We assign the Finom project a "Positive" rating, and recommend participation in the ICO to investors purchasing tokens both for long-term investment and speculative purpose. During the crowdsale, investors will receive a bonus in NOM tokens when buying FIN tokens; we consider both types of token to be an attractive investment.
Finom gives the impression of a serious project that has many objectively strong aspects; the project has a competent team with proven experience, and most importantly, it has integral working businesses which have earned their customers in a competitive struggle also occuring in the crypto market. In addition, it is a good idea to build a more successful business from individual projects that are part of the larger infrastructure of the current market.
The project’s approach to documentation and its content is worth noting separately. Finom’s documentation is very good; a lot of attention is paid to the competitive advantages of each of the services and the financial model; a detailed strategic plan is provided.
Despite the lack of documentary evidence or a disclosed legal model for the FIN token, the fact that the project will be the first to officially formalize the tokenization of shares in full compliance with US law already sets a precedent.
The strategic risk, which is the main one from our point of view, is the very concept of the Finom conglomerate. It is difficult to calculate the synergistic effect; some existing successful businesses may cease to be successful in the context of unification, since a large number of projects are often accompanied by a risk of less management attention and a less efficient implementation for projects.
With all of the above, we assess Finom’s prospects positively, as we believe that the team which has successfully launched several fintech start-ups is able to continue its development at a decent level. In addition, Finom gives the market a unique opportunity to invest in a project that could become a precedent for the entire ICO industry as a whole and successfully resolve the issue of attitude to Security tokens.
General information about the Project and ICO
Finom is a project for the creation of a separate ecosystem based on blockchain technology, cryptocurrency and financial solutions, where the user has access to many financial services related to fiat and cryptocurrency, including use of AI technologies. As a result, the team describes Finom with a capacious slogan of "One Finom for All Solutions", and describes it technically as a "blockchain ecosystem with a single point of entry and an AI assistant".
Finom is the brainchild of several companies that consolidated into one group of companies in August 2017. Tab Trader, Nanopool, Cryptal and Cryptonit – these four businesses were already functioning at the time the group was created; they had a customer pool and a ready-formed team.
The project is very extensive; it is difficult to characterize it in two sentences. Finom is one of those projects where complexity lies not in the idea but in a number of different services combined within a single group of companies and, moreover, within a single ecosystem. Finom combines the following services which are at different stages of development:
Nanopool - a large international pool of altcoins;
TabTrader – a popular mobile terminal for trading cryptocurrency worldwide (according to Play Market statistics it has a rating of 4.7 with 21,396 ratings)
Cryptonit – a crypto exchange operating since 2012
Cryptal – a mining farm with a capacity of 35,000 MH / s
Cryptogen - development mining software
Beetle.io – an exchanger of fiat for cryptocurrency via bank card
In addition to specific businesses, Finom is developing financial banking and insurance products, as well as its own data center.
The team presents an interesting case to the investor: It has consolidated various platforms from the same industry on the basis of holding structure while consolidation occurred not only legally or financially but also in terms of business processes. As a result, the synergistic effect of all Finom platforms can become truly meaningful on the basis of a common ecosystem.
Thus, Finom offers the investor an opportunity to participate and make a draft on a fund from development of a group of companies in the field of cryptocurrency and blockchain. We emphasize that in the case of Finom, the investor can take part in the group’s development; this is one of the main differences of this ICO from many others. This is achieved by the format of the crowdsale, where, in addition to hosting Utility Tokens, Security Tokens (the facts model) are created as part of the smart contract.
Finom produces two types of tokens in the same amount on the ICO - 113 million tokens: FIN and NOM. Participating in the ICO, the investor purchases two tokens at the same price (buying a FIN token, a similar amount of NOM is given as a bonus), i.e. their separation is impossible during the ICO period. In the future, tokens can be accessed openly on the market but the conditions for treatment are different.
The FIN token is a tokenized share placed in accordance with Regulation D (Rule 506 (c) of Regulation D) of the U.S. Securities Act of 1933. This means that tokens can be officially acquired by accredited investors from the US and other countries. Possession of the token gives, by analogy with shares, the following rights:
the right to receive a share of Finom AG profits in the form of dividends
the right to participate in the management of the company (voting rights at meetings of shareholders)
the right to a part of the company's property (in liquidation of the company)
Tokens will be listed on the Cryptonit exchange from March 2018 for non-residents of the United States and after 12 months from the end of the placement, on Sharespost for US residents.
NOM token is a utility token; its price is provided by an infrastructural necessity within the framework of Finom functionality. At the same time, NOM can freely access the open market and trading floors. According to the information from the white paper, Finom is negotiating with the largest crypto exchanges (Bittrex.com, Exmo.me, BitFinex.com, CEX.io, etc.) about listing tokens immediately after the end of the token sale.
