VTOS Rating Review
|Start ICO||24 Sep 2018|
|End ICO||03 Dec 2018|
We assign the VTOS project a "Stable” rating.
VTOS is a decentralized platform for posting videos, streams and other content in the form of a social network. This resource, according to its developers, aims to provide the kind of services made popular by various existing online platforms for social communication and posting content, but with the use of advanced technologies such as p2p networks to transfer data and an innovative service using torrents (WebTorrent).
The project is managed by an experienced team with a strong education and background. An additional advantage is the fact that the team consists of experienced IT specialists, marketers and analysts.
The idea of the project is described qualitatively, its competitive advantages and value are understandable to most users. The team have provided an alpha version, but the beta version will only become available in Q1 2019. Before that the VTOS platform is highly unlikely to attract regular users.
The project envisages two types of tokens: VTOS and VCT. The team is selling VTOS tokens in the course of the ICO. The tokens will be needed to launch masternodes, reward the masternode owners, stake masternodes and pay for the storage space provided by the masternodes. VCT tokens will be used as a payment instrument in the ecosystem which will reward users for being active on the platform.
General information about the project and the ICO
VTOS — a decentralized CDN & Social Network, platform for posting videos, streams and other content in the form of a social network. The team aims to create a user-friendly content sharing network that enables an effective, as well as a hustle free method to upload, purchase and share content. This resource, according to the developers, aims to incorporate services popular on various major online platforms for social communication and posting content, but with the use of advanced technologies such as the use of p2p networks to transfer data and an innovative service designed for working with torrents (WebTorrent.) Thus, VTOS will use a principle for encouraging activity that is different from other similar services: encouraging users in posting content and for activity on the platform, which is why the project is creating its own tokens. Therefore, the project lays its claim to change the established principle of operation of content aggregator sites where corporations, not users creating content, receive profits.
The team is launching an ICO to raise funds for revision and further development of the project, including moving it to the blockchain, marketing and entering the global market, as well as transaction costs.
Smart contract platform: Ethereum blockchain
Contract type: ERC20
Crowdsale – 55%
Team – 10%
Master Nodes rewards – 20%
Investors and Advisors – 10%
Bounty – 5%
Total issuance: 600,000,000 VTOS, no additional emission
If the soft cap is not reached, investors do not get a refund. A pre-sale was not announced.
Soft Cap: $4 mln
Hard Cap: $40 mln
Minimum buying transaction: no data
Minimum buying transaction: no data
Accepted currencies: BTC, ETH
Development – 60%
PR & Marketing – 20%
Operational costs – 10%
Venture Investors/Advisors – 5%
Legal – 5%
Token issue date: no data
Lock-up: 2 years
Escrow: no data
Description of the services and the scope of the project
The VTOS network will operate in the form of a social networks whose particular characteristics will involve the use of advanced technologies of posting content, data transfers, and resource management. The system of interaction between all participants will be built on blockchain.
• In general:
The project combines services for video and blog hosting. As for similar resources, content creators will create channels and other users will have the opportunity to subscribe to them, assess the material, share it with their friendlist and leave comments. It will be possible to watch videos in the project’s own video player, currently under development. The addition of live streaming and live chat services for sending messages and making video calls has also been announced. The team plans to release both a web app and other apps compatible with iOS and Android.
Since the project is based on blockchain and using an internal currency, an exchange service will also be implemented.
• Paid services:
Users will be given the opportunity of paid redesign of their accounts. Using VCT tokens, they will also be able to use the paid services offered by the project, for example, subscriptions for certain channels. The number and nature of additional features of the resource are not covered in detail.
• Possibilities for generating income:
- Firstly, it is understood that any activity of an individual, whether it be viewing or posting content, commenting, attracting new users, will be rewarded. Moreover, the reward amount will depend upon user level, calculated by accruing experience points. Rewards will be given in VCT tokens.
- Secondly, users will be able to submit their profiles or channels for placement of advertising content using the "advertising market" planned for development. Advertising will be sold for VCT tokens.
- The project also allows tokenholders to act as masternodes, and earn income by providing the system with data storage and processing requests to download and upload content. An increase in the number of nodes due to an increase in traffic is projected by the team.
