Omnitude Rating Review
|Start ICO||28 Mar 2018|
|End ICO||31 May 2018|
We assign Omnitude a “Stable+” rating.
The concept that the project is aiming to realize is innovative and shows promise for the e-commerce industry. Omnitude’s product will be necessary for trading companies in this sector, given the popularization of blockchain-based solutions in all areas of trade. We foresee a strategic increase in demand for such solutions within a few years.
The ecosystem the project is building appears holistic and balanced. Each participant type has their own role and a motivation for working with the platform. The use of tokens and blockchain technology is justified, which distinguishes the project from competitors; tokenization is not just a means of attract financing but a necessity in creating the platform.
The problems that the future product is designed to solve are genuine, not contrived, and the proposed solution looks logical and justified.
The team seems competent and experienced, which offers confidence that the product will be brought to fruition.
The open code for the platform provides free access to the product to any member of the network who can adapt the platform to their needs. Future product development is not limited to the efforts of project team members alone but also enables users to participate in the product’s functioning and customize it. This is an important indicator of openness and indicates a high probability for risk-free implementation.
However, there are no specifics about the future product, its degree of development is at a low level and it is not possible to estimate the implementation time. We see different means of monetizing the project and think that there will be no difficulties with this; however, the project has not yet been definite about this.
Regarding the latest update, the project has presented its proof-of-concept (POC). We believe this to be a big step towards the creation of a stable service that shows promise, but this solution is not a panacea removing all concerns about the project’s future and its realization. Thus, its services are in need of further work and refinement.
In addition to the above, success for the future product depends on its adoption by the traditional, conservative e-commerce sphere. We also see a dependence on the "economies of scale" of introduction of the platform to the industry and the dynamics of the price of the token in the medium and long term.
The above combination of factors enables us to draw a conclusion about the prospects for the project and assign it a «Stable+» rating.
General Information about the Project and ICO
The Omnitude project offers the creation of a universal blockchain-based platform for transactions between online stores, buyers, suppliers and logistics companies. Existing e-commerce systems, various corporate systems and supply chains can be integrated on this platform quickly and easily - what would normally take weeks and months, can be done far quicker with this technology.
The project is run by an organization of the same name registered in the UK (https://beta.companieshouse.gov.uk/company/11153392).
Omnitude is an open source project that enables developers to create and implement their own solutions within its ecosystem. Such solutions can be integrated via an API which will provide the ability to create personal applications and a structure for interaction between participants in e-business within the project ecosystem.
In general, the project is based on a number of traditional advantages for blockchain technology that ensure its popularity: Openness to participation but protection from intruders; transparency of history and transaction data together with preservation of confidential information and participants’ privacy.
The figure below shows a schematic structure of the future project ecosystem:
The problems it solves
The project is aimed at solving several key problems for the e-commerce market. More information about the services provided by Omnitude will be provided in the Product Services section. Here we will list only the project’s objectives.
Reducing the possibility of fraud in e-commerce
The project aims at solving the problem of fraud in this sector. The product’s functionality will prevent fraudulent actions using legitimate accounts. Omnitude’s Single Identity and Single Reputation will help reduce the most usual form of fraud, identity theft.
Introducing honest and transparent accounting systems in production and supply chains.
Existing supply chains and their financial provision are often inefficient and inaccurate as well as time-consuming and expensive. Automation of these processes through blockchain will avoid difficulties which often arise due to the large proportion of manual control processes. Omnitude’s supply chain solution will enable individual items or shipments tagged with identifiers to be tracked as they move along the supply chain. At key points, an item’s location will be recorded and written to Omnitude’s blockchain. Payments will be released to shippers or suppliers as particular milestones are reached.
Implementation of unique IDs for use on any website, online store, etc within the Omnitude ecosystem. Proof of Interaction (POI) aims to prove that a reviewer has a verifiable history of interaction with the merchant they are reviewing.
Fake reviews and false information disseminated by entrepreneurs and their competitors creates great difficulties for targeting the e-commerce market. The ability to identify system users accurately will prevent such issues.
Minimization of costs
Online payments always require a certain (sometimes tangible) commission for their operation. The project team promises to reduce commission for transactions on the system through Omnitude’s alternative lower-cost, cryptocurrency-based payment mechanism.
Assistance in the integration of blockchain technologies into corporate systems such as ERP and WMS.
