Friendz Rating Review
|Start ICO||01 Mar 2018|
|End ICO||21 Mar 2018|
We have reviewed the project's progress as of February 2019 and would like to note despite the app being launched, token volumes show that the project failed to achieve mass adoption, and the token is depreciating. Therefore, the project's rating has been decreased to Risky.
The Friendz platform combines within a single ecosystem advertisers and ordinary users of social media who for rewards conduct advertising campaigns in their social media profiles for the circle of friends and acquaintances. The main idea of the project is to spread advertising using the forces of ordinary people who are not famous or popular, for the same ordinary people - their friends. The power of “word of mouth” is used in order to increase the effectiveness of advertising campaigns.
The service is already successfully operating in Italy and Spain, which is a distinct advantage. The project is staging the ICO for the worldwide distribution of the service and the introduction of blockchain technology, which will improve transparency and security of the platform.
The idea of the project is interesting and in-demand in the market. The digital advertising market in general and the segment of advertising social media in particular are steadily rising, opening, therefore, great prospects for the development of the service.
The project team is quite young and does not have many years of experience, however, fruitful collaboration has led to the successful operation of the Friendz platform.
The key risk, in our opinion, is the lack of descriptions of the technical component of the future of the decentralized platform, which does not allow us to fully assess the prospects of development of the services and the benefits obtained as a result of such a modernization. Also note that the time-frames for the introduction of blockchain technology are quite vague.
In addition, the project has competitors that have already completed their ICOs - for example, projects AdHive and Indahash. However, these projects are aimed at social media users with large audience, while Friendz does not limit participation in campaigns by a large number of subscribers.
General information about the Project and ICO
Friendz — a functioning advertising platform, the main feature of which is the implementation of advertising campaigns using the method of “word of mouth” in which advertisers are regular users of social media who place promotional content in their profiles for their friends and subscribers. The Friendz team believes that the promotion of goods and services is most efficient if the end users see ads published by people they know personally or are familiar with.
The ICO is held to raise funds for the globalization of the project and for moving it to blockchain technology. Friendz SA, on behalf of which the ICO is staged, is registered in Switzerland, Via Serafino Balestra 6, 6830 Chiasso.
The FDZ tokens issued during the ICO have a utility function and will be used to pay for the marketing services and to access features inside the platform. Tokens will be the only way to access Friendz services. The authors leave open the possibility of using Fiat for clients that are not able to access the cryptocurrency market by purchasing tokens for them.
The reward received by the community are Friendz Credits, a scoring sytem that tracks the users’ participation to the activities. Credits have a fixed value in euro, while tokens’ value is floating. The exchange rate between credits and tokens will depend on the value of tokens in the market.
Shortly after the end of the ICO the authors promise a listing of the token on the affiliate site, The Rock Trading.
- 50% - token sale
- 20% - reserve fund
- 11% - partners
- 7% - advisors
- 5% - liquidity fund
- 5% - team
- 2% - bounty program
New token will not ever be created. All the unsold tokens will be destroyed.
Round 1. Public sale
Soft Cap: 50,000,000 FDZ
Hard Cap: 750,000,000 FDZ
01/03/18 (first hour of the token sale) 1 FDZ = 0.048 USD
01/03/18: 1 FDZ = 0.056 USD
02/03/18 - 07/03/18: 1 FDZ = 0.061 USD
08/03/18 - 21/03/18: 1 FDZ = 0.067 USD
Minimum Buying Transaction: 0.1 ETH
Maximum Buying Transaction: no.
Accepted currencies: ETH
Funds allocation: 50% - business development & marketing
20% - personnel and professionals
15% - development
10% - general and administrative expenses
5% - other
Token Issue Date: immediate
Vesting: tokens bought in the first hour of the token sale and tokens for reserve fund, advisors and team will be locked for 12 months and made available proportionally. The tokens will be available on a monthly basis, for 1/12 of the amount.
Escrow: no data
US persons and Chinese residents cannot participate in the ICO.
The authors of the project are speaking about the interest in the ICO on behalf of investment funds. Being interested primarily in the increase in the number of users of the platform, the authors allow for the participation of the funds, but giving priority to community.