Legally, the project is presented by Finom AG, the parent company of the group registered in Switzerland. The choice of this jurisdiction is explained by the team's ability to use blockchain as an accounting system. Finom AG owns the following companies:
Holders of FIN become shareholders of Finom AG, obtaining the right to a share of profit in the form of dividends and voting rights. The team also presents the organizational structure of the group in a concise form:
Legal support for obtaining the necessary permits in the US is implemented by a large American law firm, Perkins Coie.
ICO start date: 15 Nov 2017
ICO end date: 30 Dec 2017
Hard cap: $101,097,000
Soft cap: -
Token: FIN; NOM, standard ERC-20
ICO price: 1 FIN (+1 NOM) = $2.00
Accepted payment: EUR, USD, BTC, ETH
Token emission: 113,000,000 FIN; NOM
Distribution of funds:
45% - Token sale;
55% - Company.
On sale: 50,985,000 FIN; NOM
55% of FIN and NOM tokens are reserved within the company and are subject to lock-ups until 2020. The lock-up mechanism will be incorporated into the ERC-20 smart contract.
15.01.2020 releasing 15% FIN and 15% NOM;
15.07.2020 releasing 20% FIN and 20% NOM;
15.01.2021 releasing 20% FIN and 20% NOM
There are bonuses on the ICO depending on the amount invested: from $100,000 to $1 million: + 5%; from $1 million to $3 million: + 10%; more than $3 million: + 15%.
Description of the services and scope of the project
The Finom ICO is worth considering from the point of view of expanding the group's business, since the core of its services has already been created, and it has operated in the market for some time. In the documentation, Finom has dedicated a separate section to each of its services (working and planned) which describes its functionality, benefits, interim results and development plans. Next we will consider each of the platforms, as well as common solutions for the entire Finom infrastructure.
This service is a mining pool that distributes the task of calculating the block among all connected participants. Nanopool uses user-supplied capacity for mining and distributes the received cryptocurrency between participants. The pool has been running since 2015; during this time, according to Finom, the number of users has reached 71,500 people. During the ICO, Nanopool received a license to enter the Chinese market and opened a pool for the extraction of Electroneum.
The share of the pool in world production of altcoins (information is confirmed by data from independent monitoring portals) is as follows:
The greatest profit for the pool is generated by the production of Ethereum; 6,000 blocks are produced per day; the minimum reward for the block is 3 ETH. Together with the profit from the production of other altcoins, Nanopool generates $300,000 of monthly income.
This service is a mobile terminal for trading cryptocurrencies based on Android and iOS applications. Trading takes place via crypto exchanges; TabTrader has access to 23 major exchanges including Coinbase, Bitstamp, Kraken and Bitfinex. Economically, the project works by obtaining half of the exchange commission (0.25%), being a virtually free application.
A user of TabTrader is given the opportunity of convenient placement and changes of orders for buying or selling when working with a chart (determining the price by clicking on the chart). There is also an option for placing an order with certain parameters with a price in fiat or crypto currency, as well as technical analysis tools and editable graphics.
Currently, the volume of trading via the application is about $1 billion per year. In our opinion, the application is quite successful compared to competitors and has great potential, since convenient trading applications during a period of intensification of speculative hype around cryptocurrencies, are in demand among small and medium-sized investors. In the documentation, the team provides plans to increase the market share 10 times in 3 years; such plans look realistic. For this purpose, it is planned to launch a web interface for the service, launch of PAMM-accounts, conditional orders (take profit, stop loss), launch of margin trading. In addition, it is planned to launch trade on FOREX and exchange instruments in the long term.
This service is a crypto exchange for BTC and ETH. The company has existed since 2012 and it is registered in the UK; the number of users has reached 38,000. From a legal point of view, the exchange is clean - the necessary tolerances and registration with the relevant UK bodies have been obtained.
Cryptonit enables the introduction of Fiat or Crypto currency and the conduct of transactions on its own exchange; the storage of funds is traditionally held on the platform for the purpose of clearing settlements. The business model of the exchange assumes charging commissions for deposit/withdrawal of funds and for each transaction.
Currently, the exchange is closed to new users as it is being re-branded and consolidated within the Finom group. At the same time, the market share of the exchange in total crypto turnover is quite small: 0.01% of the market or 76 BTC per day. Obviously, further development of this service requires "fresh blood" and unlike TabTrader for example, this asset does not seem very attractive in its current form. The team needs to rethink the concept of Cryptonit and direct efforts to occupy a larger market share.
