We assign the INS project a "Positive" rating and recommend buying the tokens of the project as part of a diversified long-term portfolio of crypto assets.
The founders are trying to revolutionize the food retail market in the world’s largest cities, bypassing shops and hypermarkets in the supply chain of goods to the end buyer. This idea is not new, but its implementation on blockchain has a genuinely greater chance of success than traditional technologies.
The team has been engaged in the food retail business in Russia for several years and has already launched its own start-up, Instamart. There are well-known industry experts among advisors to the project, for example Ilya Yakubson, the former president of Dixi, one of the largest neighborhood store networks in Russia.
The risks of the project lie primarily in the technological and legal fields.
Firstly, the idea itself is both ambitious and utopian: the team will have to overcome a strong lobby of intermediaries in food retail.
Secondly, the project model assumes the active movement of INS tokens from individuals to legal entities, whereas current prospects for recognizing cryptocurrency as a payment instrument are not defined anywhere except Japan.
The INS Token is a utility token; it will be used as a payment tool in the project infrastructure. Token demand is likely to exceed supply as product manufacturers unlike consumers will be required to buy tokens on their INS balance to form reserves for the payment of rewards.
The marketing campaign for the ICO is quite active. There are reasons to believe that by the beginning of the crowdsale, an interested community will be formed around the project.
Nevertheless, the idea of the project looks promising, the concept of the token is valid and the hard cap of the project is adequate; therefore we can recommend INS tokens for purchase as part of a diversified long-term portfolio of crypto assets.
Ins.world is a project that aims to create an ecosystem for the direct connection of end users with manufacturers, bypassing retailers. The system will be built on blockchain. It is expected that consumers will be able to save up to 30% compared to the purchase of goods in the supermarket and manufacturers will be able to directly communicate with each customer, promoting their goods in a targeted manner. Manufacturers will be able to independently locate and sell products at their own price and create loyalty programs; sales will take place via the website and mobile application via smart contracts, which will reduce risks and costs. The founders claim support from major manufacturers such as P & G, Unilever, MARS, Valio and PepsiCO. It is also planned to connect small local producers and farmers.
INS, cryptocurrencies and tokens will be available for settlements between users in addition to fiat.
ICO start date: December 4, 2017
ICO end date: December 25, 2017
Token: INS, ERC20
Soft cap: 20,000 ETH
Hard cap: 60,000 ETH
ICO price: 300 INS = 1 ETH
Minimum Buying Transaction: 0.1 ETH (30 INS)
Maximum Buying Transaction: -
More 100 ETH
10 - 100 ETH
Less 10 ETH
2 - 7 days
Accepted payment: BTC, ETH, LTC, DASH, USD (bank transfer)
Total emission: 50,000,000 INS
Distribution of funds:
Research & Development
Marketing & Sales
Admin & Operations
Token Issue Date: 2 weeks after the ICO
Vesting: Founders have a 2 yr lockup with four 6-month vesting periods
Advisors’ and early supporters’ tokens are locked for 6 months
The ecosystem of INS is a four-sided trading platform where each participant can interact only with two other participants.
The INS platform will provide an infrastructure for the interaction of suppliers, buyers, operators and employees of distribution centers and courier services. Buyers will search for products from manufacturers, order and pay for them on the website or via the INS application. They can also participate in promotions, provide feedback and make estimates.
Also, there are operators of distribution centers in the INS ecosystem - these are owners or those who rent premises where employees of distribution centers accept goods from suppliers, collect them according to customers' orders and transfer them to a courier service. INS Foundation will seek independent operators of distribution centers which will either hire their workers at distribution centers or provide a platform for independent participants.
An account should be created on the INS platform to participate in the ecosystem. During registration, the system will create a user profile and a wallet. This wallet will have access to the decentralized INS database and interaction with other participants via smart contracts, for which the INS Foundation commission will be charged for a mediation of 1%. Users will be able to buy INS tokens for fiat or crypto currencies.
Immediately after the ICO, all buyers will receive INS tokens exchanged for ERC20 standard on the Ethereum platform. In the event that INS issues tokens on its own technology, tokens on ERC20 will always be accepted and will be available for 1 to 1 exchange.
Currently, several platforms are considered as a possible base for the INS ecosystem: Ethereum Raiden, EOS, Tezos and Exonum. The INS Foundation declares that they are planning to use the most proven and scalable open source technologies and constantly look for alternative ways of implementation. The main requirements for the platform are support for smart contracts, predictability, stability and operability.
