Grain Rating Review
|Start ICO||16 Apr 2018|
|End ICO||07 May 2018|
We assign the Grain project a "Stable+" rating. GRAIN tokens could grow in price in the long run. The potential of the HR market, in which the project intends to operate, is quite strong, especially for the use of blockchain technology.
The project has some risks, however we would like to emphasize that they could easily be minimised by the team.
The project team is experienced, and includes blockchain experts and a specialist in the field of ICOs. However, we believe that the legal aspects of hiring employees through smart contract should be described in greater detail; this would further increase attention from the blockchain community.
Flexentral is a partner company, also founded by the project team. At the moment Flexentral is in the process of testing a beta version of its recruitment platform.
General information about the project and ICO
Ticker symbol: GRAIN
Project Type: Business services, Smart Contract
Extended company description: Grain is an infrastructural solution enabling companies to process labor contracts through the blockchain and to automate payments. The platform aims to help businesses reduce the costs of external services for administering employees and for reducing costs of payment processing.
Grain also enables sourcing employees through its partners and to conclude a labor contract with them, to be subsequently stored in blockchain and executed via a smart contract. According to the founders, this method of organizing labor contracts will avoid delays in wage payments, secure the process and reduce costs for companies by eliminating the need for paperwork.
Public ICO Start date: 01.03.2018
Public ICO End date: 28.03.2018
Token Sales Duration (weeks): 3.9
Total number of issued tokens: 3,600,000,000 GRAIN
Tokens available (Pre-Sale + Public ICO): 1,080,000,000 GRAIN
Price: 1 GRAIN = 0.000037 ETH
Accepted payments: ETH, BTC, fiat (for those who deposit more than $10,000)
Token limit: 3,600,000,000 GRAIN
Max Goal: 40,000 ETH
Minimum Goal: 4000 ETH
Public sale of tokens is held in several stages:
(1) whitelist, registration opens: January 2018;
(2) pre-sale: 1 Feb 2018 – the end of February 2018;
(3) public ICO: 1 March 2018 – 28 Mar 2018;
Bonuses: Pre-ICO bonus — 20%
After the public ICO, tokens will be issued in early April and immediately distributed among participants in the crowdsale (Whitelist, Pre-Sale, Public ICO).
Description of the services and scope of the project
3.1. Participants and their roles in the ecosystem include the following
Companies. Using the Grain platform allows companies to reduce costs and save time on paperwork in concluding employee contracts and payroll administration.
Partners (companies connecting employers and employees) that use the Grain protocol as their infrastructure for processing employee contracts on blockchain receive 50% commission per transaction.
Employees. Regular payment of wages and other compensations.
According to the White Paper, the team plans to offer the following benefits in the course of the project’s implementation:
reduction of client companies' administrative expenses
the simplification of working with staffing tables, hiring and wages
ensuring the timely payment of wages to employees
3.2. Key components
The Grain platform is based on blockchain technology and uses smart contracts and APIs to simplify the process of concluding labor contracts.
The Grain ecosystem consists of five elements:
A contract of employment, the main element of which is the registration of an agreement about when, where and how work will be performed.
A payment mechanism: Facilitation of the transfer of wages from an employer to an employee.
Insurance for liquidity: The protection of participants from fluctuations in the values of cryptocurrencies.
Harvest: Providing employees with the benefits of the platform’s success.
Management: compliance with all regulatory requirements.
The important point is that a contract can be temporary or permanent depending on the terms of employment.
There are three types of contract:
Escrow: An employer pays for work in advance, placing the required number of tokens as a security deposit in accordance with and at the time of concluding the contract. After reaching an agreement on work performed, all parties receive payment.
This contract allows one to use insurance functions. In order to keep the exchange rate stable and to pay wages to the agreed amount, Grain holds 25% of the tokens in a wallet. In the case of growth of the token’s rate, the excess sum is placed in a security wallet; in the case of a reduction, it is withdrawn.
Currency Option: Enables one to record the exchange rate for GRAIN to fiat at the time of conclusion of the contract. This feature is available for companies that pay for work after its completion. An employer pays a premium for a facility for payment for work after its completion; this premium goes to the escrow insurance wallet.
Just-in-time payment: using the option "just in time", an employer receives a payment order for an agreed payment at the time of making the payment.
A Harvest fund allows one to save and to accumulate funds for pensions and other benefits.
The Management function will enable the following:
conducting an audit for external regulatory bodies.
providing proof of experience or certification.
using mechanisms for verifying taxes and dues.
to identify participants in Grain (for example, through cooperation with a service such as Civic).
other possible measures.
3.3. Operation of the Grain platform
Concluding a contract occurs in the following manner:
Sourcing an employee/partner/freelancer through a platform partner.