In our opinion, within the framework of the consolidated Finom group, Cryptonit could receive an influx of new users as the process of entering and trading for users of other services will be greatly simplified. In addition, marketing budgets will be optimized. According to the roadmap, the team is planning to launch large budgets for the development of the exchange ($46 million), as well as significantly expand the functionality and convenience of Cryptonit. There are goals such as entering the EU and US markets through obtaining the necessary licenses and permits. This can be considered a justified bet, but the market is quite competitive, which generates associated risks.
The team has developed its own exchanger, Beetle.io, in which the user can buy ETH and BTC via a bank card. The app is available on iOS and Android. While the team claims about 5,000 active users based on data from the App Store and Google Play, the popularity of the application is still low. In the near future, it is planned to launch a web version, expand the range of cryptocurrencies and coverage areas of bank cards. The culmination of the project’s expansion will be the development of an IPSP gateway and the creation of its own payment system provider in 2019.
Technologically, Beetle.io is a centralized exchanger based on Cryptonit. The user application interacts with the exchange where calculations and crediting of cryptocurrency take place via the API. In conjunction with its own exchange the service looks promising, but it depends heavily on activity on the exchange as quotes are formed by traders, i.e. spread depends on liquidity. When using the service, users are charged a platform fee of 7%.
The next Finom business to discuss is the Cryptal Mining Center (farm). This business is completely private; the farms use Nvidia and AMD cards for ETH production. The current capacity is 35,000 Mh/s.
This is all the information about the mining center in the documentation; the corresponding section of the white paper is more focused on describing the farm extension: The team is going to build 8 centers during 2018-2019 using cheap electric power sources (Canada, USA, Sweden). It is planned to expand the range of produced currencies - BTC, BCC, DGB-SHA, DASH, DGB, LTC, XVG.
The above-listed businesses are already functioning and are successful; however, Finom aims to go further, developing new areas of activity. First of all, there will be an expansion of the mining business and the creation of a full-fledged application for mining - Cryptogen.
Cryptogen will have a convenient interface, allowing mining automatically with a determination of the most advantageous cryptocurrency. The team sets the following goal for the project: "to become the world's most popular miner with the most currencies supported and the simplest interface". A beta version of the software should be released in January 2018. The current platform fee is 1-2%; a low entry threshold for new users and a financial model is provided.
In its plans, Finom rightly indicates that ecosystem development could be significantly limited from the point of view of the technical and physical infrastructure. For this purpose, the team intends to implement two serious auxiliary projects: Integration of banking and insurance services into the ecosystem and the building of its own data center. We call these projects auxiliary but they are not really, due to their scale; it is possible to stage a separate ICO for each of them. It is also worth noting that the terms of implementation, though distant, correspond to the potential demand for them. Thus, the data center should be built with a sufficient development of group infrastructure; otherwise its content will be unprofitable. The team is planning to start construction in mid-2020. Banking and financial services, given the high cost of development, can be in demand only after attracting the necessary audience to the main business aspects – the exchanger, trading, and mining businesses.
As for banking and insurance services, the following products are planned to be implemented:
A payment system for legal entities and individuals
A multicurrency wallet
A card business
This list is undoubtedly impressive; there are ICO projects with multi-million-dollar hard caps and working businesses in many areas.
The Finom data center will be a 2000-square-meter structure with a full load of 6900MW. The white paper provides extensive technical and design characteristics of the data center as well as the costs of its construction.
It is notable that despite the grandiosity of the plans, they evoke not enthusiasm but fear. Each direction of banking services requires careful elaboration and involves high costs and separate risks; each direction needs its own white paper and financial model to consider the feasibility of investments and potential. At the same time, the resources required for the implementation of these projects are enormous; for this, all Finom projects must become profitable and realize all the business indicators laid down in the business plan. There is also an external background influence: if niche risks correspond to a niche project, Finom will take on risks from all spheres of the crypto industry, finance and IT technologies. We don’t wish to exaggerate, but the above factors should be borne in mind when thinking about the "mountains of money".
Since consolidation into the group of services occurred only in August 2017, the platforms have the potential for overall integration and implementation of technical cross-platform solutions. Finom plans to create a blockchain-ecosystem with a single entry point and AI, where a user can manage all services from a single account as well as use services without the need for additional registrations or transfers of funds.
The process of creating an ecosystem is divided into 4 stages. At the earliest stage, it is planned to create a single account and a user identification system with the transfer of existing accounts to the created system. Stage 2 implies introduction of p2p financial operations, banking products, development of own payment system. Stage 3 involves the integration of popular third-party services to form the widest range of services within one platform. The last stage is creation of the AI assistant which simplifies the adoption of financial decisions by the user, forming personal investment proposals, optimizing costs, etc.