It is assumed that the system will be heavily loaded. Currently, blockchain platforms such as Ethereum do not have a high enough transaction speed, and prospective technologies are still only at the development stage. For this reason, the INS Foundation is also considering the option of developing its own INS blockchain platform in the future. According to the founders, it will be possible to achieve required speed relying on a given list of trusted nodes. Proceeding from the fact that their nodes are recognized as reliable, it is planned to apply one of the much faster consensus algorithms from BFT algorithms (HoneyBadgerBFT / Zyzzyva / others). The condition of the INS blockchain will be regularly tied to the most popular ledgers for smart contracts (ETH and ETC at least), i.e. proof of system condition and correctness of transactions can be verified via Ethereum smart contracts.
Smart contracts are an important component of the ecosystem, greatly improving reliability and reducing the risk of incurring losses for participants. A simple case for their use is the following: after payment for goods by a buyer, the money is frozen in a smart contract, awaiting confirmation of successful receipt of the order. Confirmation comes in the form of an electronic signature on the private key which was used to create the order and that is stored in the wallet.
The INS platform will provide several formats of smart contract for participants. Other smart contracts will also be widely used:
- Order contracts can be created by suppliers for servicing and tracking the state of goods in real time - from the moment of payment to the delivery to the buyer.
- Reward contracts will allow them to promote their goods more effectively, providing rewards for loyal customers.
- Voting contracts will be created in conjunction with suppliers and the INS platform to gather consumer opinion about new supplier products and suppliers themselves.
The founders have great experience in the industry. In the documentation they have conducted a thorough analysis of the consumer goods market and its online segment, at which the INS project is aimed.
According to a Persistence Research article published in December 2014 (https://www.persistencemarketresearch.com/mediarelease/food-retail-market.asp), the volume of the FMCG industry was $5.6 trillion in 2013 and should increase annually by 6.1%, reaching the figure of $8.5 trillion in 2020.
The food market is considered to be resistant to changes in the economic situation since there is always a need for food.
An essential feature of the FMCG retail market is that most countries have several national retail networks that occupy most of the market. In particular, in the UK 4 retail networks cover 76% of the market.
The INS project is aimed exclusively at the online segment of the FMCG market. According to an IGD study [http://www.essentialretail.com/ecommerce/article/55950eab926ba-comment-china-dominates- global-online-FMCG-markets] the global online FMCG market grew by 16% in 2016.
The most developed markets are expected to increase twofold by 2020. The ten largest markets are forecast to grow from $98 billion in 2015 to $290 billion in 2020.
The trend for volume increase in the online FMCG trade is gaining momentum. According to Unata’s 2017 FMCG eCommerce Forecast, the number of online FMCG shoppers in the US in 2017 will increase by more than 60%. The number of respondents who are ready to make these purchases is about 31%.
The idea of linking producers and buyers directly is not new, but it is blockchain technology that makes it possible to implement this. Currently, there are no analogs of the INS platform.
The direct competitors of the project are the existing retail networks, as INS aims to take away some of their clients and profits. It should be understood that the project is aimed at that part of the market that is responsible for online FMCG trade. In this segment, the INS project is innovative and does not have direct existing competitors.
The INS project will potentially struggle with retail networks for the right to be a platform that connects buyers and manufacturers. The FMCG market demonstrates stable growth and resistance to economic shocks. It also tends to change its structure in favor of increasing the share of online trading. This is a competitive advantage of the INS project over existing business models for retail networks.
The main competitive advantage of INS over retail networks is that its role in the process of interaction between buyers and manufacturers is minimal. INS takes on the logistics function but does not interfere with competition between manufacturers for customers and does not limit the ability of buyers to choose from all available brands.
Currently, the advantage to retailers which will prevent INS quickly capturing most of the FMCG market is the usual experience and loyalty of buyers when the choice of goods occurs at the physical level in the nearest store or supermarket.
At the same time, an important advantage for INS is a deep knowledge of the market. The project team has extensive experience in evaluation of retailers and delivering products from Instamart chain stores which have been operating in Moscow since 2013.
The founders of the project - Peter Fedchenkov and Dmitry Zhulin - have extensive experience in IB, retail and private equity; they organized a service for delivering products from Instamart chain stores in Moscow in 2013. Currently, the company has more than 200 employees and many corporate clients.
