Vestarin Rating Review
|Start ICO||05 Mar 2018|
|End ICO||04 Apr 2018|
We have reviewed project's progress as of December 2018 and mentioned that the team is behind their initial roadmap in terms of both adoption and technical features. Therefore, we decreased rating score to "Risky-"
Growth in the worldwide popularity of cryptocurrency continues. More and more projects are entering the market listing their tokens, and it is hard for a beginning investor to understand all this diversity. For this reason, some of the project’s services such as the creation of start-ups based on blockchain technology, investment and ICO as well as access to information may be demanded by the market.
At the same time, we note a number of factors that could have a negative impact on the future of the project and the forthcoming ICO:
Firstly the financial model of the project is based on forecasts for growth in the number of users significantly exceeding the growth rate of the number of active users of crypto wallets. We consider these expectations overstated.
In addition, unlocking the team’s tokens will occur during the beta testing phase of the platform which could significantly reduce further motivation of the management if the project encounters any difficulties in the development process.
A lack of experience in managerial positions on the part of employees and a lack of previously implemented projects should also be considered as weaknesses of this start-up.
There is no working product at this stage (the alpha version is planned to be launched only after the end of the ICO); this may also influence investors’ decisions regarding purchase of VST tokens at the ICO stage.
All these factors, as well as those indicated in the "Analysis of factors affecting the future price of the token" and "Analysis of investment risks" sections prevent us assigning a higher rating to the project.
General Information About the Project and ICO
Vestarin is a project for creating a marketplace based on a mobile multifunctional application, which aims to create a single community for all types of crypto market participant:
- Specialists in the crypto industry
- Founders of start-ups
- Cryptocurrency holders
Vestarin is trying to solve a number of issues for the crypto industry to promote the growth of the popularity of cryptocurrencies and consequently their wider use, itself using blockchain technology.
Smart contract platform: Ethereum blockchain
Contract type: ERC-20
Total emission is 70,400,000 VST
Start date: January 30, 2018
End date: February 28, 2018
Token rate: 1ETH = 3000 VST
Soft cap: 2000 ETH
Hard cap: 3500 ETH
Maximum amount of Tokens for sale: 10,500,000 VST
3000 ETH were raised during the Pre-ICO stage.
Distribution of funds raised at the Pre-ICO:
- 60% - development team
- 35% - PR and marketing
- 5% - advisors and managers
Start date: March 5, 2018
End date: April 4, 2018
Token rate: 1ETH = 2000 VST
Soft cap: 3500 ETH
Hard cap: 35000 ETH
Accepted payment: ETH
Maximum amount of Tokens for sale: 47,200,000 VST
Minimum transaction amount: 1 ETH
Maximum transaction amount: unlimited.
A table that reflects increases in the price of VST depending on total number of ETH collected during the ICO is given below.
Revenue from the token sale is planned to be distributed as follows:
- 45% to the development team
- 20% on marketing expenses
- 15% for integration of platform stores and services
- 12% on operational expenses of employees and office
- 5% on legal support
- 3% - benefit to the founders and developers of the platform
VST tokens will be distributed at the end of the ICO. Tokens unsold during the Pre-ICO and ICO will be burned.
Unlocking the founders’ tokens will occur 90 days after the ICO.
Description of the Services and Scope of the Project
The platform will be multilingual (support for 15 languages is stated); Vestarin’s mobile application will provide its users with the following options:
- Staging ICOs – an ICO launched within the framework of the platform will be studied by experts and the community. The reputation of these ICOs will be formed on the basis of assessments and feedback from platform users; in addition, a table with detailed information on the number of attracted funds, users, etc. will be created - all this is aimed at identifying and screening out scam projects among ICOs.
- Start-ups registered on Vestarin will be able to find a team, specialists and investors for their implementation - a parametric search section will be used in the platform application for this purpose (each Vestarin participant will have a profile with an indication of his specialization - investor, analyst, designer, marketer, financier, etc.)
- By integrating shops, restaurants and other establishments within the platform, users will be able to pay them in VST tokens as well as assess the quality of a service, creating the reputation. Stores with a low reputation will be removed from the platform;
- Exchangers will provide ecosystem participants with the facility to exchange cryptocurrencies. Reputations of exchangers will be created by user assessments. In the case of a low reputation a trader would be withdrawn from the platform;
- The "Articles" section of the platform will enable the compilation of various articles on blockchain technologies in one place with links to the original sources, which will enable the Vestarin community to be constantly up to date on the latest news in this field.