Description of the services and scope of the project
Friendz platform - the system for interaction between advertisers and social media users placing the advertising content. In this case, the uniqueness of the project is based on the “word of mouth” method: best advertising is advice from a friend. The idea of the project was born in the solution of the main problems of this sector of digital advertising: authors speak about the common unnatural manner of advertising and the low efficiency of such campaigns led by well-known users with a huge number of subscribers in comparison with advertising posted by ordinary users among friends. Every day a large number of social media users post photos and videos containing information and/or portraying some products, thereby making involuntary advertising. Friendz proposed a solution, which helps advertisers to carry out unobtrusive advertising campaigns and allows users of social media to earn on it.
Friendz is a company functioning since February 2016. In the promo clip posted on the website, the authors speak about the famous brands that used the Friendz platform - Jeep, Philips, Uber, Decathlon, Sony, Furla, Toyota, PayPal, Nestle, WB, Universal, Disney, Ferrero, and the list goes on and on. In general, the results of operation of the platform since the launch are as follows:
Users of the platform are working with it through the website and application for smartphones (currently available on iOS and Android for Italy and Spain. Further global expansion is planned).
The Friendz platform involves the interaction of three types of participants:
- Clients. Advertisers define the parameters of an advertising campaign: budget, number of participants, target audience, social media, the concept and creative component. The platform supports campaigns to increase brand awareness, product placement, increased activity, generating potential customers, market research.
- Users. Choose an interesting ad campaign, create the content based on the rules of the campaign, post it on the pages of their social media pages and get rewarded.
- Reviewers. For a reward they confirm the consistency of the advertising campaign offered by the advertiser with Friendz internal policy and compliance of the content posted by the user with the regulations of an advertising campaign.
Any user who has successfully completed a certain number of advertising campaigns can become a reviewer.
In the system there are mechanisms for assessment of the integrity of the reviewers and of the motivation of users to create high-quality content (user ratings).
At the moment Friendz has two main objectives:
- globalization; by 2020 the authors of the project want to develop a network of users to 20 million (now it is about 200 thousand);
- the transition to decentralization by using blockchain technology.
The authors name the advantages in the use of this technology, but do not describe in detail the technology components. For example, the Whitepaper gives the following justification of the use of blockchain:
1) increase of transparency (information about rewards), and hence the trust of customers. This can be achieved through decentralization of the allocation of funds by transaction and through records in blockchain;
2) automation of the procedure of creating an advertising campaign. At the moment this occurs with the participation of the team of Friendz;
3) the decentralization of the review system (though the authors of the project, in direct conversation, pointed out that in fact this aspect of the platform is already decentralized in other ways).
Unfortunately, the documentation has no clear descriptions of how the improvements will be achieved through the use of blockchain in any of the aforementioned cases. There is also no information about the current stage of development and no precise estimates of the timing of introduction of technology, which does not allow us to fully appreciate the benefits of the platform's modernization.
The authors of the project are giving the market review based on the eMarketer statistics according to which the market of digital advertising is steadily growing. We confirm the relevance of this data and provide fresh forecasts.
According to research by eMarketer, the digital advertising market in 2018 will exceed a quarter of a trillion dollars, and by 2021 it will almost reach 0.4 trillion dollars. At the same time, the sector's share of digital advertising in the advertising business is also growing. The market is promising and growing.
According to predictions from another statistical agency (Statista), the revenue in the market of digital advertising in 2018 is estimated to be worth $ 280 billion; the largest segment is “Search Advertising” - about 45%. Potential market growth by 2022 is estimated at 350 billion dollars of which 273 billion will be generated by mobile devices.
The sector of social media advertising is also growing. In monetary terms, the market segment is estimated at 51 billion dollars, and by 2022 it is expected to grow to 80 billion dollars. Thus, the share of mobile devices is also increasing.
The authors of the project also cited the results of the research conducted by Nielsen.com in 2015. People surveyed around the world said that they trust advertising from people they know.
Thus, we can with considerable confidence claim that the market provides a huge potential for the growth and development of the project. Moreover, the project has found its niche in the advertising segment; Friendz stands out by the absence of the race for media personalities and by its focus on ordinary people.
The Adhive project aims to automate the interaction between advertisers and bloggers with a small audience for placing native advertising on their channels. The key innovation that distinguishes AdHive from its rivals is the use of artificial intelligence technologies to automate image and voice recognition in videos. Pre-sale project has been completed, with $ 5.5 million and ICO Phase 1 is closed, with $ 12 million raised. The project itself is still in the development stage, but an Alpha version of its functionality is available. AdHive has not integrated any mechanism of community management and engagement.