Conclusion of the contract (all details are entered in the smart contract) where the following are indicated:
the person responsible for the performance of the work.
when this work will be completed.
payment for the work (in fiat currency and GRAIN, as well as the exchange rate between fiat and GRAIN at the time of signing the contract).
consensus regarding the work performed.
At the time of transfer of a salary, an employer pays 1% (this amount can be adjusted depending on the contract) to the project fund, and 0.25% as commission for transaction (this goes to the Grain fund and to the transaction partner company 50/50).
On the basis of the white paper, we see that the project addresses several problems at the same time:
reduction of companies' expenses for the administration of employment-related matters.
simplification of working with staffing tables, hiring and wages.
ensuring the timely payment of wages to employees.
The Grain infrastructure is currently being tested by the first Flexternal transaction partner in private beta. A public beta will be available in the second quarter of 2018.
4.1. Description of the project’s market niche
As Gain is aimed at the labor and employment market and will provide smart contract-based services for this, we consider it appropriate to discuss the development of the HR market and the development of blockchain in the corporate segment.
The distribution of GDP and unemployment levels across regions
4.2. General description of the market segment and the project niche
With regard to the labour market, it is necessary to divide this into (1) permanent employment and (2) piecework.
(1) According to the market analysis provided in the White Paper, in 2016 the ten largest companies dedicated to recruitment and human resources had a total income of $18 billion.
KELLY Recruitment explains that this is due to the growth in employment, which is closely associated with the state of the global economy. According to this company's report, the global economy began to recover in 2016, and in 2018 GDP is expected to grow by 6%. This suggests that more and more people will be finding work, so the project can benefit from this circumstance.
(2) with regard to piecework (freelance work), more and more people are becoming self-employed and temporary employees. According to a study by Accenture, the self-employment rate will carry on growing.
Favorable forecasts are also present in the blockchain technology market. According to an Infoholic Research LLP report, the cryptocurrency and blockchain technology market will grow by 35.2% in the next five years. In 2017, the market volume of all smart contracts for all cryptocurrences was about 100 billion dollars [Marketing reports Hub], of which Ethereum claims 24 billion dollars. The Ethereum smart contract market CAGR is 61.5%, and this trend will continue up to 2021.
[https://www.infoholicresearch.com/report/cryptocurrency-and-block-chain-market-trends-2016-2022/], [http://www.marketreportshub.com/blockchain-technology-industry-research-marketsandmarkets.html], [https://www.kellyservices.co.uk/uk/siteassets/united-kingdom---kelly-services/uploadedfiles/united_kingdom_-_kelly_services/new_smart_content/business_resource_center/workforce_trends/talent20market20quarterly20q120201620final.pdf], [https://www.washingtonpost.com/news/wonk/wp/2017/08/08/there-are-7-million-unemployed-and-6-2-million-job-openings-whats-the-problem/?utm_term=.d68ed6b8ea06]
4.3. Current dynamics in the main market segment
Based on the presented analysis, the market for smart contracts is developing dynamically; positive trends in this field are able to exert a beneficial effect on the development of technologies in the field of recruitment, especially the recruitment of temporary employees.
There are still no big players in this market. As noted above, the market will grow due to global economic growth and the increasing number of self-employed professionals (freelance/ outsourcing/ outstaff).
4.4. Degrees of market regulation by states
Blockchain technology is still in its early stages in terms of its acceptance by enterprises. Many of the larger companies in the EMEA, Europe, the Middle East and Africa, (including Microsoft) are developing their own private Ethereum block-nodes for internal use. Probably if they wanted to obtain a product like Grain, in the long run it would be cheaper to develop this concept.
4.5. Analysis of existing problems in the industry
(1) According to the project, one current problem in the labor and employment market is the payment of wages. As shown by the Zurich SME Risk Index, more than half (52%) of British small and medium enterprises have 44.6 billion pounds of overdue wage payments.
(2) Another problem in the market is the high cost of recruitment. According to the Monster for Employers recruitment agency, this constitutes an average of $6225 per employee. [https://www.washingtonpost.com/news/wonk/wp/2017/08/08/there-are-7-million-unemployed-and-6-2-million-job-openings-whats-the-problem/?utm_term=.d68ed6b8ea06], [https://grain.io/grain-v101.pdf]
The selected segment can certainly be considered a promising one. High growth rates for technologies that facilitate the human resources process indicate possibilities for occupying a market niche.
The project team cites its partnership with its parent company as an advantage — Flexentral, a platform assisting with the headhunting process and the conclusion of labor contracts.
We would also like to point out that Flexentral is still not sufficiently popular. Traffic for the website was 1000 people over the last month. The idea of easing the recruitment process is promising, as the market has shown steady growth in recent years in this direction (section 4 of this report). However, as will be shown in section 5, a number of companies who are also developing smart contracts for fair payroll payments, quick recruitment and for optimizing these activities are already operating. We believe that this niche currently benefits from low levels of competition however, with an ensuing positive effect on these projects and their development dynamics. [https://be1.ru/stat/flexentral.com]
Competitive analysis and competitive advantages of the Project
According to a report by Delloitte, “blockchain disrupts the HR technology landscape”.
