TokenStars TEAM Rating Review

Positive

Investment Rating

Expire date: 28.06.2018


We assign the TokenStars TEAM project a "Positive" rating. The project has attractive prospects in a significantly-sized market. We think that TEAM tokens may be interesting to investors at the token sale stage. At the same time, plans to unlock a portion of the tokens for the project team immediately after the token sale, together with the generous bonuses offered in the early stages of the sale (up to 60%), may inhibit growth in the token’s value for the medium term.

The TokenStars project is entering a highly competitive market with a number of advantages over classic players, namely:

  • An opportunity to build up an unlimited network of scouts and promoters.

  • Transparency of operation and increased motivation for potential users.

  • A decentralized voting system.

  • Token holders can participate in decisions on organizational matters.

The project team has some prominent experts; we believe that they are well aware of the difficulties young athletes have to face. This is the second project offered by the founders; the first project, which concerns tennis (ACE), has successfully passed its crowdsale stage (with $4.9m raised). The platform is already operational; ACE tokens are circulating on the open market and show positive dynamics since trading started.

The project has clearly formulated its plans for development; they are being carried out in accordance with established deadlines. The fact that the management is sticking to its deadlines for the implementation of developmental stages formulated by them earlier, and the fact that we can check their compliance with a completed body of work, we consider one of the positive factors.

The popularity of sport is growing every year, and positive trends in the sporting events market will provide significant support to the project. At the same time, there is strong competition among sports agencies. The introduction of blockchain technology will give the TEAM project advantages over major market players, but further success for the project depends on the team’s ability to promote its platform.

The TokenStars company is launching a new project, the TEAM platform (in which the main areas of activity are football, basketball, poker and eSports) using blockchain technology. This will ensure transparency of operations and will simplify interaction between celebrities, fans and advertisers. The project is intended to solve a number of industry problems and increase interest for all participants.

The platform will help address a number of major issues for participants in this market:

  • Obtaining financial support for young, promising talent, which will significantly increase their chances of success.

  • Advertising and promotion for active professionals.

  • Enabling fans to communicate with athletes and celebrities.

  • Increasing effectiveness of advertising campaigns through the use of smart contracts.

Website

Whitepaper

Twitter (2841)

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Facebook (1788)

Bitcointalk (Read 14172 times)

Medium (438)

GitHub

Smart contract platform: Ethereum blockchain

Contract Type: ERC-20

Token: TEAM

Soft Cap: $1m

Hard Cap: $15m

Maximum number of issued tokens: 75m

Price: 1 TEAM = 0.0001 BTC

Accepted currencies: BTC, ETH, ACE

The token sale will be held in 5 stages, with a bonus program for participants:

  • 1st stage: 20.12 2017 - 10.01.2018 - 40%

  • 2nd stage: 10.01.2018 - 27.01 2018 - 30%

  • 3rd stage: 27.01.2018 - 05.02.2018 - 15%

  • 4th stage: 05.02.2018 - 15.02.2018 - 10%

  • 5th stage: 15.02.2018 - 28.02.2018 - 0%

In addition, there are additional bonuses for major purchases:

  • 1–3 BTC — 5%

  • 3–5 BTC — 10%

  • > 5 BTC — 20%

Bonuses for large purchases are summed with bonuses in the early stages. The management reserves the right to implement additional bonuses. The dates and duration of all token sale stages can be changed in the event of a change in market conditions.

The structure of the distribution of tokens is shown below:

Should the project raise $15m during the token sale, funds will be distributed as follows:

Tokens intended for the team and advisors will be blocked until project participants achieve the following targets:

  • 5% — listing on exchanges

  • 5% — signing of contracts with the first three players

  • 5% — signing of the first 3 advertising contracts

  • 5% — implementation of the first 10 modules on the TokenStars platform.

