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MediBloc Post ICO Rating Review

Stable+

Post-ICO Rating

Expiry date: Expired 03 Oct 2018

Based on the analysis performed we assign a "Stable+" rating for the MediBloc project, outlook - favorable. We note that ICORating performed a Basic Review of MediBloc but has not rated the MediBloc project before its ICO.

We note the following general strengths of the MediBloc project:

  • The team has a good track record.
  • Complex yet necessary idea.
  • Good competitive position.
  • Transparency of the team in terms of financial statements and activities.
  • Successes in Business Development and partnerships (in South Korea so far).
  • Modest financial performance of the MED token.

 

After the ICO, the project also displayed the following highlights:

  • Strengthening of the team (12 new team members).
  • Release of SDK v0.1 in accordance with the roadmap.
  • Project team made a decision to develop own blockchain network.
  • Evidence of team’s work on GitHub.
  • Establishment of 5 significant partnerships.

 

At this stage the key risks associated with the project include:

Absence of a publicly available MVP/alpha/beta/testnet of the blockchain - Although it was not due to be released by the date of the analysis, it is still worth noting that the team does not yet have a publicly available MVP/beta or testnet of their blockchain, which increases the risk for potential investors. We note that the Software Development Kit (SDK) has been released as planned, so the team appears to be overall on track with the project. We also note that the team has provided us with demonstration video of a product developed for hospitals, so the risk is partially offset.

Development risks - The project’s roadmap and the actual performance of the team during the first five months of 2018 show that the planned development is justified and achievable. However, developing one’s own blockchain requires a significant amount effort from the team both in terms of work to be done and expertise. Once alpha/beta of the testnet and the mainnet are released, the degree of this risk may go down.

Business/commercial risks – The MediBloc project currently seems to be primarily targeting the South Korean market. While this is totally acceptable at this point in time, we believe that the project should also aim for the global market, as well. Though, it is worth noting that the healthcare system is different in almost every country, which may cause problems when expanding overseas.

Team competence - Most of the LinkedIn accounts of the team members do not have evidence of expertise (endorsements or recommendations). Though, we must mention that LinkedIn is not a commonly used platform in South Korea, so this risk is partially explained and offset by this fact. Overall, the team has has been strengthened and seems to have enough expertise to deliver the project even taking into account the decision to develop own blockchain.

Based on the analysis performed and risks identified we assign a "Stable+" rating to the MediBloc project, outlook – favorable.

The MediBloc team proposes a healthcare infrastructure solution with the support of dApps and smart contracts.

The MediBloc ICO had a Hard cap of USD 25,000,000 which later reached USD 30,000,000 due to a spike in QTUM’s price. 71% of the Hard cap (USD 21.3 million) was raised during the Private and Public Sales. All unsold tokens were burnt in January 2018. No Venture Capital funds participated in the MediBloc crowdsale.

The team withdrew USD 400,000 in fiat currency for the purposes of project expenses. The remaining funds were equally distributed between fiat and cryptocurrencies in order to hedge against possible volatility. The crypto-assets are being kept in a multi-signature wallet and a cold wallet.

The original roadmap for the project was as follows:

Below is the platform roadmap:

The team has also a separate roadmap for dApps:

The actual progress of MediBloc can be tracked on a blog that publishes weekly updates. The key results since the ICO date are as follows:

  • Partnership agreements with Kyung Hee University Dental Hospital, Hanyang University Medical Center and Deloitte. Partnerships with other medical institutions are shown below.

  • MediBloc was named one of the top 10 tech startups in South Korea for 2018.
  • 2 billion unsold MED tokens have been burnt.
  • MediBloc has participated in several blockchain and medical conferences and meetups.
  • MEDX (ERC-20) 1:1 airdrop was announced (May 29th).
  • SDK v0.1 released.

Overall, the team is on track with the project’s development. We asked the team about their upcoming development plans and the team provided us with the following information:

● The launch of the mainnet is expected by the end of 2018.

● dApps are expected to be released by the end of 2018 /early 2019.

● The team has informed us that they have faced some difficulties in dealing with health information as a dApp of Qtum, which is why the team decided to develop their own blockchain. Testnet launch is scheduled for September 2018 and mainnet is scheduled for early 2019.

 

The projects contract code is publicly available at https://github.com/medibloc/. For the first 5 months of 2018, contributions to the master on GitHub were as follows:

We note that the activity in May represents the SDK release in late May 2018.

 

Business and finance

The MED token supply was limited to 10,000,000,000 MED tokens, out of which 50% (5,000,000,000 MED) were allocated to the public sale.

Before the token distribution event, the MediBloc team provided the following information regarding the distribution of the MED token:

Vesting period of 3 years is set for the team. Tokens for advisors are vested for 6 months.Unsold MED tokens amounting to MED 2,033,615,900 were burnt on January 20th, 2018.

The team also provided us with the following breakdown of the forecast of the use of proceeds:

● Marketing – 17%

● Legal – 8%

● Consulting – 5%

● Operations – 10%

● 3rd party incubating – 20%

● Product development – 35%

● Reserve – 5%

 

In our opinion, this breakdown represents a healthy allocation of funds based on the project’s resources and development stage.

