We assign the Profede project a "Stable+" rating.
We find the Profede project very promising, and see great potential in the protocol being developed. At the moment, as professional social networks continue their development, the next logical stage will be the introduction of distributed networks and P2P mechanisms to processes for hiring and exchanging professional information. Current schemes for interaction between candidates, employers and headhunters are often ineffective, and we agree that a protocol based on blockchain could potentially solve the problem.
An undeniable advantage for the project is the existence of a partnership - a platform for initial expansion to the market and the creation of a CV base. In addition, the development horizon for the final product is short, and an MVP based on beBee is currently available.
Together with these objective advantages we have also identified a few risks. First of all, the protocol is entering a competitive market, and the description of the competitive environment in the documentation is limited to the protocol's advantages. Other startup solutions in the field are not reviewed, nor current players' opportunities for implementation of their own systems. Given that Profede is a protocol, it needs a vital environment, successful and effective to the fullest possible extent. At the moment, professional social networks could become such environments, but it is unlikely that major players would settle on this option. A more probable scenario is for financing of independent developments.
We look forward to further strengthening of the project’s marketing campaign. The team has already managed to raise funds during its pre-sale, and we see this as an opportunity to strengthen marketing activities in order to increase the community's interest as the ICO progresses.
The quality of Profede’s documentation is high. The project’s financial plan and KPIs make a positive impression; their analysis of the competitive environment conducted indicates clear positioning for the project within the market, and an adequate perception of its competitive advantages.
Profede is a decentralized professional protocol. This is the wording the founders use to discuss the field of headhunting and professional social networks, LinkedIn being the most recognizable platform within this field for a long time now. The protocol under development is not a substitute for professional networks or other market participants, since it is created to help them as well as to assist potential employees (in the documentation they are referred to as "professionals").
Profede is a project aiming to create a blockchain protocol of the same name, the main purpose of which is to generate, store and transmit data about potential employees in the form of their CVs. Essentially, the protocol provides for the creation of a marketplace for professional information, where businesses serve as buyers, and individuals (potential employees) are sellers. Such information is not free; this enables professionals to receive rewards for provision of personal data, and also allows recruitment agencies and companies' personnel human resources departments to optimize costs in searching for competent employees. In addition to hiring personnel, the protocol can also be used to search for competent people for other purposes, as well as by entrepreneurs to sell their services.
The Profede protocol could be implemented within any type of suitable web resource, be it a professional social network, a recruitment agency or information portal. When adding Profede to the architecture of the main platform, users have the opportunity to create their professional information, and the protocol functions the same on different platforms, enabling one to combine databases from different portals into one. When businesses or professionals use Profede through their own apps, P2P transactions are also technically possible.
The Profede team decided against developing their own platform for the implementation of the protocol in favor of finding suitable existing resources. At the moment, the project’s partners include beBee, the first platform to use a professional protocol. beBee is a collaborative professional network based on openness, tools for collaboration and professional content. Currently, beBee has 12 million users in more than 100 countries (according to Profede). The portal was founded in 2015; in 2016 it participated in the prestigious Silicon Valley Program.
Legally, Profede is represented by Profede Ltd, incorporated in Estonia. Profede’s headquarters, its founders and a significant portion of its development team are located in Spain, in compliance with all enforceable national and local laws.
The crowdsale is divided into two stages — a pre-sale and a main tokensale. At the time of writing the crowdsale was well under way, and the project had already exceeded its soft cap level. However, this is not verified.
Start date: 1st June 2018
End: 15th September 2018
Hard Cap: US$20,000,000
Soft Cap: US$1,500,000
Price: 1 PATO = US$0.01
Token: PATO, ERC-20 standard
Accepted Currencies: ETH, BTC
Total Issue: 6,000,000,000 PATO
For sale: 3,000,000,000 PATO
There will be a three month lock-up period for pre-sale investors.
A three-month lock-up period is provided for advisors, whilst team members will have a two-year lock-up period, with 25% of their tokens being unlocked every six months.
Tokens from Profede's reserve will be locked for one year.
The main service offered by the Profede protocol is a facility for professionals to create and sell their personal information to businesses. Based on the protocol's structure, three types of participant can be identified:
- professionals: job seekers who need a professional profile for receiving professional job offers.
- businesses: companies seeking employees, a change of personnel, etc., or specialized recruitment agencies.
- applications: platforms independent from Profede, but use its protocol; they could include social networks, headhunting portals, etc.
Within the framework of the protocol, a database of professionals is being built, essentially consisting of professional profiles written by users based on their own preferences. If a person does not want to disclose certain information, they are not obliged to. After a professional profile is created, the professional sets its cost of access. Commissions charged by Profede and the application used are added to this price. The second type of commission is partly explained by the application's motivation to publish information about the professional; thus, each participant receives a benefit: Businesses obtain information, professionals and applications receive rewards in the form of tokens.