Peter Fedchenkov - Co-Founder and CEO – worked at Goldman Sachs, Baring Vostok Capital Partners, Credit Suisse and IBM.
Dmitry Zhulin - Co-Founder and Strategy – worked at Rothschild and supervised the transactions of Private Equity in VTB Capital.
Dmitry Khovratovich - Blockchain and Smart Contracts – has extensive experience in research in the field of crypto currency and blockchain. Studied at Moscow State University and the University of Luxembourg. Currently continuing work in ICO BOX.
Michael Schmidt - US Expansion - has experience in promoting new products (General Electric, Waylens inc.).
Fedor Lisitsyn – Manufacturer relationships - the main work experience is concentrated in the field of business analytics (McKinsey & Co).
Maria Lapuk – PR – well-known PR specialist with 10 years of experience (MTS Group, Odnoklassniki.ru, IIDF, co-founder of Vinci Agency), has many professional awards.
Dmitry Bobylev – Technology – Experienced developer, former CTO in Do Interactive.
Oleg Litvin - Senior Team Lead.
Nikolay Lipkin – Marketing – was engaged in marketing at Foodpanda (food delivery service), has extensive experience in mobile marketing.
Pavel Glukhov – Operations – former COO at Hermes DPD, more than 15 years of experience in delivery of goods.
Daniil Galkin – Customer Service.
Frank van der Tol - Europe Expansion - Experienced FMCG & Retail professional (food and non-food). Over 15 years experience in FMCG/Retail, eCommerce and online market places. Previously with Accenture. Erasmus University Rotterdam Economics MSc, TIAS School for Business & Society MBA.
Prabhakar Reddy - Asia Expansion - Serial entrepreneur, with 9+ years of experience running successful businesses in India, Dubai and San Francisco. MBA from Harvard Business School
Product advisor - Eyal Hertzog (experience in the field since 1998).
Community advisers - Michael Terpin (founder of Transform Group, PR company with more than 40 successful ICOs; co-founder of BitAngels; Advisor at ICOBox), Moe Levin (CEO Keynote) and Sebastian Stupurac (has worked with blockchain technology since 2013, currently employed at WINGS Stiftung).
ICO advisors - Dmitry Filatov (ICORating, ICOShark, Topface), Ilya Perekopsky (Blackmoon Financial Group, Vkontakte ltd).
PR advisor - David Wachsman (founder of the largest ICO PR agency. Some customers: Dash, Iconomi, Aragon, Kraken, Lisk and Kik).
Academic advisor - Dr. Rawi Abdelal.
The whole project team has significant experience in the retail sector and looks more than qualified. We have not encountered any negative information on team members. However, we note that Dmitry Filatov is among the advisors of the project, representing among other things the ICOShark investment fund. Participation by representatives of crypto funds as advisors of ICO projects is treated by us as an additional risk for tokenholders, since it is always possible that the fund has invested in tokens at an early stage with a significant discount and will be interested in fixing profits after the beginning of token circulation in the secondary market.
The experience of the founders accumulated earlier when working on Instamart will contribute to the development of the INS product.
Within the framework of the project the founders singled out these main goals:
- Transfer of the service to blockchain.
- Applications and website for users.
- Development and expansion of the ecosystem.
The geography of the expansion is presented below. The project is planned to be developed from Asia (Tokyo and Seoul). These cities have no legal restrictions on the use of cryptocurrency. Based on the general scheme for project development the final product will appear at the end of 2018.
The intended clients are individuals and manufacturers of everyday goods. The company itself is a platform where they can make transactions without the additional filter of retail networks. At the same time, according to the founders, the price of goods for buyers will be up to 30% lower than on existing retail networks.
The largest blockchain-focused PR agency, Wachsman PR, is engaged in PR for INS in order to attract investors for the ICO. A client list for Wachsman PR can be found at http://wachsmanpr.com/our-work/.
The company is publishing articles in specialized publications to attract interest in the project. At the time of writing, articles about INS have been published in more than 280 publications: English, Asian and Russian. There are articles in Huffington Post, The Merkle, MorningStar News BTC, Coin Speaker, Coin Idol, Entrepreneur Inc, The Telegraph, The Sun, Business Insider, and many others . There are planned articles on other crypto sites and journals.