The team is paying special attention to the creation of the AI as this service will attract and work with clients whose level of financial literacy is insufficient for independent solutions. There are practically no such opportunities in the market; however, the question of using artificial intelligence for the masses in financial markets has been constantly raised.
The Finom project claims to be a global player in the world financial system. In the official white paper, the founders formulate their vision of the work of the blockchain system as follows:
Any user is free to use digital assets.
Paying with cryptocurrency anywhere in the world is easier than with a bank card.
All transactions are transparent and the legitimate origin of funds is instantly verifiable.
The markets are not subject to external manipulation.
Capital moves freely around the world.
Obviously, these ideas have sounded before; some of them can be called "fundamental" fintech ideas.
There has been a premise for development of a new financial system, for example, created on the basis of blockchain technology. It would seem that it is impossible to find a person without a bank card in our progressive age, but such assumptions may be made by those who live in countries with a developed financial system. In practice, it is not difficult to find people who do not have their own bank account. A Global Findex infographic, prepared in the framework of the research of bank accounts availability is given below:
The picture appears dismal; the most densely populated countries so far cannot provide their population with elementary access to basic financial services such as a bank account. Of course, such inequality is provided by a combination of factors, including population density, weak financial institutions, poverty, etc. The situation is gradually improving each year but the problem is still quite acute.
Against the background of the classic financial banking system, alternative solutions which are aimed at increasing accessibility and reducing the cost of final financial products are gradually emerging. As an example, the first thing that comes to mind is p2p lending which replaces the most classic banking operations of raising funds and issuing loans.
Blockchain technology, suddenly dropping into the lives of everyday people, also contributes to the development of the financial infrastructure. First of all, we can talk about the role of cryptocurrency as a payment instrument. Currently, it is a fait accompli that a number of countries allow businesses to make payments in Bitcoin. On one hand, this is undoubted progress, but on the other hand it is too early to rejoice. Due to the peculiarity of the Bitcoin network architecture, the number of transactions per day is limited and the daily transaction schedule has the following form:
Due to extensive growth in the cost of digital gold, the price of transactions is steadily increasing. This circumstance makes the most popular distributed registry poorly suitable for banking transactions, at least in its current version.
There is also a problem related to the volatility of bitcoin. The means of payment should be less volatile than the coin most popular in the crypto industry.
Thus, fintech projects still have a long way to go to compete with classic banking business and the existing capabilities of blockchain.
Crypto market activity is not limited to transactions. The Finom project combines projects that represent all main market activities such as mining (mining pool and mining farms) and exchange trading (mobile applications, crypto exchange). To see how interesting these business directions are, it is enough to give a graph of the change in market capitalization of cryptocurrency:
The team is also an interesting aspect of the Finom project: The unification of different businesses under one structure took place only in August 2017; the teams of each of the businesses have existed for quite a long time. As a result, there is a small risk of conflict between managers; we cannot talk about an established team. As for the competence of managers and staff, this is undisputable despite the relative youth of team members. Almost every member has experience in his direction and a good education, as well as experience in running one of the group's businesses.
In total, the Finom team has 50 members but the description is only of the top management. A positive aspect is the cultivation of corporate culture, the basic principles of which are fixed in the corporate Code. Characteristics and links to profiles on social media of the primary people in the project are listed on the website.
Kirill Suslov - CEO (LinkedIn)
TabTrader founder. In 2009 – 2013, CEO of OLS Ltd. which developed stock trading strategies based on chaos, fuzzy logic and genetic algorithms theories. Devised his own trading strategy based on volatility in inter-commodity correlation. Started his career at PwC, worked at OLS (Automated trading strategies development for stock exchange). Holds an MSc in Investment Management cum laude from Cass Business School in London and a BSc in Economics from the University of Warwick.
Denis Suslov - CFO (LinkedIn)
Co-founder of TabTrader. Passionate about trading and investing. Fascinated by crypto economics. Started his career in the banking sector of the Russian Federation; worked at OLS. Holds a first class bachelor's degree in Economics from the University of Warwick, MSc in Econometrics and Financial Economics from London School of Economics and Political Science.
Kirill Yashchuk - CTO of TabTrader (LinkedIn)
Has more than 10 years’ experience in programming. Holds a Master of Computer Science degree from ITMO University in Saint Petersburg, Russia. With the team of TabTrader, went through Alumni of Rockstart Accelerator in Amsterdam.