To ensure control over false, incorrect or unimportant data, Profede provides professional feedback ratings, which allow professional data to be filtered, so businesses can be sure that they receive quality Information. After each interaction with a third party, a professional receives an estimate affecting their overall rating, fixed within the decentralized network. Data for low-ranking professionals will not be in demand, obliging them to lower their costs or revise their data. The feedback rating will be set between 1-5 "stars", and is based among other things on user activity and quality of communication.
We have described all the services offered by the Profede protocol in general. We note a fairly simple and transparent scheme for interaction within these services, consistent with the concise software architecture.
As a real-life example of Profede’s functioning, let us consider the scheme for successful data purchase given in the documentation:
We see that the scheme involves two intermediaries — an application from the professional's side and from the business side. The configuration could be different, including even P2P transactions, if both business and professional install and develop the appropriate software (application).
The scope for application of the protocol is really wide within the framework of recruiting and in the professional data market. The use of the protocol is beneficial for all parties:
- Complete control and monetization of their own information.
- Pricing control.
- Lack of any need to duplicate information for different applications.
- The possibility of saving time and money, with more efficient services compared to traditional ones;
- A possibility to choose quality data for purchase (no "package" offers).
- Access to professionals' ratings as a means of improving the efficiency of purchasing information.
- No need for a client base when creating applications — the database of professionals from the protocol will be automatically available.
- A positive environment for developing business models based on the protocol.
- An additional source of income for transactions between business and professionals.
It should be noted that the Profede protocol has application not only within the process of recruitment/job search. Information about professionals, which has its value, could also be used in different ways. For example, to choose a competent consultant, to search for partners for projects and businesses, to offer their services — social selling. Furthermore, professionals make the final decision on whether to grant access to those requesting the information.
We believe that the Profede project is part of a trend for "returning" the right of ownership of personal data to its original owners. The specific field of application and the technology, in this case, are secondary. The most important point is that blockchain allows people to undermine the "flip-side" of social networks and data brokers.
Social networks offer users services in exchange for personal identification and personal data processing. Many people have already started to understand the price of online activity.
And in this case, we are not talking about particular critical cases like the latest scandal with Cambridge Analytica. We are simply emphasizing once again that personal data is ‘the oil of the 21st century’. People managed to lose control over global natural resources, by giving rights to corporations and governments, so why repeat this with personal data!?
However, this issue should not be addressed by immediately deleting all social media accounts and disconnecting devices from the internet. For personal data to be valuable, and ideally very valuable, more work on it is necessary. Buyers of personal data most often deal with marketing cases and try to boost sales of their products. While sellers of this information are data brokers, companies specializing in gathering personal data from public and private sources.
However, no one claims that data brokers’ activities are illegal. On the contrary, these are high-tech companies specializing in data mining and big data, which deal with rather complicated tasks. Without them targeted marketing probably would not work, and as a result the current quality of services for businesses would not have been attained.
Ironically, sources of personal data (individuals) cannot effectively structure data about themselves. And it is only now that a breakthrough related to blockchain development is beginning to have an impact in this field. A decentralized network could return the rights and, as a result, most of the revenue to the sources of information. All in all, blockchain once again helps to reduce the role of intermediaries and make the market more efficient.
And now we can return to the main subject of the review — the Profede protocol. We are dealing with a blockchain protocol providing the facility to create, store and transmit data about job-seekers to interested parties, being employers. But the most important point is that the protocol allows an applicant (a professional) to receive compensation for their personal data.
Comparisons with LinkedIn come to mind, but this is only at first glance. Despite the fact that the labour market theme links these projects, Profede is an infrastructure protocol suitable for b2b interactions. Therefore, there is no direct competition between Profede and social networks.
In terms of b2b, Profede has a good chance of taking over a portion of the market. The global recruitment market is quite large, but it is difficult to find accurate estimates. According to Deloitte, in 2017 the global volume for the industry of re-straightening was about 200 bln USD. In any case it is a very large market which will continue to grow, both as a result of demographic reasons and of improving quality of services.
At the moment, the general market tone is set by social platforms including LinkedIn, Xing and Viadeo. Businesses look for good employees, and they are willing to pay for it. Modern professional networks have the upper hand, and classic recruitment agencies are losing the market.
Among project ICOs, recruitment remains popular. Most often "LinkedIn killers" appear, but none of them have yet managed to achieve any significant success. Once again, Profede is a trendy project, supporting rejection of intermediaries, reduction of prices for final service, and greater efficiency for the end user. The main thing is that personal data is returned to its "owners", and that cash flows from employers are redistributed.
The founders were able to select a very strong team for the Profede project. It includes professionals in finance, telecommunications, blockchain architecture, etc. The official WP provides an elaborate diagram with a list of firms with which Profede is cooperating in one way or another. The list looks impressive:
A team of 7 members and 10 advisors is presented on the project's website. The founders have included brief comments about the staff. We believe that this is a valid approach which allows the reader to quickly navigate the background of the team, and if necessary, to access specific profiles on LinkedIn.