Though CMS, ERP and WMS integrations can be extremely expensive and take months to deliver, Omnitude’s plug and play blockchain technology enables the quick and cost-effective integration of these systems.
How the product will be created
In general, the product will be implemented in two stages:
- Creation of the Omnitude platform
- Creation of applications adapted to specific areas of business
The project roadmap shows the intended development process by correlating the future progress of the technical and commercial aspects at different stages. Let us consider the team's plans for the current year in general terms:
- In the 1st quarter of 2018, the website was launched and the white paper was developed. The pre-sale was carried out and the ICO is being planned. The alpha version of the platform is expected to be launched.
- In the second quarter of 2018, the ECOM token will be listed on exchanges. Working with partners and announcing technical partners for the project is also planned.
- Q3 2018: Testing of the platform and its individual components.
- Q4 2018: The end of testing and a launch of the ecosystem.
Completed steps towards product realization
The project has released its MVP, which is a partly-working test version of what Omnitude intends to develop in the near future. This is contained in their Proof of Concept examples described below. Effectively the team is showcasing 4 aspects.
A customer will be able to:
- Register on one of three mock eCommerce sites as a customer and provide name, email address and password.
- This profile creates an Omnitude ID (OID) that will follow the user around whichever Omnitude-enabled site he uses, enabling an easy single sign-in using these Omnitude credentials.
- Test dataflows between systems using Hyperledger, such as viewing items in stock (via a call to a WMS) and mock-purchase them, pulling the item out of stock and reflecting real-time stock levels, as well as have stock replenished in the warehouse via a live smart contract that will execute to ensure new stock is ordered.
- View a dashboard interface showing full future platform functionality as well as the Hyperledger code and tasks triggered during smart contract replenishment.
The project’s POC demonstrates much more than Identity Protection and data exchange between legacy enterprise systems and blockchains. There is a fundamental underlying visibility starting with tagged products at all stages of a transaction, whether it be full order quantities, the point the transaction has reached in the process, or whether goods were picked up on time. Benefits of this visibility include better just in time demand planning including all outlets and returns. Greater visibility of actual events in the SMART CONTRACT bring the dispute process to a clearer, fact-based resolution with reduced wastage and better quality control. Paper-based systems across multiple parties become obsolete, and thus time is saved throughout the supply chain. This is truly enabled by the Omnitude platform; the POC merely touches the surface, yet shows the potential of the full platform’s development. Change management is critical for the Supply Chain to ensure current processes are optimized for the blockchain and tested prior to implementation.
A merchant will use tokens (ECOM) to pay:
- a customer for submitting a review
- a customer for points earned on a loyalty program
- an affiliate or a referrer whenever conditions have been fulfilled
A customer will pay tokens (ECOM):
- to a merchant, if that merchant writes encrypted POI specific data about the transaction in question
As further proof of the team’s vision, Omnitude’s platform can also deliver exchange functionality. For every e-commerce site that runs the Omnitude middleware layer, there could be a live ledger of customers wishing to move their cryptocurrency into fiat or their fiat into cryptocurrency; this transaction can take place through matching both ledgers simultaneously. This enables exchange between these currency categories at an agreed rate. This rate will be set by those wishing to liquidate their cryptocurrency and those wishing to move their funds from fiat to crypto. With the volume of transactions that will be flowing through the Omnitude platform this could very quickly become a reality, especially when you back it up with the transactional speed of Hyperledger Fabric that supports our blockchain. The result would be an instant exchange.
The two scenarios (use cases) offered with the initial release of POC are described here:
The first scenario (https://portal.omnitude.store) demonstrates how the Omnitude system will work if the customer is a supply chain anmager and stock is running low in the warehouse… based on the customer’s forecasting a new stock order needs to be placed. This portal enables the customer to make an informed decision on order quantities based upon multiple inputs from the Omnitude Platform. Omnitude enables data flows from other Enterprise Systems already in place. This is a proof of concept, so not all functionality is enabled at present. Extra functionality will be added as the development continues.
The second scenario (https://demo1.omnitude.store/) demonstrates how the Omnitude system will work if a customer uses the Omnitude single sign-on across any Omnitude-enabled site. A customer sets up his Omnitude single sign-on. This is a proof of concept, so the option to add additional personal preferences such as sizing, address and a whole host of other details are not yet active. There are three Omnitude-enabled sites in this demonstration. Once the customer has received his confirmation email after registering he will be able to sign in to all three sites with his Omnitude single sign-on.