As a cross-industry disrupt, blockchain has the potential to change the technological structure of HR. Delloitte cites four examples which are aimed at changing the HR process; in particular, how the basic processes of personnel management, including payroll, recruitment, management of competence and training are carried out:
HR blockchain in payroll records.
HR blockchain in certification (proof of knowledge of an employee).
HR blockchain beyond certification (staff documentation).
HR blockchain in the management of digital processes (the use of smart contracts).
Grain will use current capabilities to solve the above problems through the implementation of smart contracts as well as through payment protection insurance, thereby optimizing employer expenses and making the payment process more transparent.
Experts in the HR industry say that blockchain could change the labor market; it will facilitate the workflow process. In this regard, we believe the popularity of Grain will increase.
Now we will take a look at other examples of use of blockchain technology for attracting and managing staff. In the course of our study, we identified the following competitors:
Сhronobank — a platform offering the wherewithal for sourcing and hiring workers as well as concluding labor contracts.
Ethearnal — a platform where employers and freelancers sign smart contracts with reputation and money in conditional deposition, and if necessary can call upon a decentralized system of moderation.
HireMatch – a platform for sourcing and recruiting employees with the help of smart contracts intended to reduce company costs.
Let us discuss these one by one.
(1) Сhronobank.io is a very successful project, having raised $5.4 mln at ICO in February 2017. The average attendance on the platform is about 200,000. However, in addition to providing services in the field of recruitment, the platform also offers financial services: transactions, bank cards, proprietary tokens etc.
(2) Ethearnal, like Grain, is preparing for its ICO. However, the project is still not sufficiently popular among the community for this. Ethearnal, unlike Grain does have agreement partners; its basic principle is P2P interaction.
(3) Hirematch has completed the first stage of its ICO, having collected $4 million. Platform traffic is about 25,000 people per month. The platform is more focused on jobseekers, and assists in the search for an employer, arranging interviews and concluding contracts.
All these competitors are more focused on searching for and hiring employees; Grain is more focused on the technical side i.e. smart contracts. The lack of additional functions such as rating an employee, additional financial instruments, etc. may cause Grain to fall behind the competition.
In general the market is quite open, as blockchain is only just now gaining acceptance. We believe that the project has every chance to occupy a significant share in its target market. An obvious advantage is that competitors are at a rather early stage of development and do not have an overwhelming impact on market processes.
Team and stakeholders
The team consists of 10 people as well as 5 advisors. Information on the core members of the team (LinkedIn) is as follows:
Onno Hektor (LinkedIn) — CEO and President of the Board. Formerly co-founder of FleXentral, tao.company, Atlantic Crossings. All of these companies along with Grain are involved in hiring staff and signing labor contracts.
Arjo van Ramshorst (LinkedIn) — Founder. CTO at FleXentral, formerly software developer at ServiceHeroes, information technology consultant at ITBG DSC.
Erik Koster (LinkedIn) — Expert in blockchain strategy, member of the Board. CEO at Global Screen B. V., member of the board of Flexentral; previously project manager at Quince B. V.
André Bonvanie (LinkedIn) — Member of the board. President and CEO of NG Group, co-founder of FleXentral, General Manager EMEA of Sitrion, CEO of tao.company.
On Linkedin most of the team members indicated their affiliation to the Grain project. The team also has a blockchain expert and an expert in smart contracts. Previously, the community had questions concerning the technical team, however it now has the relevant specialists. The management team includes experts in finance and law, marketing and PR.
There are no specialized labor or employment law solicitors, but we believe that this issue will be addresses through the parent company Flexentral (https://www.flexentral.com/).
The Grain founders are three experienced professionals, two of which have experience working for Microsoft and another one with experience in blockchain consulting.
The parent company staging the ICO is Flexentral — the Grain division was established as a separate entity in the 2nd quarter of 2017. It is a platform that helps with the headhunting process and with conclusion of labor contracts.
Grain received its first investments in the second quarter of 2016 as part of its parent company Flexentral, from (1) Technofond MKB Flevoland — a seed fund for startups from the Netherlands: 500,000 Euro; and (2) Flexentral Holdings — the founders of the Flexentral project: 500,000 Euro.
In the fourth quarter of 2017, the project held a private pre-ICO round for the Grain project (for Friends&Family), which gathered 200,000 euros.
Laurent Delaporte (LinkedIn) — Board member. Entrepreneur, investor, member of the board at Operating Partner, previously member of the advisory board at ADYOULIKE, FOURPOINTS Investment Managers, CEO of NetMediaEurope.
