1. Home
  2. Analytics
  3. Investment Rating

XYO Network Rating Review


Investment Rating

Expiry date : Expired 20 Aug 2018


We assign the XYO Network project a "Positive" rating.

XYO Network is an ambitious and largely innovative project. Its innovation can be attributed to blockchain 3.0, which expands the possibilities of blockchain with smart contracts. In the case of XYO, it is about expanding the capabilities of a decentralized network by storing information about geolocation and the new consensus mechanism, Proof of Origin.

At this stage, the project already has a well-developed hardware network of Bluetooth and GPS devices, which is critical to the operation of the network. In general, the XYO Network consists of four main elements: SENTINELS – geolocation data collectors, BRIDGES – data translators, ARCHIVISTS – data storers, and DIVINERS – data analyzers. Together all these elements, with the abilities of smart contracts, create the XYO Network.

The project is conducted by an experienced and professional team. The work on this project began in 2012. Currently, the team has 20 specialists including 3 co-founders. The quality of project management can be judged by its well-designed and well-structured documentation. The documentation is diverse, covering not only the technical features of the network but also describing things such as use cases and business cases.

Despite all these strong points, the project is still at a rather early stage. There are still some questions regarding the parameters of the ICO. For example, total number of tokens that will be issued is still not known, although the hard cap of the project is known, it will be $48 million. There are questions regarding the descriptions of the network elements, the expanded documentation will probably need to disclose the complex aspects of the work of the DIVINERS. We hope that in the near future all questions will be answered.

It should be noted that the project has strong competitive positions. There are no direct competitors, and hardly anyone wants to create their own hardware network. The XYO project works in connection with the development of the Internet of Things, which makes it a promising project.

If we look seriously at the project, frankly, it has no weak points and the key to success lies in the global trends of the development and popularity of the blockchain itself, and the drivers for the development of IoT.

General Information about the Project and ICO

XY Oracle Network (XYO Network) is “THE FIRST CRYPTO-LOCATION NETWORK BUILT FOR THE WORLD OF TOMORROW”. This is how the XYO Network writes about its own brainchild. They plan to create a decentralized network for collecting, storing and analyzing location information in order to transfer it further to the outside. The network consists of nodes, data mining devices, such as geolocation devices capable of recording location information, and other devices that can store, process and analyze information.

The XYO protocol itself assumes full openness of information but it is designed in such way that forging or providing false data is practically impossible. This mechanism is called Proof of Origin, and the network forms the Proof of Origin Chain in the process of working. Together with the Proof of Work application, we get an analogue of the current blockchain network applicable to geolocation data and protected from hackers’ attacks as much as possible.

The range of application of the XYO Network is huge, the team has even released 7 separate documents, use cases, which detail the possible prospects of the network. They cover most areas of the economy.

In addition to mining, a large network of devices for fixing and transferring geolocation information is needed for the XYO Network to function: mobile phones, Bluetooth trackers, IoT devices with built-in  geolocation tracking, satellite tracking technology, QRcode scanners, RFID scanning and many others. In this area, there is a strong background. XY The Findables Company stands behind the project. Within this company a network of more than 1 million Bluetooth and GPS devices are built. All these devices are virtually Sentinels of the XYO Network.



Start: 20 Mar 2018

End: 20 May 2018

Soft cap: N/A

Hard cap: $48,000,000

Price: 1 XYO = 0.00001 ETH


Token: XYO Network Utility Token (XYO), standard ERC-20

Accepted currency: ETH

Total emission: Finite and capped at the amount reached after the Token Main Sale

On sale: N/A

The ICO of the project is atypical based on its characteristics. In particular, the total volume of tokens is not announced, only the hard cap. There is also no emission structure. However, along with each token generated on the ICO, one token is created for XY The Findables Company. 3.2 million tokens are allocated to the project team.

Thus, the total volume of tokens will be - (X * 2) +3.2 million, where X is the volume of the tokens sold on the ICO.