On May 29th the team has announced a 1:1 airdrop of MEDX (ERC-20) tokens for MED (QTUM token) holders. Both MED and MEDX will be exchanged 1:0.5 to the mainnet coin, once the mainnet is released. The snapshot of the airdrop happened on June 1st, 2018 followed by the price of MED tokens dropping twice.

The team is working closely with EY in order to publish the annual financial statements of the project for 2018 which we consider a very important and promising fact. We also note that the team maintains a budgeting process which is also an indicator of good planning. We have received the project’s budget and examined it. We believe that the budget represents a healthy estimate based on which the project is going to breakeven by 2021.

According to Global Data, the South Korean healthcare IT market is expected to grow from USD 355 million, as of 2015, to USD 925 million by 2022. The MediBloc team seems to be currently focused on the South Korean market which makes sense given that they want to deliver the product to medical facilities, and it is easier to launch in one country and then expand overseas. The healthcare market is usually highly regulated, however, the healthcare IT systems market is not that regulated.

The global healthcare market is expected to reach USD 8.7 trillion by 2020 according to the World Bank Group and the Institute for Health Metrics and Evaluation. According to Deloitte, average percentage of GDP spent on healthcare worldwide is 10.5%.

In general, the market niche of infrastructure blockchain platforms bears little to no regulation risks. We note that the team has two legal entities:

  • MediBloc Limited registered in Gibraltar (token issuer).
  • MediBloc Inc registered in South Korea (operations).

Gibraltar is considered one of the most ICO-friendly countries in the world and South Korea is one of the leading technological countries. The team provided us with MediBloc Inc’s registration documents in South Korea.

The capitalization of the blockchain market as of June 7th, 2018 decreased almost twofold since January 01st, 2018. This was mainly driven by the significant drop in Bitcoin price.

We note that MediBloc’s capitalization has demonstrated similar dynamics. It adjusted for higher volatility compared to the market and decreased 3.5 times from Year-to-date (YTD):

The drop in capitalization during the period from May 31st to June 7th, 2018 was more likely caused by the announcement of the 1:1 airdrop of MEDX (ERC-20) tokens.

The MediBloc project has competitors in the market which are all slightly different in terms of their current status, features, performance and development stage. A comparative table of the competition is presented below:

 

MediBloc

Medicalchain

Shivom

Ticker

MED/MEDX

MTN

OMX

ICO status

Ended

Ended

Ended

Funds raised during ICO / Hard cap (USD million)

21.2 / 30

24

35 / 35

Percentage of tokens for sale

50%

35%

33%

ICO valuation (USD million)

60

68.6

106

Current capitalization (USD million)

 31.1

12.9

6.2

Capitalization change to date (times)

⬆️1.47

⬇️1.86

⬇️5.65

 

 

Product/concept

Decentralized patient healthcare system on project’s own blockchain

Decentralized health record system

Decentralized DNA/genomic datahub

Special features

dApps

Telemedicine, dApps

dApps, AI

Current development phase

SDK released, blockchain development

First dApp announced, closed beta test

No MVP/beta

Expected release of final version

December 2018

March 2019

Q4 2018 – Q1 2019

 

It is worth noting that the Shivom project targets a different market of genome/DNA research and data, and was included in the analysis for illustrative purposes.

Technical overview

The major problem blockchain projects face is derived from the decision whether to develop one’s own blockchain or utilize the existing solutions. Both options have their pros and cons.

Initially all three projects planned to develop their platforms on the basis of existing solutions:

  • MediBloc – Quantum blockchain.
  • Medicalchain – Ethereum for dApps and Hyperledger for storage and access to health records.
  • Shivom – Hyperledger and BigchainDB framework (Ocean Protocol) for data storage and access, IOTA Tangle for streaming and collecting medical data.

Later on, MediBloc found out a problem with the health dApp developed on the Qtum blockchain and decided to develop their own blockchain. We see the following pros of such decision:

  • Ability to develop the platform as intended.
  • Features are only limited by the team’s capabilities.
  • The team decided to stick to their roadmap and did not move the milestones even though the amount of work to be done increased.
  • Such a decision demonstrated the seriousness of their intentions.

However, we also see potential drawbacks:

  • The development of one’s own blockchain increases the level of development risk.
  • Significant effort is required from the team in order to deliver the project without any postponements.

Overall, we believe that it is more likely than not that the team made a good choice.

According to Coinmarketcap, the capitalization of the project as of June 2018 was estimated at USD 38.8 million. Also, according to information from Coinmarketcap, the following markets were available for MED tokens as of June 7th, 2018:

 

The historical performance of MED and its main competitors is shown below.