Sales geography: TEAM tokens are not subject to offer and distribution and may not be resold or otherwise transferred by their holders to citizens, individuals or legal entities who reside or are registered in the United States of America (including the States and District of Columbia), Puerto Rico, U.S. Virgin Islands, other U.S. possessions or countries or territories where transactions using digital tokens are restricted or otherwise prohibited by applicable laws.

The TokenStars platform consists of 12 modules, which are arranged by functionality in 4 different layers, differing in the services provided:

1.    Crowdfunding Layer

  • Talent Support module: Prospective talents can utilise this to attract funds for professional development.

  • STAR ICO "Time Tokenization" module: Designed for individual celebrity ICOs; this module requires STAR tokens (the STAR token will be announced in the future and will be sold at a separate crowdsale event).

  • STAR ICO "Income Tokenization" Module, designed for individual celebrity ICOs, this will also utilise STAR tokens (the STAR token will be announced later and will be sold at a separate crowdsale event).

2.    Infrastructure Layer

  • Talent Scouting Module, through which scouts may find promising candidates, analysts study proposed candidates; scouts and analysts earn TEAM tokens in the case of a contract being signed between a candidate and the platform. Any interested token holder can become a scout or an analyst.

  • The Voting Module is used for the following:

    • Conducting surveys on the platform

    • Voting in the Scouting Module

    • Voting by fans for achievements of their favorite stars. Active participation in voting enables one to receive additional tokens.

  • Betting Module — fans will be able to bet on the results of sporting events using tokens. Acceptance of bets and automated payments to winners are realized with the help of the smart contract.

3.    Fan Community Layer

  • The Bounty Fan Club Module allows sporting celebrities to place paid tasks for their fans, such as creating content and promoting social media accounts.

  • The Fan Communications Module will allow sports personalities to earn tokens in addition through texting and video chats with fans, as well as exclusive offers for fans such as the following:

    • Live meetings

    • Training

    • Tickets to matches

    • Concerts, etc.

  • The Contests and Charity Module - will enable both the platform and its sports stars to hold a variety of contests among fans, with prizes in goods or tokens.

4.    Brands and Advertising Layer

  • Advertising Smart Contracts Module — this module has a smart contract designer for brands that will provide them with the following features:

    • Customizing ad campaign settings.

    • Evaluating the effectiveness of advertising — all important events will be recorded in the blockchain by the smart contract.

    • Using APIs for a standard analytics package, such as Google Analytics, to integrate campaign results into general reporting practices.

    • Through the Data Management Platform (DMP), which gathers and analyzes information about the audience of the project, one can use obtained data to target advertising campaigns.

  • Brand Relations – this module allows fans to become promoters and earn tokens through finding advertisers for young talents.

  • E-commerce is a module implemented on a third-party platform, where TokenStars and selected brands will sell various items related to sports stars, via auction and in the store.

The TEAM token confers on its holders the right to participate in events held on the platform, and is the internal currency for payment transactions between members of the ecosystem. It also provides the right to vote through the decentralized community voting (DCV) mechanism.

The platform was launched at the end of December 2017 and currently has a working module — Contests and Charity. Over a month the number of unique visitors exceeded 4000. Given this information, it seems that further development of the product will increase end user interest.

There is no team token repository on GitHub at the time of review.

Team is a cryptographic utility ERC-20 Ethereum blockchain token, intended for the interaction of platform participants.

Events occurring on the platform (important announcements, reports from promoters, voting results, auction bids, etc.) will be recorded in blockchain. The Ethereum blockchain will not be able to provide the required transaction speed, so the platform will use 2 different blockchains:

  1. The Ethereum blockchain, to be used for cryptocurrency operations.

  2. A private blockchain designed for operations within the platform.

TokenStars’ private blockchain will be built on a node network. Node operators will be able to check records on the blockchain to resolve possible conflicts. TokenStars will provide a software package for launching network nodes.

The private blockchain will be based on Hyperledger Fabric and will interact with the Ethereum network through a generic API that will be further developed. According to the information provided in the white paper, the planned technological stack will include:

  • Amazon AWS Ubuntu virtual servers for deployment of private blockchain nodes.

