new business items in “LG Innovator” project. He conducted new business development and staff training in ICBM (IoT, Cloud, Big Data, Mobile) division.

We draw attention to the fact that Kwangho does not have LinkedIn profile link on Edenchain’s website, so his previous expertise and affiliation with Edenchain cannot be confirmed.

 

Key project advisors

Don Chang

 

Advisor

Received Bachelor's Degree from Seoul National University in Nuclear Engineering, Master's Degree from University of Southern California in Computer Engineering, and Ph.D. from aSSIST (Seoul School of Integrated Sciences & Technologies). Currently working as a PM in Big Data of National Defense and Science Institute. Work experience in U.S.A., worked in Oracle Corp, Visa Inc., EDS, American Airline. , in Korea, work experience in Oracle Korea Consulting Executive, Sibel Korea Regional Manager, SAS Korea Vice President, Deloitte Korea Consulting Partner Director of HQ, Ernst and Young Consulting Director of HQ.

Joongheon Kim

Advisor

Joongheon Kim is a professor at Chung-Ang University, School of Software (formerly, School of Computer Science and Engineering), and currently a director of Chung-Ang University Distributed Platforms and Security Lab. He has received Ph.D. in Computer Science from University of Southern California (USC).

Sungho Kim

Advisor

Sungho have worked in the fields of supercomputing and supercomputer development for many years. Received Bachelor's Degree, Master's Degree, and Ph.D. from KAIST(Korea Advanced Institute of Science and Technology Constitution) KISTI(Korea Institute of Science and Technology Information).

 

Alan Moonsoo Kim

Advisor

Alan is head professor of digital strategic planning and MBA at the aSSIST Graduate School of Business Administration and the founder of BeNative, a global education service. His main research areas are the mechanism and management strategy of artificial intelligence and blockchain. BeNative has partner companies and clients such as NetEase in China, Hitachi Group in Japan and Taiwan Mobile. ETOOS, which he established in 2000, was selected as a Korean rapid growth company by Deloitte and successfully sold to SK Group. He graduated from the Seoul National University College of Engineering, CKGSB EMBA in China, and completed doctorial course at the aSSIST Graduate School of Business Administration. He is also currently a CEO and founder of BeCrypto.

 

James Jahnke

Advisor

According to Edenchain website, James Jahnke brings has nearly 20 years of professional development experience and strong domain knowledge of technology, financial markets and computational finance. James is currently a Director & Sr. Developer at Chicago Trading Company (CTC), one of the world's leading proprietary trading firms and active market maker on numerous derivatives exchanges globally. In his current role, James is focused on front-office development, supporting the company's next-generation electronic trading systems and software solutions/tools to enhance and improve overall infrastructure performance, efficiency, and usability. Jim did his undergraduate studies in Computer Science at the University of Michigan and earned a Masters degree in Global Finance from New York University's Stern School of Business.

We draw attention to the fact that James does not disclose his advisory to Edenchain project on his LinkedIn profile as well as he does not disclose that he is a Director at CTC.

 

Mina Jeong

Advisor

According to Edenchain website, Mina is a founder, CEO and managing director of M&K PR, one of the leading PR firm in Korea. With Mina's leadership, M&K PR has grown from a small IT PR firm into the largest technology communications agency in Korea. Also, she guided the company to earn the reputation as a pioneer in digital communications. Over the decade, Mina has served as a senior consultant to global leading companies in IT industry such as Oracle, Citrix, Dassault Systemes, FireEye and Intel. Mina graduated from Ewha Women's University and majored in PR and Advertising.

We draw attention to the fact that Mina does not disclose that she has experience at Oracle, Citrix, Intel, Dassault Systems and FireEye.

 

 

Marat Zhanispayev

 

Advisor

Marat is Owner of ADV Kazakhstan and Co-Owner of ADV marketing Kazakhstan. ADV Group is one of the leading marketing communication groups in CIS region. Currently the Group unites 6 advertising agencies. ADV Kazakhstan especially has the business operations in Kazakhstan and Central Asia and representing Interpublic Group and Havas international communication networks. He is a co-founder at Spatium.

We draw attention to the fact that Marat does not disclose his advisory to Edenchain project on his LinkedIn profile.

Young Choe

Advisor

Young Choe is a co-founder and CTO of Pax Datatech, which develops Paxchain - a blockchain 3.0 platform - to create a new economic paradigm through dApps powered by auto-smart contracts. He is a software professional having broad experiences from development to top management, from theories to practices & businesses at various global companies and organizations including NVIDIA, BMC Software, Samsung Electronics, SK Hynix, 3Ksoftware, North Carolina State University, Sungkyunkwan University, Yonsei University, CE Linux Forum, Korea Embedded Software & Systems Industry Association, and Open Source Software Foundation..