We will describe the tokens in more detail in the 6th chapter.
Overall, we positively assess the idea of the project, its technical description, potential usefulness to the Internet community. The idea is complicated, however, in case of success, VTOS can offer a better product in terms of speed and usability of the services to their clients. In our opinion, the project will demonstrate its main advantages during high loads on the data channels with a significant volume of downloaded content and a large number of active users. Additionally, we note that the low cost of content is also a positive aspect of the project idea. However, the project will have to compete with the usual services of posting videos, etc. because the user indifferent to the method of building the platform will perceive the end product similarly to such services. Users can familiarize themselves with the project and have a look at the MVP at https://social.vtos.io/index.php/home/trending
Negative points include the fact that commercially encouraged user activity can often stimulate cheating with subscribers, likes, user level and provoke the increase of low-quality content.
The interaction of all participants of the ecosystem is presented by the team in the following form:
The choice of blockchain technology for the release of the program is justified, firstly, by the need for simple, transparent and automated way to transfer rewards to the users. Secondly, it will, in contrast to traditional video hosting services that use costly servers, reduce the cost of the hosted content by distributing the storage and display functions to masternodes or from user to user without involving third parties. Another factor that justifying the decentralization is the desire of the team to transfer control of the selection of the displayed content into hands of the user, thereby making the content focused largely on preferences and interests of participants in the ecosystem rather than on the increase in profitability.
4.1. Description of the market niche
There is no doubt that the project has the potential for an impressively-sized audience. Despite the fact that from the total number of global internet users (about 3.95 billion people) and social media users (about 2.48 billion) it is difficult to isolate users most interested in the blog sphere and video hosting, the fact that the growth of both indicators, as well as the fact that the most popular service for storing and displaying videos (Youtube) has more than 1 billion users, indicates that the total market capacity is more than sufficient for the development of the project. Naturally, this assumes that the plan for filling the ecosystem is fulfilled, and the end product is of high quality.
The business model for the project involves attracting users through rewards for their activity on the platform, which could also attract the attention of a certain portion of the audience to the resource. However, it is currently difficult to determine potential numbers of those interested in the monetization of their time on social media; there is no research quoted on this topic.
The team is also considering advertising on their network as one of its main sources of income. In this case, the actively developing and growing digital advertising market (which, according to forecasts, will reach $335.48 billion by 2020), provided that a quality resource is created and the development of the community, could also help the project succeed financially and occupy its niche in the market.
4.2. Competitive analysis
VTOS first and foremost is a service for content hosting and a social network, so it should be compared with similar services - the leaders in this segment are Facebook (2 billion users), Youtube (1 billion users), Twitch.tv (about 600 million users), Twitter (about 1.3 billion users), Reddit (about 270 million users), Instagram (about 600 million users) and Quora (about 190 million users). VTOS, having no unique service for social activities, integrates many functions available in the above networks into its platform and aims to provide a higher quality, faster product using advanced technical solutions. Given the growing volume of hosted content, VTOS is aimed at addressing problems in the sector in the form of stability of speed and quality of service and investment in equipment, by abandoning the traditional data transfer process (server — client). From the point of view of users the project promises, due to the transfer of resource management from corporations to community, to improve the quality of content, make it relevant to the interests of users, and not dependent on profits.
The project is losing to major social media in terms of its audience volume, since it still has to popularize the product in the global market. Plus, at this point in time, there is no way to evaluate the operating resource of VTOS or make a comparative analysis of the interface. Also, there might arise a situation where major social media, given their impressive financial resources, will begin to use CDN/P2P data transmission technology, which could become a significant obstacle to competing in the market.
With the introduction of services for conducting video calls, sending messages and video messaging, the project could partly compete with popular communications applications such as Skype, WhatsApp, and Telegram. The popularity of this service will depend on ease of use of the resource as a whole, the time spent by users on it and the number of contacts registered on the platform.