René Hendriks (LinkedIn) — Head of sales department at Avantage; founder, owner and business consultant at GELION, founder and CEO at OCENTRI B. V.
Temme Sikkema (LinkedIn) — Owner of Hut & Co. Registered Accountants, formerly internal auditor for Friesland Bank, Van Lanschot Bankers.
Roberto de Freitas (LinkedIn) — Specialist in asset management at Verzekeraar, founder of Defactim Pensioen Consultancy BV Actuariële Consultancy en, Defactim.
Ralph Jacobs (LinkedIn) — Lecturer at Nyenrode Business Universiteit, co-author of "The Secret of Agile Organizations."
The advisory board of the company consists of Temme Sikkema (Professor at the University of Groningen), Roberto de Freitas (specialist in the management of actuarial risk — actuarial expectation calculated using the statistics over a number of years) and Rene Hendricks (serial entrepreneur of several early startups). We believe that the advisory board is known in the target market, which will help the project to expand its scope.
The main characteristics of the Grain token are as follows:
Token type: Grain — a utility token.
GRAIN is the platform currency.
The token is used within the platform for payment of earnings, payment for transactions and for commissions.
Token type: ERC-20
GRAIN is a utility token and is not subject to SEC regulations.
Earlier participation in the ICO provides a lower token price. The most favorable period for purchase is the pre-ICO.
The production and distribution of tokens will be implemented in the beginning of April 2018. There will be no additional issuance, and any tokens that have not been sold during the ICO will not be issued.
The sale is carried out through registration (White List) with KYC procedures.
Due to legal restrictions, residents of the following countries cannot participate in this project's ICO: Bosnia and Herzegovina, China, Cuba, Ethiopia, Iran, Iraq, Nigeria, North Korea, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, Ukraine region of Crimea, the United States, Vanuatu and Yemen.
The total supply will not exceed 3,600,000,000 Grain. The maximum number of tokens available for sale will account for 30% of the total supply. That is 1,080,000,000 tokens. 25% is reserved for support of the escrow fund, 24% for the general fund. the bounty program will be 1%. Grain reserves 5% for the team and 15% for advisors and partners.
Analysis of factors affecting the future price of the token
The following are factors that will affect the token’s price in the long, medium and short term.
Scalability of embedded technologies in the long term:
As the project is based on managing and paying remotely-based employees, it can operate worldwide without restrictions.
A change in international law relating to labor contracts and legislation on the use of smart contracts will significantly increase the attractiveness of the project to consumers.
Assessment of the project’s development plans and the interest of developers and companies in the project in the medium term:
we believe that the project should formulate its plans for the scalability of the platform in more detail, since difficulties with labor and employment laws in different countries might arise. However, as already noted, industry experts (Delloitte) predict growth for this segment.
we believe that the success of the project will depend on the number of clients and partners on the platform. It is therefore necessary to conclude a greater number of partnership agreements.
Assessment of the actual utility of the token in the coming months, and the popularity of the project:
The token will not be used as yet, as the project still has no publicly open platform.
Platform launch is scheduled for April 2018.
The active development of blockchain technology will lead to the launch of a large number of platforms. In this regard, Grain should be prepared for increasing competition. The company should focus on its marketing campaign, the involvement of partners and development of the product itself, as competitors at this stage can offer more comprehensive services (p. 5).
Investment risk analysis
In this section, we present weaknesses for the project that could potentially adversely affect its implementation. We have determined the following risks:
Conclusion of labor contracts on the basis of smart contracts is not officially recognized in most countries.
The wide acceptance of Bitcoin payments directly through online wallets, which could complicate matters given that the project functions via Ether.
The high volatility of cryptocurrencies; however the project is planning tools for fixing the exchange rate of tokens to fiat money at the time of signing a smart contract.
the team states that the project will be based on smart contracts; however, it is currently not possible to see the code or test the platform.
it is not known if the platform will have a trouble-free launch (public tests have not been conducted).
difficulties with connecting the system to accounting (financial) programs and work time monitoring programs.
The system for connecting to ERP and other traditional business systems has not been disclosed.
Risks for investors:
Only 30% of the total number of tokens will be available to traders, which means that most of the tokens (15% + 5% + 49% = 69%) will be in the hands of the company and their 'employees' in the community. According to industry analysts, this has been a problem for Ripple (XRP); although blockchain implies decentralization, the project will have a "centralized" approach.
Lack of cooperation agreements and the low popularity of the project could mean that returns on investment are below target figures.
As noted by technical support staff, there are many scammers in online discussions of ICOs (potential crowdfunders need to be careful).
implementation of the project (risk is associated with the internal contradiction between the team and the objectives of the project, however, these factors do not currently manifest themselves).
You can contact the developers through the following links:
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.