Alexandr Barkovskii - CTO (LinkedIn)
Nanopool founder. During his 4th year of study he started his career at GeoPhysTechno as a developer for oil prospecting, working on software able to solve complex tasks in GPU. Experienced in development on Java, C/C++Python, Perl, Objective C, Go, Fortran, CUDA. Started mining in 2012. Holds Bachelor and Master of System Analysis and Management degrees from Peter the Great St. Petersburg Polytechnic University, Faculty of Technical Cybernetics. Holds Bachelor and Master of System Analysis and Management degrees from Peter the Great St. Petersburg Polytechnic University, Faculty of Technical Cybernetics.
Vladislav Alushkin - Chief Security Officer (LinkedIn)
Founder of Nanopool. Developed algorithms for operating big databases in oil prospecting area in GeoPhysTechno company. Computer safety specialist, graduated from the Department of Computer Technologies of Saint Petersburg Electrotechnical University "LETI" in Russia.
Rustam Kutuev - Business developer (LinkedIn)
Private investor and serial entrepeneur. Founder of PrideGames game studio and Cryptal mining farm. Before that owned two car service centers, car rental service and exported fuel pellets to Europe. Studied physics at Saint-Petersburg State University
Yegor Karatov - Chief Compliance Officer (LinkedIn)
Co-founded Beetle.io’s in 2016. In 2013, joined Cryptonit bitcoin exchange as compliance manager. Responsible for risk valuation, client due diligence and AML procedures. Graduated from Belarusian State University Lyceum and Hague University of Applied Science. We did not find any other work experience except confirmed work at Cryptonit.
Anton Trusov - ChiefTechnology Innovation Officer
Founder of Nanopool, Anton develops the pools and maintains its mining facilities, and acts as product manager. Graduated from Saint-Petersburg Polytechnic University, Faculty of Technical Cybernetics and hold a Master of system analysis and management degree. Straight after university worked at GeoPhysTechno company where he developed software oil prospecting using electromagnetic waves.
Konstantin Karatov - Business Development
Founder of Cryptonit Bitcoin exchange. In 2017, led an Educational Bitcoin Course in Istituto Antonio Bernocchi, Italy. Before creating his own project, worked as a freelance programmer. Graduated from Belarusian State University, Faculty of Physics. Performed there as an assistant in Neural Networks Laboratory.
Andrei Yanukovich - Chief Accounting Officer
Joined Cryptonit bitcoin exchange since 2013. In 2007-2013 went in for international wholesale trading. Graduated from Faculty of International Affairs at Belarusian State University.
The list of consultants and partners is worth noting separately:
Robbert Boss - CPO & Co-Founder of BUX
Michael Terpin - Founder and CEO of Transform Group, Advisor of ICOBox
Ryan Leonard - Chief Information Officer of Forex Capital Markets
Alan Donenfeld - CEO and founder of CityVest.com.
Summing up, we can say that the project’s team is definitely its strong point. In addition to qualified and proven managers and founders, many consultants (lawyers, economists, specialists of specialisms) have been involved, as well as cooperation with large legal companies. In summary, Finom has an extensive consulting base at its disposal.
Development strategy and Roadmap
The Finom project has far-reaching plans for developing its own ecosystem. This is not surprising, given the wide range of functional integration. As stated in the official white paper, the construction of an intelligent ecosystem will have the following stages:
Blockchain - an infrastructure based on existing services. Providing users with access to all platform services via single account identification. Such optimization will make it convenient to use current services while paying a minimum in commission.
Bank products, own payment system. Holders of bank cards will be able to directly work with crypto accounts with a full range of available related services. The standard concept of banking services will be expanded to p2p-products which have always been difficult to implement without blockchain technologies.
Integration of third-party services into the ecosystem. The platform will be open to industry requests; popular third-party blockchain services will be integrated to extend Finom’s functionality and for additional convenience to users.
AI assistant. Based on users' decisions, the system will offer attractive products customized for a specific user. This functionality will increase the availability of financial products for people of different financial literacy.
The roadmap is usually published in the official documentation; it contains the main milestones of the project. The Finom team went a little further and published 9 roadmaps! 8 roadmaps for the services within Finom’s perimeter, as well as their common one.
Within the framework of this review we cite the generalized roadmap; individual plans for services can be studied independently from the white paper. At the same time, we note that the sections devoted to each individual service are well-developed, contain plans for revenue and other economic indicators.
After the token sale, Finom is planning to implement the following:
Cryptogen Miner: alpha version
Beetle.io: web version launch
Cryptonit: Ethereum support
Creation of a single Finom account, multi-currency wallet
Nanopool: BTC, LTC, DASH pools, Decred, LBRY, extended support, access to the Chinese market (a license has already been obtained), adding new pools, data center, universal system for adding new pools, POS-pools, ICP license
Cryptonit: replenishment via SOFORT, adding a new payment gateway, debit cards, private blockchain
Mining farm: launch of 4 farms
TabTrader: trade via web interface, PAMM accounts, API access, investor panel, complicated orders, entry via single Finom account, user verification (KYC + AML), Finom single wallet, USD deposits, margin trading
Cryptogen Miner: ZEC, XMR-Mining, GUI-update, infographics with mining history, a new miner's protocol
Beetle.io: new methods of replenishment (SOFORT-banking, Yandex.Money), real-time verification, secure storage of bitcoins, sale of bitcoins, p2p-exchange based on geodata
Banking: multi-currency wallet, payment system, currency exchange, SWIFT, SEPA, salary projects.