  • A third-party e-commerce suite customized for cryptocurrency and tokens.

  • An advertising module with a combination of solutions by Google, AppNexus, Amber Data and Iponweb.

  • Solidity and Golang for blockchain development.

  • ReactJS, Android Studio and XCode for development of user interfaces.

Currently sport plays an important role in almost everyone’s life. For some, a sport is a hobby or a means for a healthy lifestyle; for others it becomes a profession and a main goal in life. People follow or practice vast ranges of different sports.

Currently there is a rating system for the most popular sports, estimated using a list of different criteria including:

  1. Number of fans and spectators globally.
  2. TV audience.
  3. Broadcasting rights.
  4. Online popularity.
  5. Social media presence.
  6. Number of professional leagues worldwide.
  7. Average salary of athletes in higher leagues.
  8. Sponsorship contracts, etc.

Soccer leads the list with 3.5 bln fans. The soccer audience, regularly following matches in almost all regions of the world, is unparalleled. Soccer is played by 250 million players in more than 200 countries, making it the world's most popular sport.

Soccer stars are the most popular and highly paid among all athletes. For example, Cristiano Ronaldo is the most popular star on social media (122m followers on Facebook and 64.5m followers on Twitter). Ronaldo earns 400,000 euros for each post on Instagram. Ronaldo's total income is $93m per year. Lionel Messi is second with a base of 89m fans on Facebook. Messi's annual income is $89m.

Via their pages on social media, athletes share their photos of events, new styles they take on, their thoughts, or seek various tips from their fans. By regularly interacting with their fans, they become even more popular. Fans of sports stars and teams spend a considerable amount of money to be closer to their idols.

According to statistics, the amount of money spent on matches in which fans’ idols participate depends on 10 factors (key performance indicators). The higher the total score, the more fans are willing to spend money.

Nowadays a large income is enjoyed not only by star athletes, but also by mediators – agencies - who act between them and employers. Sports agents’ business is thriving, due to the fact that athletes’ salaries have grown in recent years, but also due to the number of media rights-related transactions having increased in proportion.

The companies represented in Forbes’ (2017) rating of the most lucrative sports agencies globally, have a total cost for existing professional contracts for athletes of $43 bln, minus a commission of more than $2.1 bln - almost 10% more than last year.

The sports industry boasts multi-billion dollar revenues, costs and contracts. Turnover increases every year, due to the growing popularity of various sports. Factors such as the growth of living standards and the ever-increasing penetration of television and the internet to different corners of the planet also have their impact. We believe that these trends could have a positive impact on the expansion of the TokenStars business.

As already noted in the "Market Review" section, the sports industry is a hugely developed industry where many tasks are handled by sports agencies; this segment has clear leaders. The top five centralized sports agencies that we consider to be the main competitors for TokenStars are as follows:

  1. Creative Artists Agency (CAA) – an agency that has managed contracts to a total value of $8.5 bln. The annual commission amount was $318m for 2017. CAA has signed football contracts for $3.5 bln, more than any other agency. The agency also has contracts with hockey players at $1.82 bln.

CAA includes top sports agents, 5 of which are in the top 20.

  1. Excel Sports Management – possess contracts to a total value of $3.4 bln for 2017, which is $300m higher than last year's result. Excel Sports Management is the number 1 in basketball. Founder Jeff Schwartz is on the list of the most succesful basketball agents and manages more than 60 contracts.

  2. Wasserman Media Group has contracts for $2.7 bln with $135m in commissions. Wasserman is focused on representing the interests of athletes in football, baseball, basketball, golf and soccer; it manages more than 1500 clients.

  3. Independent Sports and Entertainment has contracts for a total value of $2 bln. Occupies the fifth place in the management of contracts for basketball and 6th place of soccer.