The bonus system is not disclosed, but it is known that the discount will fall with each token sold, starting from 1 ETH for 33,333 XYO to 1 ETH for 100,000 XYO.

Unsold and unallocated tokens will be burned after the Token Sale. No further XYO tokens will be generated after the Main Sale ends.

Description of the Services and Scope of the Project

The XYO Network team made the description of the developed ecosystem and services extremely carefully. This is one of the few projects that has both business documentation and separate technical documentation that reveals the software entities of the architecture and the Proof of Location protocol being created.

We will not focus on the specifics of the protocol, the consensus mechanism and the confirmation in the XYO Network in the review. Basically, all the solutions are of a verified standard in the construction of decentralized networks, and the mechanisms for forming the blockchain, remuneration and verification are similar to those already existing. It is worth noting that the value of the XYO network is not just in its innovative solutions for building a network, but in the main sense and the concept of building it, taking into account the unusual goal of fixing and providing geolocation data. XYO's merit is in building a network based on an innovative idea that would fit into the concepts of IoT and IoE, and would be partially their basis.

XYO Network can be characterized as an independent decentralized network based on the blockchain, which is formed by requesting the network from the outside and searching the nodes for the most accurate response to the request. The request indicates geolocation data for various objects. This way, the user will be able to find out, for example, where an item, like a parcel, is at or if it’s near the current location. The user pays a commission forming a request in XYO, a gas fee, which is distributed to the network participants as a reward for the work.

The general scheme of network operation can be seen from the materials of the XYO presentation:

The operation of the network occurs entirely automatically and does not require the intervention of centralized systems or the human factor. The sources of geolocation data are various devices that support GPS, Bluetooth and other methods of data transmission.

If we look inside the XYO Network, it is worth highlighting the basis for its operation, the nodes. The nodes of XYO can have a different nature, functions and tasks. The storage and analysis takes place due to the interaction, data collection and transmission. It is worth considering each type of component separately. The XYO Network includes the following components:

SENTINELS –  are location witnesses. The main task of these components is to determine the geolocation data, and its accuracy and certainty. In the future, data will be received by the Bridges, who will transfer them across the network. The observed data form the temporal ledgers; they are transmitted to the Bridges in this form. In order to prevent the transmission of false or unreliable data, the SENTINELS will function within the framework of the Proof of Origin, a mechanism that facilitates the cryptographic evidence of data.

In fact, SENTINELS are devices for collecting primary information - mobile phones, Bluetooth trackers, IoT devices with built-in geolocation tracking, satellite tracking technology, QRcode scanners, RFID scanning and many others. The main task of the device is the discovery of geolocation information; accordingly, it can be any device with such functions.

BRIDGES – are location data transcribers. These components actually have a single function - the transmission of ordered data (ledgers). At the same time, their function is controlled by the security and necessity of data transmission to the network. The mechanisms of the reputation and payment network in the case of BRIDGES are combined in such way, that if the data of a particular Bridge is used to respond to a request from outside, it is rewarded with an XYO token. In connection with this, the Bridge must transmit data that is consistent with the estimates of other components. The bridge can be, for example, a mobile phone (as well as a SENTINEL) or another device with Internet access and data format support.

ARCHIVISTS –  are components of storage in the XYO Network. The data that comes from BRIDGES in the form of temporal ledgers are stored in ARCHIVISTS in a decentralized form. The storage of data does not imply their ordering, i.e. ARCHIVISTS issue "raw" data, for which they receive a reward in tokens. At the same time, the data of one ARCHIVIST can be insufficient for a request, so it will have to make a request to others. Data transferred from one ARCHIVIST to another is supported by an additional Proof of Origin. This also helps distribute the payment for the request between the involved ARCHIVISTS. Any devices with the ability to store information can be ARCHIVISTS but computers are best suited for this purpose.