The MED token reached its all-time-high (ATH) of approximately USD 0.32 (BTC 0.000023) per token in January 2018, during a bullish market period for altcoins. After that, the token price went down as the market downtrend took place and reached USD 0.03 (a decrease of 10 times the ATH) or BTC 0.000004 (a decrease of 6 times the ATH) by the end of May. In June, another price drop happened which was caused by the announcement of the MEDX airdrop. We note that due to 1:1 airdrop of equal amount of MEDX tokens actual aggregate price of MED and MEDX tokens is circa 12% higher than the ICO price.

MTN was listed on exchanges on February 3rd, 2018 and started trading at the price of BTC 0.000034 / USD 0.32. During the following months up until July 3rd, 2018, the BTC price decreased by 68% to BTC 0.000011 and the USD price went down by 78% to USD 0.07. The only sustainable growth of the MTN price happened several weeks before Consensus 2018, when the market was relatively bullish for altcoins. MTN is currently traded 56% below its ICO price of USD 0.25

Shivom (OMX) has been listed on exchanges in the beginning of June, 2018 and started trading at BTC 0.000006 and USD 0.049. By July 3rd, 2018, OMX price decreased by 53% in terms of BTC price and by 60% in terms of USD price. OMX is currently traded 82% below its ICO price of USD 0.11.

We consider that MediBloc has the following advantages in terms of investment attractiveness when compared to its main competitors:

● Better overall token performance on the secondary market.

● Its platform release is expected sooner than its competitors’.

● The team’s overall transparency and intention to publish financial statements means that there may be opportunities for future growth.

We note that after the ICO several new team members joined the team:

 

Name

Position

Total experience

Relevant experience

Relevant education

Professional

achievements

LinkedIn

Connections

Endorsements / Recommendations

Team

Taejin Yoon

Business Development Manager

5+ years

3+ years

Yes

-

Yes

500+

Yes

Kwangho Lee

Developer

5+ years

<1 year

No (mechanical engineering)

3 patents and 9 awards (not related to blockchain)

Yes

158

No

Seunghwan Kim

Developer

1+ year

1+ year

Yes

PhD

Yes

27

No

Jaeyoung Jung

Developer

3+ years

3+ years

Yes

-

Yes

17

No

Heekyu Kim

Developer

9+ years

9+ years

Yes

-

Yes

29

No

Jemin Jeon

Designer

No data

No data

Yes

-

No

-

-

Sungjae Jung

Researcher

5+ years

4+ years

Yes

-

Yes

78

No

Minjung Kim

Researcher

No data

No data

Yes

-

No

-

-

Hyewon Jung

Operations Manager

No data

No data

No data

No data

No

-

-

Hyunmi Haeny Han

Japan Communications manager

<1 year

<1 year

Yes

Exchange student in Japan

Yes

1

No

Dawn Lee

Content / brand manager

4+ years

2+ years

Yes

7 publications

Yes

226

Yes

4 new developers strengthen the team and address the team’s intention to develop their own blockchain.

We note the following initial team members

Wookyun Kho, co-founder of MediBloc, has masters in P2P network (blockchain) from Columbia University.  He was the lead developer of Samsung Galaxy S phone software.  Eunsol Lee, co-founder of MediBloc, has won many programming contests since childhood. He was a core member of big data center at Asan Medical Center, Korea’s largest hospital. Minkyoo Cha was the lead developer of database network at Naver, a portal site with more than 30 million users. Heekyu Kim majored in Cryptography at KAIST, Korea’s best engineering school. He has experience at Samsung and built many popular products as CTO at multiple startups. We note that the team seems to be competent and capable of delivering the project under consideration.

Based on our analysis we identified the following risks for the MediBloc project:

Risk

Description

Level

Absence of publicly available MVP/alpha/ beta/testnet

Although it was not meant to be released by the date of analysis, we believe it is still worth noting that the team does not yet have a publicly available MVP/beta or testnet of their blockchain, which increases the risk for potential investors. We note that the SDK has been released as intended, so the team seems to be overall on track with the project. We also note that the team has provided us with demonstration video of a product developed for hospitals.

Medium

Development risks

 

The project’s roadmap and the actual performance of the team during the first five months of 2018 show that the planned development is justified and achievable. However, developing one’s own blockchain requires a significant amount of effort from the team both in terms of work to be done and expertise. Once the MVP/alpha/beta of the testnet is publicly released this risk’s level may go down.

Medium

Business / commercial risks

The MediBloc project currently seems to be primarily targeting the South Korean market. While this is totally acceptable at this point in time, we believe that the project should also aim for the global market, as well. However, the healthcare system is different in each country which may cause problems when expanding overseas.

Medium

Team competence

Most of the LinkedIn accounts of the team members do not have evidence of expertise (endorsements or recommendations). Though, we must mention that LinkedIn is not a commonly used platform in South Korea, so this risk is partially explained and offset by this fact. Overall, the team has has been strengthened and seems to have enough expertise to deliver the project even taking into account the decision to develop own blockchain.

Low

Competitive landscape

 

The project faces some competition, but MediBloc has several competitive advantages in terms of financial performance and current progress. We also note that their competitors are going to release their products later than MediBloc.

Low



The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication.

Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud.

We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.