- All participants in Vestarin will be able to communicate with each other via chat (group or private one) and through the forum. The chat functionality will also include VST transfers to other users of the platform.
Any user registered on the platform will be able to buy tokens through his personal office, as well as submit the following applications:
- Application for integration of an ICO
- Application for integration of an exchanger
- Application for integration of an online store
- Application for the integration of offline businesses (shops, cafes, hotels, restaurants, entertainment, etc.).
Vestarin specialists check and evaluate applications. If the application has been approved, a user contributes a commission fee for its activation (except for online stores, the integration of which carries no fee). After approval and activation, the ICO appears in the relevant section of the platform; other applications require additional conditions:
- At the moment of activation for an exchanger, a smart contract is created for monthly charge-off of the platform fee. In the event that funds on an exchanger account are insufficient, it will be excluded from the exchangers section after 5 days (unless the balance has not been replenished for an amount equivalent to the monthly fee within 5 days).
- The online store appears in the corresponding section after activation. Prices for goods are set in VST.
- Offline business integrated within the platform - shops, restaurants, cafes, hotels, etc., will also accept payment for goods and services in VST.
The main condition for the integration of offline business in the platform is to provide users with cashback discounts on the goods and services provided. Platform users will be able to find integrated offline stores, cafes, hotels, etc. by geolocation, using the platform application.
We think that the platform could be in demand among an increasing number of participants in the crypto industry. Holders of cryptocurrency will be able to receive services and goods, using the reliability and transparency provided by blockchain and smart contracts. Integration into Vestarin gives start-ups conducting ICOs an opportunity to have their platforms evaluated by a community that includes professionals in the crypto industry, which could also bring additional crowdfunding participants. Multilingual facilities are an additional factor that helps attract more users to the platform from different countries; however, it is worth remembering that cryptocurrency operations are not permitted in all countries.
The aggregate capitalization of all cryptocurrencies represented on the popular analytical service Coinmarketcap is currently $455.1 bln.
Bitcoin is still the leader in the Coinmarketcap top 10. Recently, many altcoins have demonstrated growth. The total daily trading volume for cryptocurrencies is $17.7 bln.
In early 2017, market capitalization of cryptocurrency barely exceeded $18 bln. At the end of the same year, capitalization reached $769.1 bln. Currently, market capitalization has decreased by almost 1.7 times compared to the end of last year.
All of this is due to the fact that digital assets are characterized by increased volatility and unpredictability. The reputation of cryptocurrency and uncertainty with its regulation in most countries remain one of the main issues that regulators and participants have yet to solve.
The supply in the ICO market is also expanding rapidly. The number of ICO projects exceeded 300 for three quarters of 2017 - this is more than one ICO per day. According to Coindesk and Autonomous Next reports:
- For the first half of 2017, blockchain projects attracted $797 mln through ICOs while "traditional" venture investment attracted only $235 mln.
- 201 ICO projects collected about $3 bln for the first three quarters of 2017.
- The number of ICOs not reaching their goal is growing [https://hackernoon.com]: in June this was 7% of projects, 54% in August, and 66% in September.
- There are more and more institutional investors participating in token sales in the market; there are already over 100 [https://next.autonomous.com].
If we consider the success of the ICO market by segment, the picture is as follows:
It is important to take into account not only successful projects but also failures. For this, categories that included projects that collected the least amount of funds and categories with the longest average closure were considered. It turned out that the smallest categories, containing only one project, are "Insurance" (InsureX), "Education" (Lunyr), "Recruitment" (CoinJob), "Charity" (TribeToken).
Since the Vestarin project provides marketplace services, unites several segments of the ICO market on its platform and plans to operate in an actively growing market, this could certainly increase the chances for its successful launch and the subsequent expansion of the business. The rapid growth in popularity of crypto assets does not pass unnoticed for everyone; more and more participants transfer their assets from classical markets to the cryptocurrency one and this trend is only intensifying.
Global marketplaces have existed for a long time, so there are many giant platforms which are already operating successfully but settlements on these platforms are implemented in fiat. These include of course AliExpress, Amazon and Ebay.
Among the main blockchain competitors for the Vestarin project, we distinguish projects such as:
Cryptaur — a decentralized Ethereum-based ecosystem which is a platform for a potentially unlimited number of specialized P2P services (dApps), through which suppliers and consumers of a wide variety of products and services can interact directly, thereby increasing economic efficiency for all transactions performed within the ecosystem. Features of the Cryptaur ecosystem include:
- The universal unit for mutual payments and rewards is the Cryptaur (CPT) token.
