Usechain Rating Review
|Start ICO||08 Aug 2018|
|End ICO||08 Aug 2018|
The Usechain project has been rated as "Stable”.
The Usechain project is another representative of the Blockchain 3.0 family. If not managed as marketing motivation of such positioning, the goal of the project is to improve the existing technology and bring blockchain to a more accessible level.
The Usechain network is designed to improve the performance of blockchain with the preservation of decentralization. The team expects to receive such effect due to the introduction of a new mechanism of consensus (RPOW), node authorization technology, sharding, and other decisions. These solutions are not yet revolutionary for the market as a whole, but against the backdrop of failures of the nearest competitor, EOS, they can have a positive effect.
The Usechain project is led by a professional team where many managers come from leading Asian universities. It seems that the founders have worked out the idea well, as the project documentation leaves a very positive impression.
The project has a large number of partners and extensive business support. This fact is important for maintaining attention to the project and improves its position relative to some competitors. The regional focus of such partnerships is somewhat embarrassing, but it often happens with projects from the Asian region.
All of the facts above indicate that the Usechain project is still at an early stage. Wide access to testnet has not yet been provided for the community. We see certain risks in the roadmap timing as a very large amount of development is announced before the end of this year. There is usually increased attention from the community to such a project and possible bugs may be criticized sharply. We hope that the team will make a huge effort to make a high-quality release.
There is some pressure on the project from the competitors. Frankly speaking, new generation blockchains are "diminishing". New projects cannot count on record amounts of funds raised as EOS. Therefore, in order to stimulate interest in the community, the project needs to show good real network tests.
The Usechain project is perceived as a good attempt to warm up interest in the idea of "ubiquitous" blockcchain once again. Indeed, it seems that the process of popularizing decentralized networks is stagnating. A good performance of the network with the preservation of full decentralization seems relevant. The only thing that is a bit controversial is the transition to conditional anonymization since user identification is theoretically possible.
Usechain is THE FIRST MIRROR IDENTITY BLOCKCHAIN; this is how the project slogan sounds on the website. Usechain is a project for the development of blockchain 3.0 where the authorization of nodes, sharding, and other solutions are used as advantages to improve the platform efficiency. It is clear from the marketing materials that the team considers the KYC procedure a key advantage of its blockchain («ID-Enabled Consensus/Security/Privacy»), explaining that de-anonymization with preserved privacy will make it possible to deprive many of the key weaknesses of blockchain. This claim can be challenged but the market is wide and there is demand among distributed networks with partial anonymity.
From a legal point of view, the project is represented by Usechain Technology Asia Foundation Ltd, registered in Singapore. The Usechain Foundation is a non-profit organization that has been created to support an open source ecosystem like Usechain.
The project has many partners both within the framework of the ICO and business partners who can implement the ecosystem in their products. The partnership characteristics are announced on Medium blog. All the declared partners have a regional focus one way or another which has been the case for the whole project. The English-speaking group on Telegram has about 58 thousand subscribers, whereas the Chinese group has 77 thousand participants.
The Crowdsale runs in several stages: a private pre-sale with a different discount size and the ICO. The team does not publish the results of the crowdsale, as well as some ICO parameters.
Hard cap: 4 500 BTC
Soft Cap: 1 350 BTC
Price: 1ETH = 75000UST
Token: UST, standard ERC-20
Accepted currencies: ETH; BTC
Size of emission: 20 000 000 000 UST
45% - For Sale
20% - Community
15% - Technical community
15% - Team
5% -Marketing & partner
On sale: 9 000 000 000 UST
Allocation of funds raised:
- If the soft cap is not met, all funds will be returned to investors. If the hard cap is not met, all unsold tokens will be burned.
- The portion of UST for team rewarding will be released at 25% every 12 months.
- The team will publish an operations report each quarter to ensure transparency.
- A freezing program is provided for tokens issued in the period of the crowdsale: 25% unlocked before exchange listing, 25% unlocked every 2 months thereafter, with the total unlocked after 6 months.
The ecosystem being developed is both a service and a medium for developing third-party products. Therefore, when characterizing the services of the project, we will concentrate on the description of blockchain and its parameters. Important points will also be the breadth of blockchain application, the opportunities to introduce it to the market, and the strengths and weaknesses of the selected technical solutions.