IndaHash – a functioning platform for involving influencers in advertising projects for big brands; the projects are also carried out on the basis of social media. To communicate with influencers IndaHash uses the IndaHash App which unites more than 300 000 influencers with more than 1 billion followers. The project's ICO is completed, the integration of the token is scheduled for March 2018. IDH tokens are listed on HitBTC and Tidex, but the demand for them in the secondary market is not growing yet:
Team and stakeholders
Unlike a large number of ICO projects, Friendz is an already operating company. On the website of the company operating statistics for 2 years of the company's operation is provided. For example, the revenue is declared in the amount of 1.2 million euros. The net profit of the platform is not disclosed.
The project's co-founders are young and ambitious Alessandro Cadoni, Cecilia Nostro and Daniele Scaglia. Despite little experience, the founders managed to create a successfully functioning project Friendz.
However, the weak link may be the competence of the team in the field of blockchain development - these employees, Lanternini Flavio and Mario Soprano, are working together on a blockchain project for the first time, after having completed professional training programs.
Among these advisors, only Simon Cocking confirmed his involvement in the project on his page on LinkedIn. He has experience in various fields, it is not specified what expertise he is offering to the project.
David Drake, an advisor with an impressive experience in ICO projects and start-ups, is useful to the project in our opinion.
The partners include:
The Rock — crypto currency exchange which originated as an insurance company in 2007 which began operating as a stock exchange in 2010. Registered in Malta. Unfortunately, the exchange has relatively low liquidity and relatively low trading volumes.
IBEX Capital — management company, founded in Switzerland in 2006.
Triboo — digital advertising. It has been operating in Italy since 2001. In 2016 they have already financed Friendz for 500 thousand euros.
FDZ token in the Friendz project has infrastructure role. According to the documentation, with the help of the tokens, advertisers will be able to purchase Friendz Credits which in turn will be used for the rewards for the campaigns. Payments to users and reviewers will also be made in credits. Users can spend the credits on the services of the platform (the rating upgrade, promotion of your profile, etc), or to convert loans into tokens (available from a certain amount of credits).
Tokens will be the only way to access Friendz services. The authors leave open the possibility of using Fiat for clients that do not trust the cryptocurrency. If you deposit funds in fiat, the project will use these funds (or a portion of these funds) to buy tokens.
The acquired tokens will later be distributed to the community for transforming the reward of their participation to the activity proposed. These tokens can be used by the community to access some new features inside the application whereas being again placed in the secondary market.
The authors of the project, unfortunately, did not disclose the financial model. The existence and extent of the commission on the platform are not determined, as well as the cost of services provided by the Friendz platform itself to support advertising campaigns. Thus, it is not possible to assess the project's profitability and its viability after the depletion of the funds raised in the ICO.
In the roadmap described in the whitepaper, it is described that the possibility to transform Friendz Credits into Friendz tokens has been already developed and will be available in the next release of the app, though the date of the release is not defined yet. In addition, in the 3rd quarter of 2019 internal wallet for users will be introduced.
Thus, in the short term the growth in the value of the token can be determined exclusively by the marketing tools. Currently, we assess the community interest in the project as average. Despite the huge number of members of the Friendz Telegram channel (more than 84 thousand), in 3 days since the start of the ICO about 322 million tokens were sold with 14,000 transactions, which at an average price of $0.06 is equal to approximately 19 million U.S. dollars.
In the medium term and in the long term, demand for the tokens will depend on the size of the future community, the number of agreements with new partners and clients and on the success of the implementation of blockchain. Since the time-frames for the integration of technology are not specified it is impossible to assess potential growth of the token.
Investment risk analysis
The main risk of the project we see in the lack of detailed description of the technical documentation or other information about the degree of the system's readiness for transition to blockchain. For this reason, we cannot objectively evaluate the potential benefits of the platform which it will get as a result of this modernization.
In addition, as the company plans a large-scale globalization, the future of the project greatly depends on the official position of the world's regulators in relation to the circulation of the cryptocurrency. On the one hand, some countries demonstrate a flexible approach to regulation in this sector, for example, Germany, which recently essentially announced the recognition of bitcoin as a legal tender in the country. On the other hand, the US authorities are increasing their pressure on the cryptocurrency market, stating that some companies are violating existing legislation, since many of the tokens issued during ICOs have attributes of securities.