- A multifunctional payment platform, Cryptaur Pay (CPP).
- A global system for protecting users’ rights (URPS).
Transactions within the Cryptaur ecosystem will be implemented in their own crypto token, Cryptaur. Another function of Cryptaur tokens will be rewarding participants for active use of the ecosystem and for contributing to its development (several types of crypto payback, sharing offers, etc.).
According to information from the website, the project has collected 59,996 ETH.
Storiqa – a marketplace platform with a completely self-sufficient ecosystem designed to create stores featuring all the innovations of e-commerce, including an ability to pay for goods by cryptocurrency and STQ token. The concept of the project lies in a combination of two ideas, the main being to unite producers worldwide into a single platform that will provide them with the tools to bring their unique products to the global market, while avoiding financial boundaries, intermediaries and complex bureaucratic delays with minimal transaction costs. The second idea is integration of cryptocurrency for system transactions and blockchain technology which makes all processes transparent and fair.
The ICO of the project has ended and the hard cap of $25 mln has been collected.
The Vestarin project has advantages over its competitors, as it will provide several types of service on its platform (more in "project services"), which will enable the project to occupy a niche in the market. We also note that the transition of giant platforms to cryptocurrency is quite possible given favorable conditions for the regulation of cryptocurrencies in countries where they are present. This possibility would create strong competition for Vestarin.
Team and Stakeholders
The Vestarin team includes 11 people and 5 advisors. Key positions are occupied by:
Said Radzhabov (Linkedin) – CEO
Founded the Vestarin platform in August 2017. Previously, he worked as an executive director of the trading company CryptoAngels, and has 5 years of experience in the Forex market.
Education: No information available.
Jana Alieva (Linkedin) – Business Developer
Has worked for Vestarin since September, 2017; has 7 years of experience in business development and strategy development.
Education: Wisconsin International University.
Alex Strakh (Linkedin) – Smart Contract Developer
Has worked for Vestarin since November 2017, and is developer of Smart Contracts for Taskfair. Engineer for software development company ISPRAS (Russian Academy of Sciences) since January 2007.
Education: Bauman Moscow State Technical University.
Vlad Palamarchuk (Linkedin) – Chief Technology Officer
8 years of experience in information technology, he has worked as chief technical engineer for various companies such as WayAppUkraine and MikeHexa.
Education: No information available.
Evgeniy Borisenko (Linkedin) – Legal Support
Senior Lawyer in the Association of Juscutum Lawyers since 2015, International Business, IT Business
- Odessa National 'I.I. Mecnikov' University
- Taras Shevchenko National University of Kyiv
The team has recruited 5 people as advisors including the following:
Reinhard Berger (Linkedin) – General Manager of PECUNIO from 2016, President of Valluga AG, ICO advisor. Involved in such projects as Auctus, MINER ONE, SocialMedia.Market, DIW Token, Bulleon as an advisor.
Bojan Oremuž (Linkedin) – Has worked for Vestarin since January 2018. 25 years of experience in networking. He was president of IT Cluster E-Aliansa, a member of IT government council, founder and CEO of EMMARES since July 2017.
Douglas Lyons (Linkedin) – Advisor, ICO coordinator; has extensive experience in risk management, Blockchain technology, main consultant of Pro Canada since 2014.
We note that the Vestarin project team is quite "young" with little experience in management positions. The team members do not have joint projects. However, there are specialists with experience in the implementation of blockchain technology and smart contracts, software development and law. The Vestarin project has strong experts as their advisors. The project does not have employees responsible for its financial aspect. In other respects, the team has all the necessary specialists able to implement this project.
A smart contract repository is available on GitHub.
Token name – Vestarin
Symbol – VST
Decimals – 18
VST tokens are intended for use within the platform for use at all integrated online/offline stores, services, restaurants, hotels and other establishments.
VST is an ERC-20 Ethereum blockchain utility token, available for storage in wallets compatible with this standard.
Tokens are used on the platform for the following purposes:
Rewards for certain actions (for advice, for developer work, etc.) from one platform member to another via chat.
Charges for activation:
When integrating an ICO.
When integrating offline business (offline stores, restaurants, cafes, hotels, etc.).
Monthly commission fees levied on exchangers.
Payment for online store goods; the platform charges commission for each transaction.