As for social media, the project has a chat channel on Telegram (more than 5000 followers) and on BitcoinTalk (more than 110 pages).
INS has signed memoranda of trust with global players such as Unilever, MARS, Campina, Valio and Reckitt Benckiser. A memorandum with Coca-Cola is expected to be signed. This confirms interest in the project from large manufacturers.
In general, it is notable that the project ICO is being promoted quite actively. It is likely that by the beginning of the ICO the project will gain a loyal community.
INS charges a commission at the rate of 1% of the value of products sold on the platform. Commission is paid by the manufacturers.
The team does not cite information on operating expenses nor forecasts of turnover in the documentation, due to legal recommendations. This is unfortunate, as it does not allow a potential investor to independently calculate the viability of the chosen business model.
We note that the team provides Planned Fund Allocations in the white paper based on a hard cap of $18 million:
When the soft cap (20,000ETH) is reached, the distribution of funds will be the following:
The $2.6 million from the tokensale which the team is planning to spend on Admin and Operations financing will support the viability of the platform in the period up to achievement of self-sufficiency. These costs are estimated over 3 years.
Reaching the hard cap of $18 million will be enough to fully implement the project, according to the team. If not achieved, obviously less money will be channeled into the launch in different cities and regions. Apparently, the team will have to focus on a narrower list of locations.
Thus, the presence of a soft cap protects early investors from the risk of a shortage of funds for project implementation. However, from the point of view of the investment attractiveness of the token, the closer the results of the crowdsale to the hard cap, the more the team will be able to expand into new regions.
The founders admit to a high level of risk with investing in INS tokens. A significant part of the risk described in the white paper have the character of a disclaimer, since they can relate to any project involving cryptocurrencies and using smart contracts, but the main significant risks are related to regulation in different jurisdictions.
The project model assumes active movement of INS tokens from individuals to legal entities, but currently it is unclear how legislation in different countries will develop in the regulation of cryptocurrencies. The project objective is not to suffer from this; however in the case of regulatory tightening or even a ban on the use of cryptocurrencies in individual countries, the creators will have to significantly redesign the business model of the project and the price of INS tokens may suffer greatly from this.
As can be seen from the market review, intermediaries between buyers and manufacturers control a vast proportion of the multibillion dollar FMCG market, i.e. retailers. The project aims to take away part of this market and as a result to reduce revenues and influence from retail networks. This means that in the implementation of the goals set, the team will be actively opposed by a powerful lobby which would be potentially able to collude with current governments and change regulations and laws.
Again, we see the risk in the absence of information about the parameters of the platform economy.
We also identified risks for tokenholders associated with the presence of representatives of investment funds amongst the advisors specializing in investing in crypto assets.
INS tokens can be used by consumers to pay for products sold on the platform and should be used by manufacturers to pay for all types of reward. Moreover, producers must freeze the share of revenues from the previous month in order to guarantee payment of all rewards.
Thus, the following picture emerges: manufacturers' products are sold for fiat, BTC, ETH and INS and the share of revenues that must be frozen is calculated from the total revenue. Accordingly, token demand will be maintained regardless of whether consumers will use them to pay for goods: demand will be provoked either by consumers or by manufacturers who will be forced to convert fiat revenues and/or revenues in BTC and ETH into INS.
The manufacturers will naturally have production and other costs which must be financed from their revenue. This means that most of the revenue will be converted into fiat. However, given the diversification of income currency, as well as the illiquidity of INS tokens in comparison with BTC and ETH, it is likely that INS tokens will be converted last. Thus, there is reason to believe that manufacturers will not sell the entire amount of revenue nominated in INS tokens to the market.
Representatives of INS predict that no more than 20-30% of revenue in INS tokens will be sold. This is overly optimistic from our point of view; however, we agree that supply will be less than demand, provided that the platform gains popularity.
INS tokens stored on the balance will participate in further circulation within the system. Manufacturers will accrue rewards for consumers in these tokens, and consumers in turn are more likely to return them to the accounts of manufacturers by purchasing new products.
The concept of the token, from our point of view, is quite successfully worked out. The token has a long-term value growth potential which will depend on the growth of turnover within the platform. At the same time, token demand will exceed supply due to diversified revenue structure of the manufacturers. Thus, we recommend participation in the INS ICO, subject to acceptance of the risks identified in this review.
Disclosure: Dmitry Filatov, the founder of ICORating, is an advisor in the INS project.
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.