The project has received wide media coverage. There are various articles about the project on resources such as Cryptocoin.news, Forbes, Medium, CryptoCurrencyNews, Cryptovest, Hacked, Bitcoinist and others.
It is worth noting the novelty and potential of the main idea of the project. The use of blockchain technology in e-commerce is a logical solution with great potential that will eliminate existing difficulties in e-commerce and increase its safety and effectiveness.
We highly appreciate the team’s eagerness to show a working MVP and POC examples; however, we believe that this is not enough to gain a complete understanding of the operation of specific services in the future. By presenting a POC, the team shows that their idea can be implemented in principle, but it should be understood that there is a big difference between the implementability of the idea and its actual realization, moreover a demand for it in the market. Regarding the team’s experience, we have no doubts that they can professionally implement various solutions on the basis of their platform; however, we have some concerns about their relevance and viability.
ICO start: 28 March 2018
ICO end: 25 April 2018
Token name: ECOM
Token standard: ERC20
Soft cap: 10,000,000 USD
Hard cap: 20,700,000 USD
ICO price: 1 ECOM = $0.46
Minimum Buying Transaction: $150
Maximum Buying Transaction: $50,000 per person per day
Accepted currencies: ETH, BTC
Unsold tokens will be burned. Purchase of tokens will require pre-registration and undergoing a KYC procedure
Token emission: 100,000,000 ECOM:
- 50,000,000 – token sale investors
- 5,000,000 – pre-sale investors
- 12,000,000 – team and advisors
- 33,000,000 – Omnitude foundation
Allocation of funds:
Vesting: Team and advisor tokens are vested based on time with 20% being released each year for 5 years.
Description of the Services and Scope of the Project
As already mentioned, the product will be a blockchain-based platform, acting as universal software. This software will enable various e-commerce users to take advantage of blockchain technology without changing or rebuilding the infrastructure of their activities.
The first stage of the project development involves building the Omnitude platform. Then ecosystem participants will be able to create applications based on the completed platform, adapted to their business needs.
The main thrust of the Omnitude platform is to be an intermediary between existing systems, and to facilitate the rapid and effective deployment of business structures based on this platform.
It is worth noting in advance that the developed platform’s functionality provides a number of advantages interconnected through a single blockchain solution, therefore partly overlapping each other according to the principle of implementation.
Opportunities the service offers to e-business participants are described below:
The problem of fraud is acute in the e-commerce industry. According to research by 1WorldSync, 45% of vendors and suppliers lose about $1 million when introducing new software into existing structures. When making payments online, fraud-based losses reach 0.5% of gross sales. Sellers’ losses from the abuse of credit cards are about $25 billion per year. Identity fraud using legitimate cardholders’ credentials also causes significant damage to trade.
To solve the problems of fraud and identity theft in the field of e-commerce, Omnitude provides all its users with a single identification based on blockchain technology. The project promises to liberate traders from the need to keep and protect local databases containing personal information about their customers. Such databases have a risk of being hacked. The risk of fraud associated with requirements for refunds is also reduced by minimizing the use of credit cards. Omnitude will also exclude the possibility of fraudulent actions on the part of sellers (write-offs of funds and further transfer denial) by creating a system of step-by-step write-offs based on the current stage of delivery of goods.
Building a transparent supply chain:
The supply chains consist of two components: material and financial transfers. Such movements of goods and money have a number of issues.
Difficulties in this area are related to providing up-to-date information on the movement of goods and ensuring their proper quality. Financial support for ongoing transactions also suffers from inefficiency due to the abundance of manual processes in management, time and commission costs and possible errors.
The Omnitude platform is aimed at addressing the inefficiency of the supply chain by creating a system that ensures issuance of payments according to the stage of delivery of goods. This system will track deliveries in stages through the supply chain and ensure the accuracy of a seller's claims. The financial aspect will also be serviced by the blockchain, adapted to work with the supply chain.
Unambiguous identification of ecosystem participants:
The problem of identification in the field of electronic commerce also causes a lot of difficulties. On the one hand, there are issues with obtaining information about users (users often have to go through an identification procedure on different sites). On the other hand, the problem of identifying and maintaining an image in the market is extremely important for electronic traders - their reputation is largely dependent on feedback systems, reviews and other kinds of feedback from consumers. Often, positive reviews are created by the company itself and conversely, negative reviews are written by market competitors.