Cryptonit: regulated EU-crypto exchange, OTC-trades, liabilities trading, MT5 support, cash replenishment, US license for currency exchange
Mining farms: launch of 4 farms
TabTrader: FOREX trade, stock trading
Cryptogen Miner: mobile application
Beetle.io: own gateway for card operations
Data center: design and construction
Banking: p2p-loans, insurance, factoring, processing, crowdfunding platform, bank with membership of VISA and Mastercard, acquiring payments on plastic cards
Data centers: pre-project surveys, selection of a technical client, development of a technical task
Data center: design and construction, commissioning, complex testing
Banking: obtaining bank licenses
Even a superficial glance shows the volume of forthcoming work. It seems that the team represents all the seriousness of its ideas; the necessary investments for full realization of the roadmap are estimated at $160 million. The amount is quite large, but, oddly enough, performance of the milestones is almost independent of the funds raised during the token sale. Operating services generate cash flow, and the team is not planning to deviate from the plan at any outcome of the placement.
The marketing campaign for the FINOM project creates a good impression. The first thing that impresses is a website which meets visitors in 7 language variants at once; thus, a greater part of the world’s population can familiarize themselves with the maintenance of the project in their native language.
The second thing that a user sees on the website is the current progress of selling FIN:
The picture is definitely encouraging. The data itself can hardly be verified, so we have to take the FINOM team’s word for it.
The project has no problems in terms of social media coverage. Apparently, it was decided to concentrate the project’s promotion only on the most popular media. The website provides links to the following media:
Nothing superfluous, and the indicators are pretty decent:
Telegram - 5100
Twitter – 752
Facebook – 8549
The main channels of communication, as usual are groups on Telegram and a thread on bitcointalk.org. The thread itself appeared relatively recently – 31.10.2017, but 29 pages have already been typed. It should be noted that the forum is really lively, questions are being asked and answers are being given.
The same thing can be seen on Telegram groups. Groups are pretty lively, discussions are ongoing and the community is responding. Particularly heated disputes have not yet been observed.
If we talk about press releases and announcements, they have already accumulated a decent amount. The website has a section called MEDIA where profile sections are created: Press releases and mass media about the project. However, almost all posts refer to the project blog, which hardly fits with the declared title. At the same time, there are a large number of publications on the project in the network. Here we give only a few interesting links:
Finom Blockchain Corp Files Reg D for $101 Million Equity ICO
Finom AG has announced a $101 million Initial Coin Offering (ICO). Finom says it has filed for a Reg D exemption for the equity offering thus making it compliant to accept accredited investors in the US.
Finom – FIN ICO A.I. Trading & Mining Financial Banking Blockchain?
FINOM, found online at FINOM.io, promises to be the largest tokenized equity offering compliant with US regulations. Find out how it works today in our review.
What Is Finom?
It is evident there is a growing need for more unified cryptocurrency solutions these days. With so many companies offering different pieces of the same puzzle, it isn’t convenient for consumers to get the information and tools they need. This is where Finom hopes to make a difference, as it is a collaboration between various existing projects. Making the blockchain and cryptocurrency ecosystem easier to access is never a bad idea.
Finom launches $101 million ICO under Reg D, aims to reduce financial market entry barriers
Teufen, Switzerland based financial blockchain corporation Finom AG has announced plans to raise up to $101 million, to create world’s first blockchain-based platform to reduce financial markets entry barriers and provide Artificial Intelligence advising.
Finom Blockchain Corp Announces Reg D Tokenized Equity Offering
Financial blockchain corporation Finom AG today announced the launch of its $101 million tokenized equity offering to be executed pursuant to Regulation D of the U.S. Securities Act of 1933. Finom makes the world of finance available to everyone by providing a blockchain ecosystem with a single point of entry. The company’s ecosystem allows anyone to manage digital currency and assets conveniently and in accordance with KYC and AML regulations.
SharesPost Facilitates Initial Coin Offering for Finom
SharesPost Financial Corp., a leading liquidity provider to private growth companies, today announced it has been chosen by Finom AG, a leading Blockchain and cryptocurrency firm, to facilitate Finom’s Initial Coin Offering (ICO).