Mirza Uddin

Advisor

Mirza is a venture capitalist who focuses on a wide array of early-stage technologies. He has previously worked at Two Sigma, one of the largest quantitative hedge funds. While at Two Sigma he was heavily involved in researching Blockchain startups and analyzed hundreds of investment opportunities in the sector. He has also worked for Index Ventures, a global multistage VC that has previously invested in companies such as Dropbox and Facebook. Prior to that, he worked for The Boston Consulting Group, where he helped advise one of the largest Fortune 500 tech conglomerates. He began his career at East Ventures, a prominent Japanese VC that was an early investor in OmiseGo. Mirza attended Harvard University, where he simultaneously enrolled in several courses at both MIT and Harvard Law School.

He is also advisor to OneLedger and NOIA.

 

The advisors of the project are mainly focused on technology and there are some advisors covering marketing and strategy.

We draw attention to the fact that some advisors do not mention their affiliation with Edenchain project and that some advisors listed on Edenchain site -  IckChan Joo, Yoonsang Cho (legal), Hyung Guel Kim do not have LinkedIn profile links on Edenchain’s website and their affiliation to Edenchain cannot be confirmed. According to representation from the team, Linkedin is not a commonly used platform in Korea, hence these advisors do not have linkedin profiles. These advisors have been actively contributing to Edenchain’s development in Korea, helping to build business connections with Korean companies and advising on legal matters in Korea.

We also draw attention to the fact that Edenchain lists Benn Godenzi (Interoperability Alliance, advisor and affiliate to ICON, Stack, Wanchain, AION) as their advisor. Benn does not disclose his affiliation with Edenchain on his LinkedIn profile. Edenchain team informed us that they have sent our advisors a reminder to list their advisory role with Edenchain on their LinkedIn profile and it is quite likely that amid their busy schedules, they had not updated their profiles.

Wa also draw attention to the fact that Edenchain states partners namely Byzantine Partners, Finger, Fintech, MoneyTag, LendingScience, Lotusport, BeNative, Microsoft, M&K PR, YT, Block Media and Across Asia Alliance. The team discloses the nature of their relationship to the above companies on their website (you may click on the logos to find out more about the nature of the partnerships.

The supply of EDN token is fixed at 1,000,000,000 tokens. Any EDN tokens unsold during the ICO will be burnt.

EDN is a utility token. As stated on Edenchain’s website, node participants will require holding a certain amount of EDN (i.e. masternodes). Service providers will also require EDN to provide blockchain services (B2B, B2C, C2C). Consumers will also require EDN to use the services of the service providers. The team provided the following description of token economics for us:

  • Service Deposit for users: These are typically the enterprises who are building platforms which operates on Edenchain. A portion of tokens must be locked up to lower the risk of malicious users attempting to hog namespaces.

  • Transaction fees: Incurred for every transaction on Edenchain. Purpose is to compensate node operators for their services.

  • Exchange fees: For users who choose to issue their own native tokens on Edenchain platform, they will have access to Eden Exchange, creating a liquid market for their tokens to trade. Exchange trading fees will be charged in EDNs.

  • ICOs: For ICOs conducted on Edenchain, the funds raised will be in EDNs.

  • Masternodes: More details on the masternode will be announced in 3Q2018. Masternodes must lock up a certain number of tokens.

The application of EDN token is justified by security considerations and risk management, otherwise it could be substituted by any other coin.

Edenchain introduces a hyperdeflation model to preserve the value of coins. Initially, tokens will continue to increase from 400 million through token sales, but starting in 2020, annual coins will be burned at transaction rates of a certain percentage, resulting in a gradual decline in circulation and coin volume. As the EdenChain ecosystem is activated, demand is supposed to steadily increase, but the supply will gradually decrease, so token price can rise according to the principle of supply and demand.

We identified the following key factors that may affect the token price:

Factor

Description

Price effect

Development and release of new products according to the roadmap

Edenchain ICO is expected to take place in Q2 2018 and alpha may be released before or after that. Beta, wallet, exchange and service are expected to be released in Q3 2018. Testnet, mobile wallet, API service and custom coin issuance service are expected to be released in Q4 2018. Migration to cloud, E-Oracle network, and mainnet release are expected to take place in Q1 2019. Whether or not the team is meeting those milestones and the degree of the product development as well as the team’s success in platform’s security and performance on each stage will drive the token price up or down.

Demand for the platform

At the date of analysis (May 2018) it is hard to predict the demand for the platform in 2019 once it is fully released. The main concern is that the developers seem to be targeting primarily South Korean market. Nevertheless, the team claims to become a global player on this market.