DIVINERS – are the data analysis components of the XYO Network. This is the most difficult part of the XYO Network, since the task of these nodes is to get data of the highest quality, having all the information of the XYO Network. After receiving information from ARCHIVISTS and analyzing it, DIVINERs make a response to the request, for which they receive a reward. The reward is given to that DIVINER, who responded to the request in the best possible way in the shortest period of time, thereby obtaining the possibility of forming a block in the main XYO blockchain via Proof of Work. Similar to existing blockchains, requests to the network take precedence depending on the size of the reward and complexity, i.e. the priority on the request is higher when the reward is greater, and the complexity is less. In the process of searching for information, the data that has the best Proof of Origin chain is selected. On the part of the initial request, the functioning of the Proof of Origin along the entire data path contributes to obtaining the most qualitative response from the network. DIVINERS can be computers or "farms" like miners are in other blockchains. The Proof of Work mechanism and the software are generally similar.

The scope of the protocol being created will be more than extensive. The team provides 7 separate documents describing the platform's capabilities: eCommerce, Medical Care and Hospitals, Rental Car Agencies, Commercial Airline Luggage Logistics, Insurance, National Security (TSA), Drone Package Delivery.

Market Review

Technologies do not stand still and blockchain itself is not an exception. Now "blockchain" is a buzzword which is able to attract the attention of a large number of people and most importantly, allows one to attract substantial funding. For most people, the development of decentralized networks is not a desired process. Until 2015, blockchain was for geeks, enthusiasts and narrow specialists. This was the era of the blockchain 1.0.

In 2015, the Ethereum network was launched with its smart contracts, which allowed the creation of a world of crypto assets, which is currently well known. It was the smart contracts that allowed the use of blockchain to be significantly expanded, and made it a genuine applied technology. This was the era of the blockchain 2.0.

Currently, there is a third wave of development of technologies, or the development of blockchain beyond Ethereum. It is impossible to formulate an exact definition, but it is important to note that it is worth considering approaches that really expand the capabilities of the technologies used. New architectures of decentralized networks are often considered under these approaches. For example, Direct Acyclic Graph or DAG is often cited. To be exact, DAG [https://www.forbes.com] is not a blockchain but a fundamentally different architecture for building trust networks, based on the absence of directed loops. The advantages that DAG gives are usually defined as an increase in transaction speed, reliability, and ease of mining [https://coinpickings.com]. IoT Chain, IOTA and Byteball can be attributed to projects without blockchain.

Regarding XYO Network, we can also talk about the blockchain of the third generation. XYO adds a new dimension to the blockchain - the coordinate in space. If we consider blockchain as an oracle, we can ask him “What?” or “When?”. The XYO oracle allows us to also ask him “Where?”.

It may seem interesting that the application of the XYO Network is quite wide. The website of the project presents 7 use cases. This coverage leads XYO Network to a market of almost unlimited potential. The project website has the following eloquent diagram, concerning the target market:

There are millions of Bluetooth and GPS devices in the world that can work in a single network and transform the entire structure of the modern world. This is one more step into the world of Internet of Things and we must admit that the concept of the XYO Network is excellent for it.

There is no need to be a prophet to say that IoT will be one of the most powerful drivers of technology development in the next decade. The widespread development of wireless broadband networks, the development of cloud technologies and the reduction in price of mobile devices make the boldest ideas of digital globalization and decentralization a reality.

Researchers predict the pace of IoT development, market volumes and the number of connected devices quite often. Forbes magazine published an article "Roundup Of Internet Of Things Forecasts And Market Estimates, 2016", in which the author summarized the main results of research at that time [https://www.forbes.com] many of which have not lost relevance currently. Here are just a few pictures from the article about the economic impact of the IoT.

To summarize, the XYO Network project has a very high potential and it can become hugely popular. Currently, we do not want to look for competitive vulnerabilities, as projects that develop the IoT, in any way, are useful and at least worthy of our close attention.