Among other things, the Omnitude platform is aimed at eliminating such difficulties in e-commerce. Members of the Omnitude ecosystem are assigned identifiers (OIDs) that uniquely identify them. All user IDs and their profiles are stored in the Omnitude blockchain, so whenever they want to make transactions with other traders on the platform, their identifiers and preferences are automatically checked, and the transaction ends instantly. This significantly speeds up the process of making purchases, increases user loyalty and facilitates merchants being able to verify user data. Different types of participation in the identification system for both users and traders involve appropriate remuneration in ECOM tokens. Omnitude is also developing a system that avoids fake customer feedback via proof of interaction (POI). The principle of POI is to verify that a transaction has really been successfully accomplished between two parties. After confirming that a transaction has taken place, the system enables the customer who made the purchase to give the seller a review.
Reduced transaction costs:
According to Omnitude’s creators, commission for the implementation of transactions in the system will be lower than that for existing e-commerce systems.
The e-commerce market is one of the largest markets. According to research conducted by eMarketer, the global e-commerce market was estimated at $2.77 trillion in 2018, and projected to grow to $4.48 trillion by 2021. (https://www.emarketer.com/Report/Worldwide-Retail-Ecommerce-Sales-eMarketers--20162021/2002090).
In view of the fact that the market the team is planning to enter is very large and has many participants, the difference between which is often difficult to detect for users, we believe that the key to success in this market is original marketing and product promotion. Indeed, the e-commerce market is still not entirely covered by ready-made system solutions for trading.
As we know, Omnitude values marketing strategy and has budgeted how they plan to spend the 20% (20,000,00 ECOM) of tokens allocated to marketing over 3 years. A disruptive marketing strategy is planned for this period focusing on the following key stakeholder groups - enterprise, SME’s, strategic partners, the developer community and existing investors.
Moreover, in addition to the growth of e-commerce as such, we should expect the continuing transition of traditional trade to the e-commerce environment, which will also ensure continuing growth of the target audience for coverage.
The figure below shows the main players in the e-commerce market [https://blog.aheadworks.com/ecommerce-platforms-popularity-october-2015-top-five-solutions-take-three-quarters-of-the-market/]:
E-commerce of course has a number of advantages over traditional offline trading. Among them are the global scale of trading systems, round-the-clock availability of trade, reduction of business costs and thus cheaper products and services, personalization for market participants, a large selection of goods and services and prompt delivery.
Clearly, all these advantages can be realized within the Omnitude project. However, e-commerce suffers from a number of shortcomings: The ability to eliminate these is a competitive advantage for the project, and it offers an innovative solution. The weak points of e-commerce include: possible doubts about a project belonging to a particular company (negative anonymity); consumer distrust of services sold online, long waits for the delivery of purchaseds, possible difficulties and costs in returning goods, the likelihood of fraud (reducing the level of network security). All these disadvantages for e-business can be successfully eliminated by implementing Omnitude. More details about implementing the solutions conceived are provided in the section devoted to description of the product’s services.
With respect to transaction costs associated with e-commerce, Omnitude provides an alternative, lower-cost cryptocurrency-based payment mechanism, therefore the cost to business is a lot less per transaction.
The main indicators for existing payment systems are reflected in the diagram below, commission for the majority of which is about 2.9% per operation.
The team has presented ambitious and far-reaching development plans which carry great potential for implementation in the field of e-commerce. A variety of clear use cases have been defined (as outlined in the Omnitude Use Cases section of this document) and the roadmap communicates a number of releases from a development and business perspective up to 2019. True to their word, the Omnitude team launched their MPV (two links to their first release proof of concept) and their token sale on time; further developments will be released as outlined in their roadmap.
A more concrete implementation of the project will begin after the development and implementation of the platform, on the basis of which it will be possible to create single services tailored for specific tasks.
Currently, a potential investor in the project has the POC, the various strong and credible reviews across top ICO listing sites, publicity for the Omnitude ecosystem, a general white paper and technical white paper along with the strength and experience of the team and advisory committee, as well as a good token economy, which all suppor an investment decision.
Team and Stakeholders
The team includes a large number of specialists of various orientations. These include project management, brand development and promotion, finance and economics, strategic development and partnership, and more. Not to mention experienced specialists in Hyperledger, Blockchain technical development, blockchain marketing, financial service specialists, technology and governance.