As for the design of the ecosystem architecture, there are application services, application components, application protocols, and a core framework of the underlying public blockchain.
Although Usechain is a new generation blockchain, it relies on the principles of building distributed networks of the past generation, so innovation here is essentially an upgrade of existing solutions - the addition of some technological features. Behind marketing slogans, such as “identity”, there is the procedure of user authentication, the need for which is in question depending on the applicability of blockchain.
To interact with blockchain, users need to go through the authentication process by applying Usechain cryptographic solutions. Only the mapping process is recorded in the chain. The rest of the information is stored in confidentiality and does not enter the blockchain system.
The mapping procedure between the identity certification number and the public address is carried out with the participation of a special committee used by the secret sharing procedure. None of the members of the committee individually can determine the identity of the public address, but this is possible with information from all members of the committee.
Within the framework of Usechain, Randomized Proof of Work (RPOW) was chosen as the consensus mechanism. This is a modified version of PoW which is successfully used in blockchain systems but has weak points in terms of protecting the network from external attacks, high resource consumption, and so on. The RPOW mechanism is similar to PoW, but the nodes that will be occupied in forming blocks are selected randomly. The complexity of creating a block will automatically be adjusted to the capacity of the randomly selected node. Thus, there is no need for a constant power race, i.e. the nodes will be more effective in their work with less cost to seek consensus.
The connection of the RPOW mechanism and de-anonymization of the network can be considered a new solution in terms of Consensus. In this regard, fraud will become impossible and many security problems and legal issues will be solved. At the same time, absolute anonymity is considered by many to be almost a key advantage of blockchain as the business model of many services is based on anonymity.
The network will also use sharding through which the speed of confirmation of transactions will grow and the network will be protected from double-spending attacks. Implemented sharding will be based on the user’s account address. The mechanism is the following: the transaction of the user whose address belongs to a particular part of the network can be confirmed by the nodes of this shard and does not require confirmation by the entire network.
The blockchain system being developed will be supported by its own virtual machine, Identity Virtual Machine (IVM). Accordingly, there will be smart contracts that can be an addition to EVM, or can work with all the necessary external sources of data such as API, sub-chains, other blockchains.
In the event of a dispute, accounts and blocks that correspond to questionable operations will be frozen and the remaining nodes of the network will operate in standard mode. The fate of dubious blocks and accounts will be decided on a special committee. The committee will be voted in by accounts which are approved by certificate authority (CA).
The Usechain ecosystem consists of three groups of users:
- Users: Individuals, assets, things and objects which can be used by blockchain after passing the verification.
- Application Participants: Individuals and organizations that can verify the authentication of others and contribute to the ecosystem development. It can also be Service providers who will develop their own applications and expand their business based on Usechain.
- Technology Participants: the Usechain development team, as well as third-party participants whose solutions can be used in blockchain.
The potential for using blockchain is quite wide, but everything is standard here - applied functions are performed by IVM and smart contracts through which it is possible to create complex and multilevel ecosystems and services based on Usechain. This blockchain is similar to Ethereum in potential, but its demand is potentially higher due to technical innovations. Usechain is faster, safer, and more efficient.
The team identified the relevant section in the WP to describe the potential use of blockchain where it resulted in 11 cases of application of the ecosystem: Cryptocurrency Payment; Decentralized Financial Services; More Credible Sharing Economy; More Efficient and Secure loT Applications; unattended investment and equity management; Decentralized Insurance; Decentralized Exchanges; digital content production and trading; tution fund; games; forecast.
Decentralized Financial Services
The Usechain project refers itself to the Blockchain 3.0 class, a class of networks that extend the capabilities of existing ones. The founders positioned their project correctly and did not succumb to the temptation to join the marketing race of versions (3.5, 4.0, etc.)
The division of blockchain generations remains conditional but it is usually assumed that the first generation is Bitcoin, the second one is Ethereum, the third is EOS, and the fourth is ... The ellipsis is put in this case deliberately, since the definition of the fourth generation is still a blurry concept.
Schematically, the development of networks is represented on the diagram which has been taken from the article “2018, Blockchain 3.0! Are you ready?”
It is clear from the diagram that at first there was a distributed registry (Bitcoin), then smart contracts were added (Ethereum), and, finally, a more general DApp development environment came (EOS). But despite the fact that EOS is an authoritative and well-known project, the position of the "bronze" crypto project has not yet been taken. There are several reasons for this, but, first of all, the criticism is directed towards the current implementation of the project. More on the criticism of EOS can be read here. To summarize:
- The DPoS architecture is imperfect and vulnerable to attack.