As often happens, some projects cause not only enthusiasm but also criticism or even frank irritation in the community. While we were searching for a fairly decent list of publications in the network, we came across two authors’ posts that criticize the FINOM project for a number of reasons. We will not cite these publications as part of the review but those who wish can find them using the following footnotes [https://medium.com/@droeder72/finom-ico-review-from-an-old-school-financial-view-fd53c5cb588b, https://hackcabin.com/ico/finom/].
Summarizing the marketing campaign for the FINOM project, we can say that the team has already done a great job. It is evident that all the main directions for the project’s promotion are covered.
Competitors and competitive advantages of the project
The project is a crypto-conglomerate that combines various activities. In some areas, each activity has its own strong competitors, but the main advantage for projects that unite different businesses is the synergistic effect.
The first component of Finom is the Nanopool mining pool which specializes in the production of coins by video cards; it occupies one of the top places for network hash rate.
Competition in this area is understandable; the larger the network, the more its hash rate, as well as the market share. The second significant market is the crypto exchange area. There are a number of strong players who are building their business on receiving commissions from deposit/withdrawal of assets and commissions from making deals. Finom cites the following platforms as its competitors:
All exchanges have their advantages and disadvantages and it is difficult to say with certainty how the Cryptonit exchange will be fundamentally better than others. But the desire of the founders to take 2% of the market and enter the top 15 in turnover within the next 5 years is quite realistic.
The third aspect of the Finom business is mining activity. Here, competition will be directly proportional to investment in the farms; there is really nothing to comment on here since there is no reason to doubt the competence of the team.
The Beetle application is of significant interest; it enables the purchase of Bitcoin and Ethereum using a bank card. This functionality is in demand, and will remain so in the near future. Big names in the crypto industry work in this market, such as Coinbase. The team determined the following list of competitors:
Features and competitive advantages of the Beetle service are as follows:
Availability of Android, iOS, Web (planned)
24/7/365 Customer Support
No restrictions on purchase amount
VISA, MasterCard, Amex, JCB, Unionpay and others
We have briefly listed all the main lines of Finom’s business. However, once again it is worth recalling that the Finom project can no longer be considered as separate businesses; it is already a separate fintech conglomerate. There are still not many examples of platforms in the market possessing such a wide functionality. It is possible to compare the NAGA project; this is a multidirectional fintech conglomerate. A distinctive feature of NAGA is that it is already a working company whose shares are traded on the Frankfurt Stock Exchange; company capitalization is about 250 million EUR.
Economy of the Project
Economically, Finom is multifaceted since it unites different businesses in its own ecosystem, i.e. different economic systems. There is no complex ecosystem in any Finom business; the scheme of payment for services in each direction corresponds to the best practices:
Nanopool – a platform fee is levied on payments to miners.
TabTrader - commissions are charged as half of the exchange commission; the standard exchange commission is 0.25%.
Cryptonit - a standard exchange commission is charged, it is 0.15%.
Cryptal – this is completely private therefore Finom receives full profit from mining.
Cryptogen - assumes a platform fee of 1-2% after launch.
Beetle.io - involves setting maximum market prices and a premium in the amount of commission - about 7%.
The size of commissions in the banking and insurance sectors has not yet been disclosed due to the early stage of these projects.
Regarding the costs for Finom, everything will be built mainly on software development, functional support service and attendants, marketing and legal costs. At the same time, due to the synergistic effect the costs of each current business will be optimized, particularly marketing budgets.
Finom’s documentation is full of quantitative data and financial forecasts; however, since there are multiple businesses in the group of companies and all of them have their own specifics, it cannot be said that services are fully disclosed in the planning of financial indicators. In the Russian version of the white paper, there is information on cash flows within the business. Based on this information we can see at what expense the team is going to finance its CAPEX, as well as the flows of each project.
An important aspect here, in our opinion, is the fact that plans and figures, although they do not look unrealistic, reflect a "positive" scenario of activity; if something goes wrong depending on the influence of the individual business on the whole project economy, different consequences can be expected. Let us consider the structure of Finom’s financial plan for this purpose.
Net cash flow from operating activities in the overall structure of Finom in 2019:
According to the information provided, the largest cash flow will be generated by the Cryptal farms. The diagram does not include the project’s investments; the farms also have the largest ones - $88 million in two years but even taking CAPEX into account, the share of the farms in the cash flow in 2019 remains practically unchanged; significant changes can be seen only in 2018 when the business will generate a negative cash flow of $7 million.