The team plans to work with partners for additional resources and expertise with regard to blockchain development at scale, legal consultation and governance. Partners such as SwissCom will participate in the project in an advisory capacity as an extension to the team in the development area, and as organisers of scaled operations.
Omnitude is managed by a board of directors who are investors, founders or developers. Thus board members are integrated into the functioning of the platform.
Regarding prospects for product development, it is also worth noting that the platform’s open code provides free access to the product for any member of the network who will be able to adapt the platform to their needs. In this sense, product development is not limited to the efforts of the team members but also enables users to participate in the product’s functioning and customize it.
The organizational structure of the project involves understandable division of participants into the following groups: Core team, Developers, Advisors and Community helpers.
The Core Team
Chris Painter - CEO & Founder
Chris is the original Founder of Omnitude, and has over 10 years of running a successful eCommerce and Digital Marketing agency called Pixel by Pixel. Pixel by Pixel work with enterprise organisations through to small businesses and start-ups. eCommerce was their bread and butter and after much success, they branched out into Branding and other Marketing activities. This is a profitable business - Over £67m transactions a year go through the systems that Pixel by Pixel has built.
Vladimir Kalynyak - Co-Founder
In 2018 Vladimir joined the Omnitude team as Co-Founder. Chris and Vladimir have been working together for many years, as Pixel by Pixel was a preferred technical partner of the CS Cart platform for their UK base of clients.
In 2005 Vladimir co-founded Simbirsk Technologies which grew from a 3 co-founding team to over 100 specialists in software development, web development, system administration, testing and cloud technologies. As part of this business, the team launched and built the successful ‘CS-Cart Multi-Vendor’ platform which is now powering 35,000 online stores and in 172 countries (since 2005).
Robert Belgrave - Co-Founder
Robert is the founder and CEO of cloud services company Wirehive. Robert and his team support some of the most inspiring and innovative tech companies in the UK.
He is chairman of BIMA South, co-creator of the podcast ‘Alexa Stop!‘ and now adds Omnitude to his portfolio.
Martyn Brougham - COO Americas
Martyn joins Omnitude from DHL where he worked as the Solutions Director for the global supply chain giant, where he was responsible for pioneering projects to deliver supply chain solutions for multi million dollar contracts for the UK police, telecommunications and marketing in both Europe and the USA. Prior to that Martyn was a leading director at Williams Lea - the largest BPO company across Europe, USA and Asia Pacific.
Jurie Van Rensburg - Finance Director
Jurie brings 20 years of international senior finance and executive management experience; he is an accomplished Finance Director. His experience spans multiple sectors from Mining, Finance, Telecommunications, Engineering, Publishing and more.
Ben Bennett - Operations Director
Ben has 14 years of management experience within FTSE 100 companies. He is a commercial professional that has a proven history record of building, coaching and developing high performing teams.
Jon Harris - Brand Director
Jon has over 20 years of experience building brands across a range of sectors; most importantly for Omnitude he has a wealth of experience in retail and building British retail household names where he was Brand Director for over 10 years at Anne Summers. He has also worked extensively with Virgin, Unilever and the London Stock Exchange.
Lianne Byrne - Marketing Director
Lianne is no stranger to blockchain and the crypto market space, having previously worked for the Bitcoin Foundation, Newtown Partners technology VC firm. Lianne is a natural marketer and digital native with over 15 years’ experience, where she has been putting the audience and ROI at the centre of everything she does.
Belinda Hall - Strategy and Partnerships Director
Belinda has worked in network creative agencies her entire life (above the line and pure play digital) leading mixed-disciplined teams to deliver global brand strategy, integrated campaigns and product development across multiple sectors FMCG, Telecommunications, eCommerce, Financial Services and others. Belinda also has experience launching and running two start-ups. She had her first eCommerce store in 2006.
Blockchain Development Expertise
James Worthington - Hyperledger Specialist
James’s career has focused on data: Its creation, capture, dissemination, consumption, manipulation and utilisation for bottom-line benefit for data-driven organisations. He has many years’ experience working within the technology sector and is now the CEO of Belltrane, which is a full service hyperledger (blockchain) solution provider. Belltane assists organizations in exploring, anticipating, and adopting blockchain technology.
