The GoNetwork ICO arrives as we wearily acknowledge that the crypto world today is full of fly-by-night ICOs that promise to disrupt multibillion dollar industries. It’s of no surprise that we have become a bit ICO-blinded in recent days. However it’s not everyday that we come across an ICO “From the Winning Team at ETHWaterloo, World’s Largest Ethereum Hackathon.”
ETHWaterloo was a prominent 36-hour hackathon that selected 300 developers from around the world to work alongside Ethereum inventors Vitalik Buterin, Joseph Lubin, and many other big names from the blockchain world. And the winners of this hackathon were in fact the team behind the subject of this review, GoNetwork.
Ethereum is without doubt one of the most disruptive technologies the world has ever seen. But the fact is, in its current form, its use cases are actually quite restrictive. Ethereum transactions are, by nature, processed on the blockchain, and transactions need to be verified and mined before they are confirmed.
This makes Ethereum very difficult to scale. For comparison, EthNews has reported that Ethereum is capable of processing 20 transactions per second while VISA has a peak capacity of 56,000 transactions per second. To make matters worse, Ethereum has become such popular subject of speculation that its price has skyrocketed to the point of being too expensive for smaller transactions.
When you read the whitepaper (at least as it stands today, November 8th 2017), you’re quite possibly going to wonder where our ratings come from and whether we’re nuts. For all intents and purposes, it reads like a decentralized, virtual in-app marketplace play. Which we would not find particularly interesting.
In fact, the team’s insistence on deploying statistics about market adoption of mobile apps, gaming demographics, in-app exchanges and the like is extremely distracting from what we consider to be the important and exciting part of the GoNetwork ICO. (Even their winning hackathon entry, Pocket, is more of a team positioning statement than a genuine stepping-stone into this world.)
It is our belief that the use case (virtual goods within games) that the GoNetwork team has focused on is mildly interesting at best – but that the actual solution they are proposing is potentially much bigger and more remarkable than they have suggested.
Perhaps they are aware of the perils of hubris (in which case, congratulations on being the first team in cryptocurrency history to achieve self-actualization); perhaps their expertise in mobile gaming got them this far, and abandoning it would be painful.
It is also possible that the team simply pivoted from one model to another when a better option became clear, and they are still finessing their communications to reflect their more focused direction – but we believe that if the team looks significantly beyond any self-imposed limitations, they may have found themselves with a mega-project on their hands. (One final thought: maybe they DO know, and this is their version of a stealth ICO… in which case we apologize!)
The GoNetwork team seeks to remedy the issue of Ethereum scaling and build a mobile-focused superhighway for the Ethereum network. In the whitepaper, they describe the project thus:
“GoNetwork is creating a low-cost, low-latency and scalable network for Ethereum that will be used by mass mobile, desktop and web platforms.”
They state their plans to do this by using state channels. A state channel is a method that allows two people to start a transaction with one another on the blockchain, but then move off-chain for a virtually limitless number of direct transactions with each other until they are ready to settle up, which is then done back on the blockchain. And since there is no need to verify or mine transactions until they are ready to settle up, this makes the whole process super fast and inexpensive.
This idea can then be further developed to create a network of individual state channels so that everyone is eventually connected to each other via a series of one more multiple indirect connections.
Imagine a long-haul flight with multiple connections but no layover time. It may be a bit annoying but it still beats driving.
If this is starting to sound a bit familiar then you’ve read our article on the recent Raiden ICO. This is also similar to Lightning Network, bitcoin’s scaling solution.
So why not just use Raiden? Well, here is just where the founders of GoNetwork have found a sweet spot for their project. Currently all network scaling effects are focused on desktop… and limited, if any, support is being directed towards mobile platforms. And with desktop web browsing now overtaken by mobile, it’s no wonder that they are so focused on solving the scalability from a mobile perspective.
But why can’t existing solutions like Raiden work for mobile? In the end it’s simply a matter of connecting two people that have a live connection, right?