Team and Stakeholders

XYO Network has an excellent team. The background of the developers is unquestionable, the founders really managed to bring together some interesting and extraordinary people. Currently, the project has three co-founders and 17 team members. Due to the format of the review, we will focus on the founders only, the rest of the project participants will only be listed.

Arie Trouw, Founder & Architect

Ten years before Elon Musk wrote his first line of computer code, another young engineer in South Africa was busy writing software on his TRS-80 Model I. In 1978, at the age of 10, Arie Trouw started developing software on the TRS-80 Model I, moving on to Atari, Apple, and PC. He then ran a series of bulletin boards centering on game-theory modification.

Arie is an accomplished serial entrepreneur with a rich history of technological breakthroughs and business successes involving multiple 8-figure exit events. He is a strong believer in decentralization and the creation of the integrated owner/user model. Arie founded XY in 2012 (incorporated as Ength Degree, LLC before it was converted to a C Corporation in 2016).

He currently serves as Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chairman of the Board of Directors. Prior to starting XY - The Findables Company, Arie was CEO and Chairman of Pike Holdings. (later sterkly, LLC). Before Pike, Arie served as Chief Technology Officer of Tight Line Technologies LLC. He received his Bachelor of Science in Computer Science from the New York Institute of Technology. Fun Fact: He is a member of one of the first Afrikaans speaking families to emigrate to the US from South Africa in 1976.

More detail: LinkedIn

Scott Scheper, Co-founder & Head of Marketing

Scott's career has revolved around technology startups and digital advertising since 2008. Scott's first "real boss" was Arie Trouw, who hired Scott in 2009 during an economic recession, when very few companies were hiring, and even fewer were starting companies. What began as a Facebook app startup with four guys and a ping pong table, grew to over 200 employees and 9-figures in revenue in less than two years.

In 2013 Scott took a break from corporate life to pursue the dream of working remotely on a laptop while sipping tropical drinks on the beaches of St. Thomas, Virgin Islands (U.S.). During this period, Scott launched Greenlamp, a programmatic advertising agency specializing in direct-response media buying. The agency was fully automated; built entirely using algorithms to manage the campaigns. The team was built with project-basis software engineers, and had only one full-time employee: that being Scott. The advertising campaigns were managed by an automated system, nicknamed "Stewie" (Family Guy). 24-hours a day, Stewie managed everything, making automated tweaks to the advertising campaigns. He even emailed Scott to chat about the changes made (Stewie's emails included signature Stewie lines). In its first year of operation, Greenlamp generated over $12M in revenue.

When not working, Scott can be found reading books by his idols, Gary C. Halbert and Charlie Munger, or sometimes even outside with friends and family in San Diego, California.

More detail: LinkedIn

Markus Levin, Co-founder & Head of Operations

Markus mined his first Bitcoin in 2013 and has been captivated by blockchain technologies ever since. Markus has over 15 years’ experience in building, managing and growing companies around the globe. Markus is originally from Germany (with English as his second language), and specializes in getting the most out of companies by implementing data-driven systems and utilizing the key talents of each employee to get the best out of his team.

After dropping out of his Ph.D. studies at Bocconi University, Markus began working with companies in hyper-growth industries around the globe. Markus has led cutting-edge technology ventures such as Novacore, "sterkly", Hive Media and Koiyo.

More detail: LinkedIn

All of the detailed descriptions of the team members are taken from the website, but we will not present them all here. However, there are some "Fun Facts" in some of the descriptions that characterizes the person well, which we have included.


William Long


Head of Hardware

Christine Sako


Head of Analytics

Johnny Kolasinski


Head of Media

Fun fact: New episodes of Johnny’s Game of Thrones podcast are frequently among the top 50 most popular entertainment podcasts worldwide.

Jordan Trouw


Customer Experience Manager

Fun Fact: Jordan is one of the top gamers out there, with her favorites being World of Warcraft, Skyrim, and Zelda.