Benjamin Van Every - Blockchain Development Consultant
With a Physics Degree from the University of Oxford he is a senior quant engineering expert with a solid background in software development, blockchain and cryptocurrencies, AI, web scraping, mathematics, engineering and research. Benjamin has been involved in several coding and business start-up projects related to blockchain. James is a solution expert in all things hyperledger, blockchain, IoT, ERP, BI, DW, ETL, EPM, Essbase, RDBMS, and much more.
Ben Roy - Blockchain Developer
Regarding the Omnitude advisory team’s makeup, it is worth noting the presence of consultants for various areas of project development in the field of blockchain: project promotion and strategic management, blockchain development, cybersecurity and other areas. Herewith are three advisors, who are public figures in terms of thought leadership within the blockchain, retail and financial space.
Sally Eaves - Governance & Education Advisor
Sally combines a depth of experience as a Chief Technology Officer, Practising Professor of FinTech, Founder and Global Strategic Advisor, specialising in the application of disruptive technologies for both business and societal benefit. Sally is an international keynote speaker and thought leader in innovation, digital transformation and emergent technology, notably blockchain, artificial intelligence and machine learning. She is a member of Forbes Technology Council and consistently rated in the top 20 for blockchain and social media influence worldwide with 64k following her viewpoints on Twitter.
Antony Welfare - Retail Advisor
Antony is a retail and digital finance professional with over 10 years physical retailing experience, combined with a further 10 years in eCommerce retail running dotcom business and driving online business units. Anthony has gained hands on experience with M&S and Dixons and is currently pushing the boundaries of cutting edge retail technology working with Oracle. He is also a serial entrepreneur and author having published several books, a more recent publish is the ‘Retail Handbook’.
Michael Donald - Advisor
An accomplished disruptor in the payments and innovation space, Michael led the payments and wallet strategies for Bank of America in the UK, being the first organization to launch Apple Pay with Amex, Visa and Mastercard simultaneously and subsequently Samsung Pay plus Android Pay. Michael served on the board of Visa UK from 2011 – 2017 and was involved in the development of numerous emerging payments strategies. His international background saw him driving change in senior positions for American Express, IKEA, retail banks in the Middle East, MBNA and Bank of America. His ability to secure major partnership deals with leading brands is something he excels at, having launched payment and loyalty programs with Virgin Atlantic, Emirates, Etihad, Manchester United, Intu and AEG Entertainment. He is currently the CEO of Insignia, the world’s most prestigious Ultra High Networth payments and lifestyle company, and founder of ImageNpay.
It should also be noted that such partners as Swisscom Blockchain AG and CS-Cart will take part in creating and developing the Omnitude project ecosystem. Such partnerships are a strength of the project in our view and will definitely contribute to the successful development of the ecosystem’s functionality.
SwissCom Blockchain - Technology Advisors / Providers
Swisscom Blockchain AG, a global leader in Blockchain advisory and development services (as well as being the largest IT infrastructure host in Switzerland) have come on board as Technology Advisor / Provider.
They will specifically be helping the project with initial design sessions, business cases, use case development, strategy as well as the development of the Omnitude ecosystem. Their blockchain development teams will ensure the Omnitude project executes a successful proof of concept (POC) and covers questions around privacy, interoperability, confidentiality and scaling.
CS-cart is one of the multi-vendor eCommerce platforms currently being offered in many countries worldwide and powers more than 35,000 stores worldwide and has also come on board as a partner.
The Omnitude team has a long-standing relationship with CS-cart, and what makes this special is that they have an outstanding brand backed by a solid product and bring to the table years of priceless experience in the e-commerce space.
The Omnitude ecosystem will be based on a Hyperledger product base. ECOM tokens will become the main accounting units in the ecosystem. Traders will have to implement and accept payments in ECOM to use the technical solutions provided by the project. However, consumers who pay for merchants’ services will be able to pay in ECOM, fiat and other cryptocurrencies. The participants will also be rewarded in ECOM tokens for providing cybersecurity for the system and support of nodes functioning in the network.
Thus ECOM is a utility token that will be part of the Omnitude ecosystem and will facilitate transactions between its participants.
Omnitude uses a Proof-of-Interaction (POI) protocol for its platform.
This protocol will verify transactions and enables reviewers to write reviews or offer opinions on sellers, which will create an honest and open system of ratings and reviews for companies. Omnitude's Proof-of-Interaction will also improve loyalty programs by providing immediate data about customer purchases from this merchant.