- The promised crosschain does not work.
- The convenient infrastructure for development of DApp is not implemented.
In any case, the problems of the EOS project are not the main topic of this review.
The Usechain project team understands the “constellation of forces” in the market and positions its project well, playing on the weak sides of the current development of blockchain:
This comparative table from the Usechain WP represents the project as the best alternative to EOS. A new mechanism of consensus allows the restoring of full decentralization, while retaining a good performance.
The important topic of blockchain anonymity is one that is deeply debated. The founders of Usechain see in this network feature an obstacle to the widespread adoption of the technology. Indeed, many services, especially financial ones, are tied to the procedures of customer identification and transactions, and it is possible that open protocols without conditional anonymization could be considered as attractive.
However, the emphasis on the anonymity seems to be controversial in the context of the blockchain attractiveness development. Blockchain has grown from a hype buzzword to a category of technical components of the forthcoming 4th industrial revolution. The industry understands all the weaknesses and strengths of technology, and if it has not yet penetrated into our lives deeply, this time has not yet come.
In any case, the current pessimism in the market should not stop the process of blockchain development. The Usechain team is trying to contribute to the overall trend but a competitive environment can create difficulties for widespread expansion. In addition to the widely known EOS, blockchain 3.0 includes IOTA, DFINITY, COSMOS, and others.
It will be impossible to attract serious interest to the project without a productive and demonstrative testnet. Usechain has large development plans up until the end of 2018. During this period, the fate of the network will be determined.
Team and stakeholders
The Usechain project boasts a strong team of professionals. In addition to large number of specialists with a PhD degree, the team has a long working experience in the industry and a good track record. This has become a rarity in ICO projects, but the Usechain team has a large number of specialists from the academic community.
Much of the project speaks about high professionalism of the team, but, first of all, we would like to note the approach to writing the documentation. The information is presented competently, consistently, and clearly, and the technical documentation is made at a high level.
It seems that the founders take their project seriously and believe in it, which is undoubtedly a welcomed advantage.
The Usechain team is well-balanced; all the main directions of the project are presented. Unfortunately, the descriptions are only for management, but we hope that the selection of other specialists will not be a problem for the core team.
Henry CAO, Founder,CEO
Finance Professor at Cheung Kong Graduate School of Business, Head of the Department of Finance, Founder of the first Finance MBA program in China, Member of the Finance Society of America. Managing director of China Blockchain Application Research Lab, taught at the University of California at Berkeley, the University of North Carolina, Chapel Hill, admitted to the USTC gifted class when he was 13 years old, Yale University/ UCLA PhDs.
Baohong SUN, Co-founder, CSO
Marketing Professor at Cheung Kong Graduate School of Business, Dean’s Distinguished Chair Professor of Marketing, Associate Dean, Former Chaired Professor at Tepper Business School, Carnegie Mellon University, editorial board member of "Marketing Science", "Journal of Marketing" and "Journal of Marketing Research", The world economic forum on future behavior, Renmin University of China, BS, USC PhD.
Shengli ZHANG, Chief Scientist
Senior blockchain specialist, wireless network technologist, presenter of Physical Layer Network Coding, Professor at Shenzhen University, Vice Director of the SZU Blockchain Research Institiute, Visiting Professor at Stanford University, IEEE Senior Member, Senior member of China electronics society, Holder of 3 national invention patents of blockchain, USTC BS & MS, CUHK PhD
Feng ZHANG, Senior Financial Specialist
"Thousand Talents" Expert, near 30 years of experience in QIHF globally, MD of Asset Management Dept of Citigroup/ Morgan Stanley, GM of Stock Investment Dept of Bosera Funds, Investment Director of BoCom-Schroders Fund, Tsinghua BS, UC Irvine, PhD
Erik XU, COO
Near 10 years of experience in the Internet and information security industry in General Management and Marketing, Serial entrepreneur, Served as Vice President for Beijing YunJiang Technology Limited, Head of the information security project at National Information Security Engineering Center, Executive Director of the National Key Technology R&D program during the 12th Five-year Plan Period, responsible for a number of national information security and key manage center (KMC) projects, Member of National Information Security Standardization Technical Committee and Big Data Working Group, MBA from Cheung Kong Graduate School of Business.