  4. Octagon has contracts for a total value of $2.7 bln and a commission of $114m. The agency is focused on soccer, basketball, baseball and hockey.

Analyzing this information, it is clear that the young TokenStars platform will have to compete with large established companies that have captured large market shares with revenues of up to $1.8 bln. However, TokenStars already has the following advantages, despite the fact that it only recently entered the market:

  1. This is a unique platform for finding talents on blockchain which makes the platform special.

  2. The functionality and multitasking available on TokenStars, where not only scouts but also sports stars, their fan base and promoters can interact, make the platform universal.

  3. There is a system for incentivising platform participants.

  4. TokenStars also places great emphasis on poker and e-sports unlike traditional agencies.

Competition in the sports industry is of course very strong both among athletes and sports agencies. To compete with sports flagships and to bring the market to a new level, is possible only by making all transactions open and transparent; this is what TokenStars is striving for. We think that TokenStars has all the prerequisites to become a worthy competitor to traditional agencies.

Having analyzed all executed and planned work, we identified some risks that could affect the development of the platform and the investment attractiveness of the TEAM Token.

Unlocking the team’s own tokens will occur depending on the achievements of the company's technical and business goals. The first such goal will be the listing of TEAM Tokens on exchanges. Once the tokens appear on exchanges, a quarter of all frozen tokens will be immediately available to their owners. This is too early to defrost tokens, which creates a market risk for their price.

Despite the fact that TokenStars has no blockchain competitors, it has to compete with the classic talent search agencies. These are huge businesses with multi-million dollar contracts and an established audience. Competing with such giants will not be easy; we consider the risk of strong competition to be one of the main ones for this project.

We also believe that selecting young talent for investing in development is risky. Despite the fact that this choice is made based on the experience of scouts, it does not offer a guarantee. A promising athlete at first glance may not become the future star that TokenStars hope for. However, we note that the team provides a diversification model for investing in young athletes in order to reduce this risk, and the probability of the scenario described above is already embedded in this model.

We did not identify other specific risks that could affect the viability of the platform or the attractiveness of TEAM Tokens.

The project team consists of 11 qualified specialists. There are also 7 advisors invited.

Pavel Stukolov (LINKEDIN) is the project founder. He has the following work experience:

  • VC Investment Manager (private VC Fund / family office).

  • Strategy and M&A Director (Sistema Mass Media).

  • Project Manager, IBD (Nord Capital).

  • Senior Analyst, DCM (RIG-Finance (Russian Investment Group).

Marketing director Irina Shashkina (LINKEDIN):

  • CEO (Lingualeo).

  • Business Development Executive (Rambler&Co).

Publications:

CTO Evgeniy Potapov (LINKEDIN):

  • CEO at ITSumma. 10 years of experience as Founder and CEO at IT Summa.

Head of sponsorship programs Madina Hooke (LINKEDIN):

  • Co-Founder (LLC "IAM").

  • COO (VisualDNA).

  • Regional Director (Groupon Russia).

  • Comercial Director Russia&CIS (Grupo Mall).

  • Founder (M Travel).

  • Shaping-up-with-angular-js.

  • Staying-sharp-with-angular-js.

Projects:

Product director Timur Gavrilov (LINKEDIN):

  • Product Head (LinguaLeo).

  • Product Marketing (ABBYY Language Services).

  • Business Development/Product (Flocktory).

  • Regional Director (Groupon).

The team brings together professionals from various industries with extensive experience in the creation, development and promotion of blockchain projects, as well as experts in various fields including Edgar Kampers, Wulf Kaal, Nicolay Danilov, and Tomoaki Sato.

Among the sports advisors are Olympic champion Elena Makarova, tennis star Veronika Kudermetova, football advisor Matheus Antunes, inspector and advisor on business development Andrey Rusakov, as well as advisors on marketing and advertising.