With regard to orientation of the project towards the blockchain sector, we note that in the current period of popularization of blockchain technologies, VTOS is neither the only social network or a single hosting with a system of rewards, nor a single blockchain project focused on the placement of ads. For example the Steem project, which pays its users, announced its audience size to be more than 334,000 and claims payments to the amount of $22.7 million. The Viewly project provides video delivery using P2P CDN. adChain and AdEx are oriented to the issues associated with placing online ads.
The project team boasts strong professionals with extensive experience; the project currently employs more than 15 of them. The documentation states that staff have rich experience of business management, the management of operational, legal and technological risks and the introduction of products to the market.
The site and white paper provide the following information on team members:
Also, a number of prominent consultants and advisors are detailed on the site and in the whitepaper. Among them are the following:
The project team is faced with a really difficult technical problem, but the knowledge and preparedness of the team could increase the chances of its success.
We conclude that the project team has a high level of knowledge, skills and professional experience in their field, which could certainly contribute to successful implementation of the project. An additional advantage is the fact that the team consists of experienced IT specialists, marketers and analysts. With regard to the project's activity online, we have not identified any negative or damaging information, including regarding any participation in other ICOs, but information about the ICO is almost nonexistent, so the community has not yet evaluated the project.
330 million VTOS tokens are sold in the ICO. There will be 2 tokens on the platform: VTOS and VCT.
VTOS token is needed to launch and rent masternodes. The masternodes will be able to rent out their storage space to other VTOS platform users. The storage space will be paid for in VTOS tokens:
Apart from that, all masternode owners will be rewarded by the platform. 20% of issued VTOS tokens will be reserved for masternode rewards. Thus, in the long-term the profitability (without subtracting expenses) of masternodes will be 36% in VTOS tokens. To launch a masternode token holders need to accumulate 1000 VTOS tokens. Users who created masternodes will not only get the monthly payments in VTOS-tokens, but, according to the creators, they will also have additional benefits when using the platform. Also, the team announced a simplified model of obtaining the status of masternode, without paying for downloading the program and presetttings.
We would like to note that the team did not disclose the sources of replenishment of the VTOS token fun as it is exhausted.
VCT Token is not sold during the ICO. It will be used as a payment tool on the platform as well as a tool for providing rewards to users. VCT tokens can be obtained as a reward for posts, likes, "sharing" content. VCT token can be earned by content creators and contributors. The team assumes that rewards in VCT tokens will enhance the content quality on the platform. Moreover, the platform introduces a level system that will be based on actions made on the platform. For each action made on the platform, users will earn a determinate amount of experience points and VCT.
In addition, VCT tokens will be used in the system of VCT Host Support (Webminer). Users will get reward in VCT tokens for providing their hard drive space.
Also, the service for exchanging VTOS for VCT and cryptocurrencies will be realized on the platform.
As such, the VTOS platform will have two token ecosystems: VTOS and VCT. Both ecosystems are closed and both tokens employ their own mechanisms to increase value. Both VTOS and VCT are used for payments and rewards. VTOS is also used for masternode stake confirmation.
Analysis of factors affecting the future price of the token
In theory, VTOS token economy model will propel the token liquidity growth in the long term and withdraw a part of tokens from the market decreasing the free float. Should the project be successfully implemented and promoted, this token economy model will stimulate VTOS token value increase in the long term.
As per the roadmap, the masternode mechanism will be launched in Q3 2018, right after the crowdsale completion. The alpha version, both for desktop and mobiles (iOS and Android), will be also available around the same time. Starting from Q4 2018, the platform will be offering more functions, however, the beta version will only be launched in Q1 2019.
It is quite likely that the alpha version of the product will not be in high demand among regular users, which will negatively affect both the VTOS token liquidity and demand for the storage space.
The team have provided the alpha version of the product. The beta version is to be launched approximately in six months after the ICO completion. This fact reduces the project risks, however, it does not eliminate the risk that the demand for the final product will not be high enough to ensure the required VTOS token liquidity and demand.
We also wish to mention that VTOS crowdsale does not involve refunds to investors in case the soft cap is not reached.
Finally, let us mention a competitive risk. From the point of view of an average user, the competitive advantages of VTOS will not always be obvious, but the quality of content will be crucial.