We had a chance to chat with CTO Amit Shah in their telegram channel today, and he explained to us that currently:
“Raiden runs as a companion node on desktop, there are no mobile builds, and it’s written in python. The core concepts are similar to lightning. State channels and HTLC. But all this tech has to be developed for mobile, some cases from ground up. Secondly, mobile ecosystems have further limitations, you don’t want to sync a node on mobile. … Currently the question that we are researching is overcoming intermittent network connections during long network routes.”
So it makes perfect sense that the mobile world will require its own native scaling solutions that address the specific nuances of mobile phones and mobile networks. (One of our analysts was founder of a mobile app development shop, and is particularly keen to attest to the need for mobile specific solutions.)
The team claims that they are about 20% of the way into development of the GoNetwork platform, and it is unclear when the platform will be ready for use. Their roadmap does, however, highlight that they plan to release GoExchange into public beta in Q2 of 2018.
GoExchange will be a decentralized mobile marketplace for in-app virtual goods for gamers that will be built on top of the GoNetwork platform. This would presumably be a great way for the team to kick the tires on the platform and show real-world adoption, as they already run several successful mobile games with millions of users.
The economics behind the GOT token are fairly straightforward. Its creators intend for the tokens to represent the transaction cost of the off-chain solution, explaining that a buyer can purchase tokens via crypto (Ethereum to begin with, with adoption of other cryptocurrencies later) or fiat currency.
As the number and cost of transactions on the Ethereum network increases, state channels provide an increasingly-viable and attractive alternative; however the number of tokens does not increase. Thus in this scenario, increased demand and limited supply for the means of transaction (GOT token) drives a rise in price for the token holder.
We see a potential issue here: while ordinarily we prefer to see lower token supply (still looking at you, KIN) in this instance we have some concern that the 100 million GoTokens might not actually be enough. Of course, it depends what the transaction fees might be – perhaps they’re 1/1000th of a token – but this aspect of the token economy does not appear to be addressed in the current whitepaper, nor can we find any indication of whether tokens are burned and disappear forever from the GOT ecosystem, or whether they are returned to the company after a transaction – thus allowing them to be redistributed in future raises.
We feel that further information on this subject would be of benefit to potential token holders, but that it does not negatively influence the overall rating.
The team behind GoNetwork is undeniably a top notch team with deep expertise in mobile development and software architecture.
Rashid Khan is CEO/Founder of Infinidy Corp, one of Canada’s leading game development studios.
CTO Amit Shah is equally strong with many years of experience in software architecture. The rest of the team members are well-qualified in their respective fields.
One thing we did notice however is that for a team that is attempting to tackle such a fundamentally aspect of the Ethereum network’s infrastructure, we would surely have loved to see a bit more blockchain related talent and experience on the roster.
We feel that the 25% reserved for the GoNetwork ICO team is on the high side, especially for a utility token. Offering a total of 50% in the ICO would probably feel even less generous with a higher token supply; however, if the team actually cracks this problem, it could represent one of the few ICOs we’re aware of at present with truly stratospheric potential. In which case the token holder probably won’t mind the founders getting wealthy too.
The mission at hand is undeniably one of enormous magnitude. The scaling of the Ethereum platform is recognized as one of the biggest challenges that the blockchain community will witness in the months to come.
Layer on the complexity and nuanced nature of the mobile landscape and you have yourself a virtually insurmountable feat for any one team. But such is the feat that the GoNetwork team has set out to undertake and they have proven their ability to execute before.
We really like the problem (not that it exists, just that there is a specific need here) and we think the GoNetwork team just might be able to come up with a solution, but we sincerely have to caution against a potentially over-aggressive product roadmap and timeline given the team’s seemingly limited experience in blockchain-related development.
Note to GoNetwork ICO team – if we see one GOT Token? advertising campaign, we’re downgrading you immediately to an F. Just don’t do it.
Project Name: GoNetwork
Token Symbol: GOT
Official website: https://www.gonetwork.co
Whitepaper: Available here
Whitelist date: Open
TGE Date:
Hard Cap: $30M
Total Token Supply: 100 million
% of tokens distributed to Crowdsale: 50%
Exchange Rate: U.S Dollar
Token distribution Date: TBA
The team at Crypto Briefing analyzes an ICO against ten criteria, as shown above.