Andy ZHOU, CTO
More than ten years of technical development experience. Multiple entrepreneurs, having comprehensive technical ability. Have a deep understanding of big data processing, AI, distributed network system and architecture design. In 2015, touched block chaining technology and designed the form of centralization of digital currency. As early as 2005, designed and architected decentralized communication software and content communities based on P2P communication technology. Previously in iFLYTEK, HUAWEI acted as senior research and development Engineer, In Beijing United Electronics Co. and ChuKong Tech. served as Technical Director. Double bachelor's degree from University of Science and Technology of China (USTC) and MS from Chinese Academy of Sciences (CAS).
Lin ZHAO, CPO
Near 10 years of experience in the Internet and new retail industry, experienced in platform building for horizontal e-commerce, O2O, Eco-friendly product and service specialist, Chief Product Manager of the leading O2O E-commerce Bee Quick.
Amanda SHEN, CMO
Public Relation and marketing experience for 12 years, Marketing Strategy Manager of FedEx China, Marketing Director of Beijing XinRongJunYue real estate consultants LTD, MBA from Cheung Kong Graduate School of Business.
Gengnan SONG, Global Community Developer
Nearly 10 years of professional experience working with the Internet, community operations and businesses. Over 8 years of community operations experience at Tencent, covering products from early stage PC community product Discuz! to Tencent micro-communities on mobile Internet and Tencent Interest Tribes. She is the former Business Director at a well-known platform for evaluating catering services in China.
Liang ZHANG, Technical Architect
Many years of experience in digital currency exchanges and blockchain development. He is the former Senior R&D Engineer at Microbit Cryptocurrency Exchange and the Gibraltar National Blockchain Exchange. He started to participate in blockchain projects in 2015, and he has had deep research of the current mainstream blockchain technology.
The Usechain project has the support of 6 advisors. A list of advisors with their work experience is given below. The list turned out to be rather promising; the presented persons have great experience both in business and in the technical sphere. We expect that the attracted specialists will be able to positively influence the quality of the implemented project.
Senior expert of Blockchain, Founder & CEO of 5Miles, Founder & CEO of Cybermiles (CMT), Served as Co-Founder & CTO for Lightinthebox (LITB), the first GM of Moible Taobao, China University of Science and Technology BS, SMU PhD
Started to do research and promote blockchain applications in 2015, was among the first to propose the concept of Energy Internet in China, Co-founder of the first Energy-Blockchain Lab in the world, Chief Blockchain Expert of Cinda Securities Co.,Ltd, Former member of E-residency of Estonia, Major member of the Technical Working Group China of Hyperledger Project.
Professor of Finance and Economics, Professor of International Affairs, and N.T. Wang Professor of Chinese Business and Economy, Columbia University, Chief Economist and Director General of Economic Research and Regional Cooperation, Asian Development Bank, 2014-2016, Director, The Jerome A. Chazen Institute of International Business, Columbia Business School, 2011-2014, Research Associate, National Bureau of Economic Research (NBER), Research Fellow, Center for Economic Policy Research (CEPR), Member, Council on Foreign Relations Non-resident Senior Fellow, The Brookings Institution Director, NBER Working Group on the Chinese Economy.
Founder & President of DataMesh, Chairman of Central Big Data Development Committee, Founder/Director of Shanghai Pingfu Asset Management, Former Vice President of Fortune Link Venture Capital Co., Ltd, Over 10 years of experience in investment and business management.
Senior Internet Business Specialist, Chairman of the Board & CEO of AdChina, Founder of Lakeshore, Served for E-bay, Philips, and Alcatel-Lucent, MIT EMBA.
Founder & CEO, Distributed Credit Chain. Serial entrepreneur in the internet and Fintech industry. He led a team to develop internet-based credit systems for over a dozen of trusts with a multi-billion USD annual loan facilitation amount. Ph.D. candidate in Finance at The London School of Economics and Political Science with research focus on finance and cryptoeconomics. MS in Financial Economics from Oxford University, MS in Statistics from Yale University, and MA in Statistic as well as a bachelor’s degree in Electrical Engineering from Nanjing University.