We consider this a qualified team able to invest its forces, energy, knowledge and experience in the further development and expansion of the platform

At the end of 2017 the TokenStars team launched a project to help young tennis players, and had a successful crowdsale for ACE Tokens in October 2017. This points to a successful implementation of the new project within TokenStars.

For the successful implementation of the project and realization of their conceived goals, the team is planning to constantly explore the market, communicating with industry professionals, sports stars and platform users, taking into account their interests and experience.

Stages for the project’s development are presented in visual form by the following scheme:

A beta version of the platform was launched In December 2017.

The white paper provides detailed information on the development plans for the project. A distinctive feature is the fact that the management is trying to develop all the key areas for the development of the new TokenStars project as carefully as possible, including technology, marketing, scouting and operating activities. The vector for development for each direction is determined by the creation of global goals, and achieved through the phased implementation of local tasks.

The listing of TEAM Tokens on exchanges is planned for March 2018.

We conclude that the project has clear goals as well as plans for their implementation. The team has a real chance for the successful achievement of all developmental stages.

At the current stage, the TEAM project has less media coverage than the placement of ACE tokens at a similar stage. Only smaller articles, mainly in the Russian language sector of the internet can be found, due to a more targeted approach in terms of budget use based on the experience of the team's first project at ICO. The project abandoned all previously ineffective promotion channels for the current ICO.

Bounty campaign: A bounty pool will be available, consisting of 2% of TEAM tokens sold if $5+ million is collected; this will be 1% if less. TokenStars partners are the same as for the previous token sale – Tribuna.digital and Sports.ru.

The current social media promotion is very modest, although those who participate in discussions of the project are very active, especially on the bitcointalk.org forum, and usually interested in buying,. At the time of writing, the number of participants on social media is small (see the "Project Description" section), but we note an increased interest in the project lately, as well as increased activity.

TokenStars allocates 13% of funds raised to the marketing strategy for TEAM (this equates to $1.95m if the target of $15m is reached; the percentage will remain the same with other scenarios). The budget also details sales costs of 10% and 4% for PR.

The basis of TokenStars’ marketing strategy is sports fans’ and brands’ attraction to blockchain, i.e. the use of new technology and the transparency of transactions can be marketing features themselves.

The strategy for attracting fans consists of the following:

  1. TV + ONLINE VIDEO. Promotion through sports channels on YouTube, sports bloggers, commentators, recordings of games and highlights. No direct time purchase in the media, but an appearance via endorsements by sports stars. For example, logos on clothes, hashtags and others.

  2. SOCIAL MEDIA. An advertising campaign will be built based on an analysis of fans’ social media subscriptions, with the help of micro-targeting.

  3. INDOOR + OUTDOOR. Advertising located near and inside stadiums during sports events, endorsed by athletes.

  4. INFLUENCERS.

The attractiveness of TokenStars to brands arises from the following:

  1. The market for sports agencies is not yet mature in many local markets.

  2. Its ability to offer new means of communication with sports stars.

  3. An analytics platform that is clear and transparent.

  4. Young stars not yet signed to large sports agencies.

  5. The presence of end consumers on the platform.

It is important to note that the TokenStars team has included marketing plans for Q1 2018 - Q1 2019 in the roadmap, such as the following:

  • Global PR activities aimed at young players and their coaches, fans and sponsors (Q1-Q2 2018).

  • The creation of a marketing infrastructure for the target audience: Funnels, content, and marketing automation (Q2-Q3 2018).

  • Launch of a marketing campaign with a transparent structure based on KPI (Q3 2018 - Q1 2019).

  • Special projects and PR partnerships to raise awareness (Q3 2018).

  • Implementing mechanics for customer success in the marketing structure for all TAs (Q4 2018).

Summing up, we would like to note that the token sale marketing strategy of the TEAM project duplicates the token sale strategy for the ACE token; however, its efficiency should be greater.