Sales of tokens by the team, founders, advisors and partners

50% of tokens are reserved for founders, team and advisors (18%), partners (15%), accelerator fund (12%) and bounty/marketing (5%). Vesting period of 12 months is set for the team/founders/advisors only, so potential sales from partners/accelerator fund and bounty/marketing beneficiaries and eventually within 1-year time by the team may lead the token price down.

Limited token supply and hyperdeflation mechanism

Assuming that the company develops the platform as intended, market penetration is sufficient and the demand for the solution exists and growing, limited token supply will result in a long-term deflation of the token price. In addition to that, any unsold tokens during the ICO will be burnt therefore decreasing circulating supply.

Volatility and immaturity of cryptomarket

Although the token does not have speculative purposes, high volatility of cryptomarkets may cause traders and speculative investors to trade EDN which may lead to EDN price fluctuations or even speculative activities (pump&dump, etc.).

Based on our analysis we identified the following risks for Edenchain project:

Risk

Description

Level

Commercial risks

 

High competition in the market raises significant risks for Edenchain. Edenchains aims to cover various different markets (IoT, shared economy, tokenization, ICOs, finance) which means that they compete directly with projects like Ethereum, EOS, Stellar and ICON which are either released already or will be released shortly in 2018. Whether or not Edenchain will be able to differentiate from the rivals due to higher security and performance (as intended) will be clear when the alpha/beta platform will be released publicly. In addition to that the focus of Edenchain platform seems to be shifted on Korean market which is not very significant in terms of size of blockchain market. Once the alpha/beta versions of the platform are released and competitive advantages of the project are evident, this risk may decrease, as Edenchain is currently valued considerably lower than competitors.

High

Absence of MVP

As of the date of analysis (May 2018), despite having a demo video in their blog, the team has not yet released an MVP/alpha, which is expected to be released in Q2 2018 according to the project’s roadmap. Absence of MVP seriously jeopardizes the ability to assess the team competencies, capabilities of the suggested product, degree of product development and other crucial factors that investors in an ICO must consider before making any decision to invest. Once alpha of the platform is released, and the team progress is obvious this risk’s level of may go down.

Medium

Unclear ICO details which cannot be verified as of the date of the analysis

The team is not transparent on its website and in the project’s whitepaper on some important ICO terms. E.g., start and end dates are not specified, bonuses (if any) are not mentioned. Moreover, smart contract code on GitHub is unavailable for public review and important ICO terms (vesting periods, token distribution timelines, bonuses, token burning) cannot be verified. Edenchain will be using an API that is developed in-house for token distribution.

Medium

Team composition / competence

 

The team has ambitious plans in terms of the product complexity (many products, strong security, infrastructural nature of the platform) and deadlines – they plan to release beta by the end of 2018 and mainnet in Q1 2019. There are no team members that actually had practical experience in blockchain prior to Edenchain, however we note James Ahn has understanding of blockchain technology which is proven by his participation in publishing of book covering blockchain and lectures that he had given. On the other hand, the team has extensive experience in IT area as a whole. Several team members are also involved in Byzantine partners – investment fund which is listed as partner on Edenchain website. This may lead to potential segregation of duties and conflict of interest issues. Edenchain representatives informed us that their arrangements with Byzantine Partners are such that both parties are incentivized to ensure the long-term success of both parties, and that they have a signed MoU for long-term cooperation. Two team members responsible for marketing and one responsible for business development do not have evidence regarding their previous marketing/business development experience, have small network on LinkedIn and no recommendations or endorsements from the former colleagues. Some project advisors do not list Edenchain on their LinkedIn profile and some advisors do not have LinkedIn accounts.

Medium

No business whitepaper

The team does not publish a general whitepaper on Edenchain’s website, only technical whitepaper is available. Therefore, the following areas are not covered:

  • Absence of market / competitor analysis which is crucial as the competition is high;

  • Roadmap, team and advisor composition, ICO details are published on the website only;

  • Unclear token and project economics (e.g. fees are not specified, revenue streams, target markets, illustrative use cases, etc.)

  • Forecast marketing activities and plans for product promotion are not detailed enough to make analysis and relevant conclusions, while they are important for the market acquisition

  • Products listed in the roadmap (EdenExchange, wallets, ICO platform and some others) are not covered in technical whitepaper. The team informed us that these products will be covered in business paper.

Given that there is no actual MVP that is available for the public to test, other than two demo videos on the MVP, all of the above significantly increase risks for investors. The team members informed us that they are planning to release business paper in June 2018 after the ICO ends.

Medium

Unclear project economy

The team does not disclose detailed forecast use of proceeds from the ICO, fees for the services of the platform and, therefore, potential revenue streams are unclear.

Low

Token price decrease

There are no fundamental factors that indicate that token price faces significant pressure – the bonuses are low. However, 90% of the hardcap have been raised during presale rounds, so the bonuses may have their impact in short-term.

Low

 


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.