Lee Kohse


Sr. Design Engineer

Lee is also an accomplished artist in the film industry, working on such projects as Star Wars, Doctor Who, Voltron, The Avengers, X-Files, and many more. Fun fact: Lee has one of the leading art streaming channels on Twitch.

Louie Tejeda


Warehouse Logistics Supervisor

Fun fact: In his free time, Louie runs a local anime group.

Maryann Cummings


Client Support Manager

Maria Cornejo


Retail Management Supervisor

Vicky Knapp


Sr. Accounting Manager

Fun fact: She has three sons, all of whom have computer science degrees from UCSD.

Patrick Turpen


Hardware QA Supervisor

Fun fact: He has a collection of different types of scorpions from around the world. He also has 6 cats!

Charles Bulger


Head of Web Development

Charles is also a jazz drummer and avid rock climber.

Keri Kukral


Head of Public Relations



Jelena Boskovic

Head of HR & Administration

Zefram "3 Bullet" Liu

Blockchain Engineer

Owen Shen

Blockchain Engineer

Jared "Tobyn" Jacobs

Jr. Blockchain Engineer

Noah Levin

Business Development

The list of advisors of the project is also quite extensive. In addition to well-known personalities like Tom Kysar from the Augur project, the list includes the producer and rapper Drumma Boy.


Tom Kysar


XYO Token Market Economy


Raul Jordan


XYOMainChain Scalability

Ismail Malik


Blockchain R&D

David Kim


Blockchain Consulting

Paul Hynek


Smart Cities

Chris "Drumma Boy" Gholson


Art + Music + Technology + Culture

Jack Cable


Blockchain Hacking

Zak Folkman


Digital Programmatic Advertising

The Nexus Group

Azam Shaghaghi


Blockchain Consulting

Tristen Blake


Artificial Intelligence

Nate Broughton


Marketing Operations

Andrew Rangel


IoT Security


Token Analysis

The token of the XYO Network is an ERC20 utility token. The tokens are designed to be used in the developed XYO Network as a means of reward for the nodes.

In fact, XYO tokens can be considered as gas, through which users in the real world can interact with the XYO Network. In particular, the token holder will be able to form a request to the network, for example "Where is my parcel with XYO Address 0x123456789 ...?". The request has its own cost; the user can set the degree of data accuracy and priority, i.e. the gas price. The cost is also determined depending on the amount of data. After creation and payment, the request goes into the queue and it is executed depending on the priority and network status.

During the operation of the XYO Network, all four components of the network receive rewards in the event of a response to a request: The Diviner (who searched for the answer), the Archiver (who stored the data), the Bridge (who transmitted the data) and the Sentinel (who recorded the location data). In this case, several components of the network can be combined within the same device, allowing tokens to be obtained in a larger amount. At the same time, the Proof of Origin mechanism provides higher priority for independent components, so in a large network environment, the combination of components will be rare.

The reward will also be higher for those Sentinels, which are more stationary objects. Archivists monitor and evaluate the position of Sentinels and assign a higher priority to stationary nodes. As a result, stationary Sentinels often receive compensation in XYO tokens.

The XYO Network provides another mechanism for regulating the economy of the XYO token. Not only are the network nodes (the miners) subject to regulation, but so are the token holders too. The user is rewarded for the transaction (data request) in case of low liquidity of the network and vice versa, in case of high liquidity. The real parameters of such rewards are not disclosed, it is indicated only that a reward can be achieved by different mechanisms, including a symbolic reward for the transaction and the lottery.

The parameters of the token and the economy of the XYO Network listed here are not exhaustive. The team devoted a separate document to this aspect – the Green Paper, where the problems and extensive analysis of the selected model are described in detail.

Analysis of Factors Affecting the Future Value of the Token

The XYO token carries a utility function, being a gas currency within the XYO Network protocol. The value of the token is affected by external factors: The demand for network services, the demand for Proof of Location and blockchain technology in general, the popularity of XYO in comparison with other solutions and internal fundamental factors, such as the economic state of the network, the balance of supply and demand from the miners and authors of information requests.