For the purposes of financial modeling, TokenStars divided the ecosystem of TEAM into two verticals and designated the prerequisites for its development as follows:

  1. Traditional sports categories: soccer, basketball, hockey.

    • This vertical attracts many fans worldwide. In addition to high wages, soccer and basketball stars also earn from sponsorship deals. Sometimes revenue from advertising is much higher than wages.
    • Long-term development of junior athletes (from junior to professional) with an ensuing prospective long-term payoff.
    • The basic requirements for financing at a younger stage are usually covered by professional clubs.
  2. Modern sports category: Poker, eSports.

    • Stars (juniors as well as pros) from this category require funding for training and participation in tournaments.

    • Returns are very fast (3-12 months), compared to the long-term development of players in traditional sports.

    • The income for stars of poker and e-sports depends primarily on prize money earned in tournaments with a relatively small proportion for advertising (about 5-10%).

For the traditional sports category, TokenStars modeled the average distribution of a player's income (based on soccer, hockey and basketball statistics) according to age and professional achievements.

Platform commissions:

  • 15-30% percentage of advertising from professionals and juniors.

  • 5-70% fees from future income of juniors, depending on the industry.

  • 20% of net amount of an advertising contract (excluding local taxes).

  • 20-25% of proceeds from sponsors.

  • 5-10% of salary and prize money for future stars in traditional sports.

  • 50-80% of prize money in modern verticals.

  • Up to 75% TokenStars has a priority right to revenue before a junior would repay initial funding.

Estimated revenues for the platform (based on a scenario of having achieved a target of $15m):

In the next 11 years TokenStars is planning to attract the following:

  • The promotion of 65 professional sports stars (in traditional sports) for promotion and advertising. 20% commission from advertising contracts.
  • Financing 15 juniors (traditional sports). As can be seen from the plan, the platform will begin to attract juniors in its third year of existence; commission will amount to 60% of wages and bonuses until age 18, and 20% from advertising contracts. After reaching adulthood, platform commission from wages and bonuses will be reduced to 5%. Commission from advertising is standard - 20% from the contract.

  • Funding 33 prospective players (from modern sports verticals). The percentage of commission from prize money will increase from 13% to 19% over 11 years.

  • Estimated accumulated revenue for the 6-year scenario is $29m; revenue for the 11-year development of the platform should amount to $95m.

In the first years of the project’s development, cash flow for the agency will be generated by revenues from professionals (in traditional sports), from advertising contracts and revenues from prize-winning athletes in modern sports. Income from juniors will enable the scaling of the business in the future.

Evaluating the economic model, we can say that it is worked out in detail, although only a positive scenario of platform development is considered.

The TEAM Token issued by TokenStars is a utility token; it is a means of payment on the TokenStars platform. Using TEAM tokens, participants can pay for goods and services and also use them for rewarding sports fans. By spending and earning TEAM Tokens, users increase the demand for the token and the platform’s turnover.

TokenStars also provides the opportunity to express opinions through voting on the platform. All holders of TEAM Tokens have the right to vote; the number of votes available depends on the number of tokens owned by the user (analyst) (1 voice = 1 token). Consequently, the more tokens a user owns, the more important his opinion is. This system will ensure the token is in demand.

Unlocking of the project team’s own tokens will not be done at a fixed time interval, as with most projects, but with stages of development of the platform, i.e. the unlocking of tokens is tied to the roadmap. However, a quarter of the full team token amount will be unlocked immediately after the listing of the token on exchanges. This may affect its price.

A large bonus of up to 60% could negatively affect the price of the token. Such a bonus will attract short-term investors at the ICO stage wishing to take profit as soon as the token is listed on exchanges.

Having analyzed the token’s economy, we believe that participation in the ICO and the acquisition of TEAM tokens could be of interest both to short-term investors, due to large purchasing bonuses, and for long-term ones, as we can talk about prospective growth for TEAM Tokens; this will largely depend on the popularity of the platform. If the team manages to realize its plans and create demand for the platform, TEAM tokens will have significant growth potential.

 

 

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.