Every time a client with an Omnitude identifier ("OID") makes a transaction with a seller with an OID, the record will be encrypted and written by the seller to the Omnitude blockchain.
There are 3 main parties on the platform: merchant, customer and supplier. A unified reputation system enables trust between all participants.
Any transaction inside the platform is written to the Omnitude blockchain when participants interact with each other.
Participants can perform the following actions with tokens:
A customer can:
- Obtain tokens in his wallet (OW) if a review of a seller is performed
- Receive tokens for participation in the loyalty program
- Obtain tokens via the referral program
- Get tokens for using their Omnitude identity (OID)
- Pay a seller for services directly
- Pay for writing data to Omnitude
A merchant can:
- Receive tokens as payment for his services
- Pay with tokens for use of the OID system by another interaction participant
A feature of transactions in Omnitude is a special mechanism for almost instantaneous payment between participants, recorded on the blockchain. All alternative payment methods (fiat or other cryptocurrency) will be converted to ECOM for the subsequent transaction.
The platform provides widgets on twebsites, bringing all possible participants into a single ecosystem that uses ECOM tokens. Use of this utility token appears justified and expedient. Participants have a motivation to interact using tokens:
- Participant buyers will save and earn via the referral program and reviews of sellers and obtain a convenient and transparent service due to transaction tracking and the OID identification system.
- Participant sellers can expand their sales channel, save on the transaction costs in acquiring and have a convenient service with transactions recorded in the blockchain system; a verified identification system; they will also save via reducing the probability of fraudulent transactions.
Analysis of Factors Affecting the Future Value of the Token
We have divided the factors that determine the value of the token into 2 phases: before the full functioning of the platform, which is important for investors in the ICO phase and after it, which is more important to long term investors.
Prior to the launch of a fully-fledged platform for interaction, the main factors affecting the token’s exchange rate will be the following:
- Possible selling by investors in the pre-ICO, which could potentially put pressure on the price of the token up to 1 year afterwards. This risk is always inherent in projects that have a prescription stage, especially if it is large. The project has raised over $4 million, which could potentially lead to a large volume of sales at the initial stage after listing on exchanges. Presale is 4/24.7 = 16% of the total potential of the crowdsale. It is likely that this phase included investors who rely on the long-term potential of the tokens, since a 15% bonus does not imply a strong speculative effect. Assuming an early project risk, a long absence of listing, etc., requires a greater risk premium for speculators, so the proportion of long-term investors is likely to be high at the pre-sale. However, 16% of total emission is a serious amount that could greatly affect the price in the future.
- Possible selling by advisors and team. Since the advisors and team are given as much as 12% of the total number of tokens, we see a potentially strong impact on the exchange rate. Many advisors, traditionally, having fulfilled their function, will want to convert their tokens into fiat. An unconditional advantage however is that receipt of tokens will be evenly distributed over 5 years. Accordingly, only 20-40% will be received by the advisors and the team up until 2019. However, the point can never be overstated that 12 million tokens are allocated to the team and advisors, more than 21% of the total crowdsale of 55 million. Here is the math should be done much better. How much will the advisors and the team receive immediately post sale? A tiny fraction of the emission.
- Delayed project release. Following the roadmap is one of the key factors at this stage. Timely presentation of the platform, wallet and other functions will demonstrate the degree of responsibility and diligence of the team, as well as a correct assessment of their own strengths and capabilities.
- A high correlation with other cryptocurrencies. If cryptocurrency gained is not partially converted into fiat, the price of the token will seriously depend on the dynamics of large cryptocurrencies.
After a full launch of the platform, we anticipate the following effects on the token:
- Selling by the team and other affiliated distribution participants. As mentioned above, due to an imbalance in the allocation of tokens, investors may be afraid of a decline in the token's rate due to selling by the team, advisors and investors. Potentially, 15% + 21% = 36% of the total allocation over 5 years with varying intensity - this volume will potentially put pressure on the market. With an evenly-distributed sale of these tokens, the effect will be somewhat leveled but risks of a decline still remain in the medium term.
- The need to purchase tokens to use platform functions will cause demand in the market, which will lead to an increase in the token rate. A great advantage for the platform will be the system of converting fiat and other cryptocurrencies into tokens to ensure interaction. At the same time, in order to avoid strong volatility, a serious liquidity support program is needed; otherwise we will see abrupt dynamics.