As for internal factors, the team can manage risks. Economic methods for balancing supply and demand (they have been considered above) have been introduced for this purpose. Such methods will help to contain volatility in the market in the long term. As a result, the risk level for token holders will decrease, and this is certainly a positive. In general, using the ERC20 token for a protocol like XYO makes it vulnerable, at least within the risks of the Ethereum network, but the question of gas currency is now secondary; if necessary the ERC20 token can be replaced and converted by selecting another blockchain.

The logical assumption of anyone who will get acquainted with any part of the XYO documentation will be the fact that the XYO token is a long-term asset. Here one should not rely on the hype or the increased interest around the project, as long-term revenue is still many times higher. In the hope of understanding the factors of the long-term attractiveness of the XYO token, it is worth considering the prospects of the project as a business and niche blockchain of the new generation - the Proof of Locations protocol.

The relevance of the protocol is closely connected with the concept of IoT and the introduction of software logic in all spheres of life. While maintaining the current pace of intensive development, the XYO Network will receive a huge demand from many sectors of the economy - from medicine to households, since geolocation confirmed data on any object in the offline world will remove current limitations and will contribute to development of stand-alone digital systems.

Therefore, the key long-term factor of XYO is the pace and direction of IoT development, the introduction and integration of online technologies with the offline world. Currently, the trend is more than positive, so are the prospects of the project and hence the prospects of the XYO token are positive too.

Although the long-term potential of the XYO token is fundamental, it is also possible to find positives in both the short and medium-term. According to the published roadmap, the launch of XYO Network will begin with the framework of testnet in the second quarter of 2018 and it is planned to announce the finished product in the second half of the year. Given the availability of a Sentinels network and close horizon of the platform launch, the token price will grow by the end of 2018.

The main negative factor in the short and medium-term is the complete absence of a policy of freezing the tokens of the team, the XY The Findables Company and the tokens obtained on the Pre-Sale. The tokens created for the XY The Findables Company, as well as 3.2 million tokens for the team gives them  significant volume, which can strongly affect the market balance. In our opinion, the lack of such a policy is not justified by anything, it adds risks virtually out of nowhere.

Investment Risk Analysis

The XYO Network project is bright and ambitious. We cannot talk about hype or some special interest in the project, but today is not 2017, when almost any projects could succeed. The current investor rethinks their approach to asset selection and acts cautiously.

The main risks of the project are related to its complexity. The complexity of the project can be seen in many aspects, primarily in the network architecture and the features of the Proof of Location agreement. There are still questions to the work of DIVINERS as the most meaningful nodes, but we hope that the appearance of more detailed documentation gives more transparency. We emphasize that the team's experience should neutralize such risks.

The second important risk is the hardware component of the project, namely the development of the SENTINELS network. Unfortunately, without a full-fledged network of greater coverage, the meaning of XYO is lost. At the same time it is difficult to imagine what could prevent the development of IoT with the growth of connected devices. Mobile phones are still the main platform for accessing the network and their number is steadily growing.

As already noted in the market review, we see no serious competitive risks for the project. The XYO project is specific. Its development was facilitated by the availability of its network of geolocation devices. Probably, it will be difficult to replicate such a network.

To summarize, we can say frankly that there are no weak sides to the XYO Network project. Only global processes that lie in the popularity of blockchain and IoT drivers can prevent the development of the network. As for the rest, it is necessary to count on the professionalism of the XYO team and monitor the implementation of the roadmap.

The information contained in the document is for informational purposes only. ICORating received monetary compensation in the amount of $18000 from the entity rated in this report for completing the ratings report. However, the entity rated in this report did not have the opportunity to approve this rating report before the report was published, nor did the rated entity have the opportunity to edit or remove this report once it was published. The views expressed in this document are solely those of the ICORating Team, based on data obtained 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.