Payment for goods and services to offline businesses; the platform keeps a commission from each purchase and the buyer receives a cashback - a discount from the store, which returns a portion of the tokens spent.
In our opinion, the use of VST tokens on the platform will be in demand by users if enough online stores and offline businesses are integrated on the platform. This will enable these businesses to increase turnover and receive additional income in tokens, which they can exchange for fiat funds. Token circulation on the platform will be provided by the users involved, which will support the validity of using the token. Currently, the project has average activity on social media, an indicator that users are showing some interest in the platform and the upcoming ICO.
Analysis of Factors Affecting the Future Value of the Token
The growth in the number of stores and services will depend on the growth in the number of users on the platform, which in turn will determine the turnover rate of VST tokens and, accordingly, the dynamics of their exchange value. Any postponement or failure to implement announced development plans may negatively affect the price of the token. As the founders themselves note, the main pool of partners will be created with the working platform and according to the roadmap this will be possible by August 2018. Before this time, tokens will not experience a fundamental growth in their exchange rate. Currently, the project has arrangements for the integration of a construction company on the platform in the pipeline.
The financial model of the project is built on data based on number of platform users. Thus, according to the model, from June 2018 to May 2019, number of users will increase 50 times and amount to more than 10 million people. It should also be noted that according to research by the University of Cambridge, the number of active users of crypto wallets was 5.8 million as of September 2017. In comparison with 2016, the growth in the number of active users was 20%. Even if growth rate of the number of users is noticeably accelerated and this figure reaches 10 million by June 2019, we consider it unlikely that they will all use the Vestarin platform. This exemplifies the management’s overestimated expectations regarding the project’s financial results.
In addition to the above, despite the fact that the crypto market is experiencing an increase in popularity, it remains somewhat incomprehensible for a large number of people. Many still prefer to stay away from non-fiat transactions. The main increase in numbers of crypto enthusiasts is due to a desire to earn on growth of the exchange value of cryptocurrency. People who place orders with online stores prefer transactions in fiat, since this is a guarantee of service and receipt of goods; these mutual relations are legally regulated.
Revenue for the Vestarin platform will be obtained through the following commissions:
- 5% of turnover of integrated online/offline stores.
- 5% of turnover of integrated institutions.
- 5% of turnover of integrated entertainment and services.
- Monthly rate for crypto exchangers.
- Fixed payment for ICO integration.
Platform users who purchase offline products and offline business services will receive cashback tokens. Providing cashback is a prerequisite for the integration of offline stores/businesses on the platform.
The platform provides a buyback and burn mechanism. The platform will systematically buy VST tokens on exchanges and burn them. 50% of the total revenue of the platform will be allocated for this purpose. This process will reduce the total number of tokens in circulation, which will have a positive effect on VST rate. The team does not disclose when tokens will be bought back from the market.
10,500,000 VST tokens were sold at a special price with 56% discount for early participants; this led to achievement of the soft cap during the Pre-Sale. 3000 ETH were collected (the hard cap for the Pre-ICO was set at 3500 ETH). This indicates interest from short-term investors in the ICO and it is likely that they will sell tokens on exchanges after the start of trading to fix profits to the amount of the discount received. The withdrawal of such investors from the project will not have a significant impact on the exchange price of tokens; however, it should also be taken into account in assessing whether to purchase tokens.
According to the Vestarin roadmap, an alpha version of the product will be launched and tokens will be listed on exchanges after the ICO. This will contribute to the liquidity of VST.
Investment Risk Analysis
We note the following risks for the project:
Over the past year, the number of projects wishing to stage ICOs has significantly increased. There is increased competition among ICO projects; the market is overloaded with offers.
The rate for VST in the ICO period is pegged to ETH. Given the high volatility of cryptocurrency, this creates an additional risk, since in the case of an increase in ETH the price of one token becomes more expensive. At the same time, it is fair to note that if the ETH rate falls, VST becomes cheaper.
The project is planning its development in different countries and therefore, we also note the legal risks that Vestarin may face in different jurisdictions. At the same time, it should be noted that the project team understands the seriousness of this issue and is taking measures to reduce this risk. The founders could document their cooperation with the Law & Trust company for full legal support. A number of issues are currently being prepared for foreign partners.
In addition, we think that the financial model is built on exaggerated expectations from the founders regarding numbers of users. This risk is described in the "Analysis of factors affecting the future price of the token" in more detail.
The team’s tokens will be unlocked 90 days after the end of the ICO, i.e. at the beta testing stage. This could affect the price and further motivation of the team.