Founder and crypto capitalist at SPiCE VC, Backed by the founder of Mozilla. Ex President and CEO of Telefonica R&D, the founder and a board member at Wayra. MBA at Stanford University Graduate School of Business.
Ex-LinkedIn data scientist. Big Data expert. PhD in Machine Learning. Currently, an assistant professor of Data Science. Advisor to Implisit (acquired by Salesforce) and other startups.
Ex-Twitter head of content. Tech executive, entrepreneur, and a wannabe oenophile. Co-founder of BOLT (mobile entertainment for the next 6 billion), advisor (Commercial, Marketing) @ Zilliqa (next-gen high throughput Blockchain platform). Previously: Brandwatch, Twitter, Samsung, Havas.
CEO of beBee. PHD from the University of Delhi. Ex-oracle. Expert in software engineering, complex platforms building and managing teams and technical resources. Entrepreneur with solid background in technology, complex-project management and blockchain enthusiast.
Founder and Chairman at LDJ Capital. Blockchain and cryptocurrency leader. Runs $200M LDJ Caymun Fund. Previously worked with Robert Hambrecht at Alternative Energy Fund NewCommons Capital. MBA in Finance and MA in International Law and Economics
Fintech Entrepreneur-Advisor-Investor. Founder of MobileyourLife which brings AI to enterprises. Blockchain, cryptocurrencies, and ICO enthusiast.
The PATO token (Professional Activity Token) created during the ICO for the Profede project has utility functions. All payments for information, as well as commission payments are carried out in PATO tokens. When data is generated by a professional (this essentially involves the creation of a smart contract), they set the price to be paid by those interested in accessing the private portion of the data. The public data is free to access.
As demand for information about a professional arises, businesses can create a request to access all data by sending the sum required in tokens to a smart contract address, and after the payment is accepted by the professional, the data will be made available to the buyer. Commissions are also added to the cost of a professional's data, and the final formula for data cost is as follows:
Total_Price = Professional_Price + Apps_Fee + Profede_Fee = 1.12 * Professional_Price, where
Apps_Fee — the size of the application's (intermediary's) commission. This commission is an economic stimulus to make the public aspect of professional data available on their own site. (10% of the cost of information).
Profede_Fee — commission for supporting and upgrading the protocol (2% of the cost of information).
We should start with the long-term fundamental factors for the PATO token, because it is on this horizon that we see the token’s greatest potential. This is mainly due to the high scalability of the business and the simplicity of the protocol.
The key and only function of PATO is to be the currency for payments within the framework of the Profede protocol ecosystem. Thus, as the business and ecosystem expand, demand for the token on the market can be expected to increase. A distinctive feature of Profede in terms of scalability is the fact that it is a protocol, not another professional social network or a virtual platform. In the future, the protocol could be easily and successfully integrated into the software architecture of large social networks, which will be beneficial for the networks themselves, as most of the commission is charged by the intermediary application. At the moment, one developing platform has been announced as ready to implement the protocol after its launch. Whilst this is not LinkedIn, this is something, and at least Profede will be able to start creating an initial database of professionals.
For short- and medium-term triggers, firstly, the close horizon for the product’s launch and secondly, the existing launch platform and marketing policy should be noted. According to the published roadmap, release of an alpha version on the Ethereum testnet is scheduled for Q3 2018, and by Q1 2019 it will be released on the full Ethereum network. The last milestone is scheduled for Q2 2019, when network optimization and scaling are expected.
Thus, by the beginning of 2019 the development will already be finished; by this time it would be possible to expect attraction of additional platforms for using and creating an initial database of professionals. Further growth of the network will intensify as the base expands, especially in terms of international labor markets.
From the point of view of marketing policy, the project is doing well: the official publics are running, the branch on Bitcointalk and the channel in Telegram have their discussions, and the community's interest is growing quickly. We are counting on further strengthening of promotion, but we do not expect to rely on hype as a short-term trigger for the increase of PATO's value. The project’s subject is specific, and not every user is able to assess its potential.
Therefore, there are no express medium-term growth triggers for the PATO token, and in our view the project should focus on the greater scalability of the protocol and its long-term attractiveness not as another "killer" for LinkedIn, but as a tool to supplement it and increase efficiency for all parties.
The Profede project is subject to the risks typical for crypto assets, but it has already overcome many of the specific risks inherent in early-stage projects. The project has a good team, partnerships, an MVP, and it has already held a pre-sale. Not many ICO projects can boast of such a record in their resumés.
The competitive environment of course carries certain risks. Even without looking for direct competitors for the Profede protocol among ICO projects, recruitment solutions are quite popular. Since there is a struggle for one and the same audience, a lot will depend on the project’s marketing policy. It should be noted that the Profede team understands this and is conducting an active marketing campaign.
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.