The second largest cash flow is generated by the Cryptonit exchange. In this case, the largest share of the cash flow is observed in 2018; it will generate the largest cash flow in 2018 taking the CAPEX segment into account. In its calculations, the team pledges to achieve a market share of 2% within two years with standard commissions - this is a fairly optimistic scenario, given the huge competition among crypto banks and the risks of the industry as a whole. As a result, the dynamics of trading turnover in the long term looks as follows:
As for the other services (Nanopool, Tab Trader, Beetle.io, Banking), their share in the overall structure is small but as the group develops, we can expect that revenue from the combined financial fiat and crypto software infrastructure could grow substantially; active development of the services is planned as they are closely interrelated.
To summarize, it should be noted that in the field of project economy, the information, although ambiguous due to the complexity of building a multi-component financial model for large projects in a volatile market, is sufficient to analyze and understand the logic of the team’s planning. It is still enough to assess the quality of the project in comparison with other ICOs, since we are considering the project in the sphere of high-risk ICO investments.
As already mentioned, the Finom project differs from the overwhelming majority of ICOs and has a number of specific features. In addition to the token sale, Finom is planning to register their ordinary shares in the US jurisdiction which will impose part of serious obligations to provide reporting and disclosure. This step, of course, reduces a number of common risks for start-ups. But it is wrong to call Finom a start-up since the project unites a number of working businesses.
The project should be viewed as a conglomerate of different financial businesses; the team is trying to include everything in a single ecosystem but it does not mean that this will work. Due to the fact that Finom projects are at different stages of development, it is not clear whether a synergistic effect will occur for the future value of the NOM token.
Similarly, the unique feature of the project of being the first placement of tokenized shares in full compliance with US law carries a number of risks. This experience will be the first not only for the ICO project but for the US regulator as a whole. As we know, case law has an increased interest in "pioneers", and the process may come up with nuances that are now difficult to calculate due to the lack of precedent.
Seriously speaking, projects of Finom’s level do not enter the market very often. A working business with a strong experienced team and good documentation – all this significantly reduces many of the risks specific to ICO projects.
Token investment attractiveness
Regarding the investment attractiveness of the project, it is worthwhile to consider FIN and NOM tokens separately, since their status is different both economically and legally.
The NOM token is a classic example of an unregulated utility token, the appeal of which is created by the popularity of Finom’s services and the scale of the business. The NOM acts as a domestic currency within the Finom ecosystem along with other settlement means and confers certain privileges to investors:
Commission discount on all services
Special privileges when using Finom bank cards
Discounts for training programs in Finom Open University for holders of NOM tokens
Possibility to pay for advertising services within the Finom ecosystem
Special privileges and the ability to pay for new services
FIN is a regulated security token placed within the "legal" ICO with the consent of the US regulator in accordance with Reg. D and Reg. S of the U.S. Securities Act of 1933. In this regard, restrictions are imposed on it, both in the initial sale and in circulation, which are compensated by rights that are actually similar to the company's standard share. A holder of the token has the right to participate in the management of Finom, the receipt of dividends and a portion of the assets (in case of liquidation). The first two points are especially interesting, since the team claims to build an original and completely legal system of rights. So far, these are only statements as the team did not yet publish the presented mechanism and the know-how, but if these promises are real they set a precedent.
According to public information, Finom is planning to pay 20% of net profit as dividends. Dividend payments will be the responsibility of the Board of Directors of Finom AG; they will be paid in ETH, BTC or another agreed currency. The announcement of dividends, the date of payments and the volume will occur in a month; to receive dividends, it will be necessary to have an account on the Cryptonit exchange before this date. On the day of payment, a correspondent amount of cryptocurrency will be credited to the exchange account.
The actual amount of dividends cannot be understood without information on the structure of the share capital of Finom AG, but if we take the maximum potential share of investors (50% minus one share), token holders, according to calculations based on the figures presented in the white paper, could receive about 10% dividend yield. Naturally, investors should be guided by this figure only taking into account the above assumptions, since the share of tokenized shares may be even less than the blocking stake. For real planning, additional information should be obtained from the team privately. Yet even the marginal 10% does not look attractive against the background of venture project risks; therefore, as a basis for attractiveness, investors should count on long-term business growth.
Summarizing the analysis of the two tokens and their bonuses, we can talk about the real long-term attractiveness of both FIN and NOM tokens. At the same time, the investor cannot purchase one of the tokens individually, so the one that has medium-term and short-term interest is the NOM token, which depends heavily on hype around the services and the scale of "client-oriented" services: TabTrader, Cryptonit, Cryptogen, Beetle.io. The possession of FIN is expedient for the long-term as an analogue of a share in the financial business. That is, the investor receives some margin for maneuver after the ICO; he has the opportunity both to monetize short-term speculative interest and wait for the realization of the fundamental prerequisites for the growth of token price.
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.