- Sellers will inevitably want to convert most of their tokens to fiat when they receive them. While cryptocurrencies do not enable full economic interaction, the "old economy" dictates the need to pay salaries and to service its own expenses in fiat.
- When monetizing commission transactions through partnerships, the sale of tokens received in the market will be required to cover costs, which will also affect the price.
- Given that the project is committed to open-source interaction, there is a system of incentives for platform-improving participants. If they receive bonuses on a regular basis, they will inevitably convert them into fiat, which will put pressure on the price. However, this will not lead to an increase in volatility, as smooth incentivisation is planned as the platform develops.
- As the emission is fixed, token demand will increase as more interaction participants are involved (both buyers and sellers). The development of the ecosystem depends on the involvement of participants. With a growth in the number of buyers and sellers, we should expect an increase in demand for tokens. The correlation between growth in the number of participants and the price of the token will in our opinion be very positive.
- With an increased number of nodes (both partial and complete) with different access levels, it is possible that tokens will be "frozen" and thus removed from circulation, which will reduce their supply and cause a price increase.
Most of these factors affecting the price are normal for utility tokens. People buy tokens to "enter" the platform and sell them for profit and expenditure outside the ecosystem. The system has a high turnover potential which indicates a large liquidity in the future.
In general, if we summarize the main factors affecting the price of tokens, the main ones are the development of the business and the involvement of an increasing number of the platform users.
Investment Risk Analysis
1) One of the main investment risks is non-acceptance of the product by the global market; without such acceptance successful development will of course be impossible.
We see that the success of the platform depends on the implementation of the platform by a certain "critical number" of participants. All identification systems, verified ratings and transparency through the recording of transactions in the blockchain system will be significant only when implemented by a large number of participants. Therefore, exponential growth of participant numbers in the early years is vital to the platform. When the OID identification system proves its own effectiveness and convenience, more sellers and buyers will use it. If Omnitude introduces its platform to only a small number of counterparties, even on a successful basis, investors will be disappointed and will get rid of tokens. The platform does provide many advantages for the e-commerce sector; however, only with a lot of work with the involvement of partners and strong marketing the necessary scale for success can be reached.
2) The second risk is the possible volatility of the token and the decline in its popularity in operations.
On the one hand, it enables token holders to earn. When new participants enter the project, there may be an increase in demand and the price of the token as a consequence. There may be an abrupt decline when sold by other participants. All these fluctuations can enable investors to earn on the movement of prices. However, strong volatility and even a sharp increase in the price of tokens in the short and medium term can frighten participants. Risks of strong price fluctuations are an important obstacle to the use of the token. After completing a transaction, many participants will want to convert tokens into fiat and not take on risks of price changes because their pricing takes place in fiat currency. This will not allow tokens to become a full-fledged payment element, they can become only a "link" in the chain of transactions "fiat-token-fiat", which reduces their value in transactions and prevents an increase in their demand.
High volatility is detrimental to the project’s development but it can help investors earn; low volatility will enable better development and scaling of the project but the profitability of average annual growth will be insufficient for investors.
3) Systematic market risks for cryptocurrency. These include both regulatory tightening, restrictions on turnover in different countries and the dynamics of rates of major cryptocurrencies. Market cooling after a period of rapid growth in 2017 could reduce interest in the crypto industry and slow the introduction of blockchain solutions into electronic commerce.
4) Insufficient utility for the industry and low popularity of the solution. The experience of Amazon and other large retailers shows that the ‘traditional’ e-commerce economy is stable and workable; it will be difficult to reverse these established foundations. Any business is built on the assumption of a competitive advantage for its future product, but there is always the risk of rejection of a revolutionary solution. This may involve a reluctance to change the format of work for e-commerce companies, a transition to new accounting, training of employees and other costs. Separately it is worth noting the complexity in accounting for tokens for legal entities, which could severely limit the applicability of the platform and its introduction into the "traditional economy" of electronic commerce. All these difficulties could affect the popularity and potential scalability of the platform, and their impact will be known only after the launch of the finished product.
5) Risks of delay in product realization and discrepancy with the roadmap
An extremely important risk for the project is the high complexity involved in developing and scaling its product. We do not doubt the team’s skills; the release of an MVP shows that they are capable of completing their objectives. However, we see a great number of technological and marketing difficulties in the future, and they are difficult to evaluate at present. As the results of work become clear and progress reports are published, this risk will decrease. However, it is currently high.