These criteria are not, however, weighted evenly – our proprietary rating system attributes different degrees of importance to each of the criteria, based on our experience of how directly they can lead to the success of the ICO in question, and its token investors.
As always, please be careful when investing in Initial Coin Offerings (ICOs) as they can be highly speculative and offer few – if any – guarantees. It is sound practice to never invest more than you can afford to lose.
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This category accounts for the leaders, developers, and advisors.
Poor quality, weak, or inexperienced leadership can doom a project from the outset. Advisors who serve only to pad their own resumes and who have ill-defined roles can be concerning. But great leadership, with relevant industry experience and contacts, can make the difference between a successful and profitable ICO, and a flub.
If you don’t have a team willing and able to build the thing, it won’t matter who is at the helm. Good talent is hard to find. Developer profiles should be scrutinized to ensure that they have a proven history of working in a field where they should be able to succeed.
What is the technology behind this ICO, what product are they creating, and is it new, innovative, different – and needed?
The IOTA project is a spectacular example of engineers run amok. The technology described or in use must be maintainable, achievable, and realistic, otherwise the risk of it never coming into existence is incredibly high.
Tokens which have no actual use case are probably the worst off, although speculation can still make them have some form of value.
The best tokens we review are the ones that have a forced use case – you must have this token to play in some game that you will probably desire to play in. The very best utility tokens are the ones which put the token holder in the position of supplying tokens to businesses who would be able to effectively make use of the platforms in question.
There doesn’t have to be a market in order for an ICO to score well in this category – but if it intends to create one, the argument has to be extremely compelling.
If there is an existing market, questions here involve whether it is ripe for disruption, whether the technology enables something better, cheaper, or faster (for example) than existing solutions, and whether the market is historically amenable to new ideas.
Most ideas have several implementations. If there are others in the same field, the analyst needs to ensure that the others don’t have obvious advantages over the company in question.
Moreover, this is the place where the analyst should identify any potential weaknesses in the company’s position moving forward. For instance, a fundamental weakness in the STORJ system is that the token is not required for purchasing storage.
With many ICO ideas, the timing may be too late or too early. It’s important for the analyst to consider how much demand there is for the product in question. While the IPO boom funded a lot of great ideas that eventually did come to fruition, a good analyst would recognize when an idea is too early, too late, or just right.
Some of the least compelling ICO propositions are those that claim their founders will achieve some far-off goal, sometime in the future, just so long as they have your cash with which to do it.
More interesting (usually) is the ICO that seeks to further some progress along the path to success, and which has a clearly-identified roadmap with achievable and reasonable milestones along the way. Founders who are already partially-invested in their products are generally more invested in their futures.
The ICO marketplace is becoming more crowded and more competitive. While in the past it was enough to merely announce an offering, today’s successful ICO’s work hard to build awareness and excitement around their offering.
Even for bad ideas, good marketing and hype can be a saving grace for the investor. We have to score based on the successful penetration of the investor circles as well as general presentation here.
Tokens with supplies which, if they reached $10, would subsume all the money in the world, are often ill-fated. This is mainly because there are not enough market participants to float higher prices on these tokens.
One day this won’t be the case at all, and you’ll have many people with large bags of many different things, actively trading and maintaining prices that couldn’t have made sense today. But today we have to take into serious account the total token supply, and although ICO founders usually aim too high, it can also be too low.
A supply that is low and also has a burn function, for instance, might spell a short life cycle for the product (a red flag to the investor, since the company can simply re-issue a new token later without owing you anything).
Our lead analyst has been reviewing Initial Coin Offerings since they arrived on the cryptocurrency scene. Together with our analyst specialists, he has built a weighted system that accounts for the technical aspects of each ICO we review – however, there is always room for the ‘gut feel’ of each idea, or for some novel or interesting use-case not discussed elsewhere.
The ‘Secret Sauce’ is a weighted blend of these factors, based on how we anticipate any given ICO might perform, and should be a strong indicator of how we might choose to make our personal financial decisions.
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