China National "Thousand Talents" Expert, PhD of the Wharton School at the University of Pennsylvania. Master’s from Yale University. Current chair professor of finance in Tsinghua PBCSF. Director of financial asset management research center in National Finance Research Institute in Tsinghua University. Former chair professor of Carlson School of Management at the University of Minnesota. Executive assistant dean of Economics and Management at The Chinese University of Hong Kong, Shen zhen.Researcher at the Federal Reserve Bank Dallas since 2011. Mainly engaged in the theoretical and empirical research on behavioral finance and macro-finance. Research results achieved many awards, including the First Prize of Smith-Breeden.
The UST token issued during the ICO is a standard utility token. We do not see security functions in it and the risks of recognizing the token as such are minimal. UST is ERC20 a standard issue under the Ethereum smart contract. As the Usechain protocol is developed, ERC20 tokens will be exchanged for intra-platform Usechain units. As a result, UST will have the following functions:
- Encouraging members of the Usechain community to provide computer resources by transaction fees and the use of Usechain smart contracts.
- Settlements in the framework of third-party services and applications executed on the basis of the Usechain blockchain. Since the developed blockchain is universal, it can be a tool for many solutions and platforms, so the calculations within such services will be related to UST.
The Usechain documentation has a concise description of the token economics. This can be justified by the fact that there is no need to describe ways to increase the value of the token additionally if they correspond to the traditional ones in existing blockchain systems, for example, Ethereum. In other words, we did not find any unusual solutions or ways to stimulate the future value of the project’s token.
Analysis of factors affecting future value of token
It has been a long time since blockchain 2.0 became popular. There was a whole industry based on Ethereum where this blockchain became a tool of crowdsale and a technical basis for platforms in different sectors of the economy. Blockchains of the new generation set themselves the task not to change the sphere, but to improve the effectiveness of existing solutions through innovations. As a result, it is fair to believe that Usechain, as a typical representative of the generation 3.0, will rely on the established market of technology business and the individuals involved in it.
UST, being a Utility token, is closely related to the success of the Usechain blockchain in the market since the more transactions on the platform, the greater demand and popularity there are for reference currency. The Usechain project has fine scalability - the team is developing favorable conditions for completely different businesses and the nature of the consensus mechanism implies a high speed of transaction confirmation even at peak times. Technically, there may not be peak hours at all due to the complex flexible identification of mining. In addition, Usechain also allows anonymous accounts on the network, although their capabilities will be severely limited compared to accounts that have passed the authentication procedure (for example, they cannot mine).
We would also like to highlight the competitive case as a long-term cost factor of UST. As far as the popularization of distributed networks is concerned, more and more start-ups are trying to overcome the problems of existing blockchains, not just finalizing the idea, but offering something completely new. As a result, some projects boldly declare the development of the 4th generation blockchain. In addition, the Ethereum team is not standing still, seeking to develop more and more effective hard forks. All of this does not make the long-term attractiveness of UST obvious as there is no pullback from competitors and many similar products have occupied or occupy a market share. In the context of competitors, the Usechain roadmap does not seem too close: the release of the main net is scheduled for the end of the year and the main development (consensus algorithm, smart contracts, etc.) will be developed in Q3 2018. However, it could be worse as it is unlikely that the industry will move forward dramatically in a few months.
To summarize, Usechain gives the impression of a strong project with a clear positioning in the market, and the UST token has the potential for long-term growth. At the same time, the project does not have the most favorable competitive environment and it has to accelerate its development and its market expansion in order to remain in the forefront of the blockchain 3.0 industry.
Analysis of investment risks
New generations of blockchains usually cause an increased interest from the community which helps to popularize projects, but, at the same time, the level of demand from the community is growing.
The Usechain project is at a rather early stage of development which makes it difficult to assess all the possibilities of the prospective network. From our point of view, one of the risks comes from the roadmap timings. On the one hand, many important stages of development will be completed in the near future. On the other hand, the presence of significant bugs will be perceived acutely. We hope that the competent team of the project will be able to cope with this challenge.
The aim of the founders to deanonimize the network is controversial. Blockchain is definitely criticized for the problems of user identification, but, in many ways, hype around digital currencies was caused by decentralization and conditional anonymity. It is a risky step to give up the anonymity of the network.
The Usechain project has broad support from the regional business and it has already acquired a large number of partnerships, but the regional focus usually negatively affects the investment attractiveness of tokens for the western community. An extensive marketing program can partially compensate for this effect.