COTI ICO Token Metrics & Key Info
- Total Supply: 2,000,000,000 – further 2,000,000,000 locked in reserve
- Available in Sale: 30% of initial 2 billion tokens
- Hard Cap: $30 million
- Market Cap: $100 million
- Token Type: ERC-20, migrating to own coin following mainnet launch
- Ticker: COTI
- Pre-Sale: Yes, completed raising ~$3 million
- Whitelist: See website
- Public Sale Live: 15th June
- Weekly Bonuses: N/A
- Volume Bonuses: N/A
- Lock Up Bonuses: 5% for 6 months, 10% for 12 months, 20% for 12 months
- Token Distribution Date: August – September 2018
- Website: https://coti.io/
Currency of the Internet, or COTI, is aiming to build a decentralized payment network and infrastructure to enable efficient and low cost transactions. The project intends to achieve this through utilizing DAG technology - similar to IOTA, Nano etc, therefore addressing the scalability issue faced by many blockchain based cryptocurrencies. As COTI is designed as a payment system for commerce, they are developing a rich ecosystem to facilitate this. Some of the main features include a Trust Scoring Engine that automatically assesses network interactions and assigns users a universal trust rating - essentially a decentralized credit score, an independent Mediation System for resolving transaction disputes and a consumer wallet and debit card that supports both crypto and fiat. For merchants, the team are developing a suite of tools that includes processing tools for easy integration of COTI payment infrastructure into online e-commerce platforms, as well as hedging services to limit exposure to volatile markets. Check out full review of COTI network below.
- Detailed technical whitepaper and non-technical business overview that covers many aspects of the project and shows the team have put a lot of thought into the COTI ecosystem. For example, they acknowledge that one of the major hurdles of cryptocurrency adoption for payments is its volatility, and they seek to address this with a complex hedging system for merchants. However, theoretical models and use cases are all the project is limited to at the moment - see cons for more detail.
- Trillions of dollars worth of payments are made annually with roughly 2 billion people still unbanked, so the potential market is massive. However, competition is also rife with legacy systems like Paypal, Visa, Mastercard etc dominating the space. That said, benefits to merchants such as cost savings on fees and better cash flow due to faster settlement times play in COTIs favour.
- A large team comprised of 20 members and 13 advisors who are all accomplished in their individual fields. Especially in online marketing, which is very important for a project that depends entirely on adoption of COTI as a payment method by consumers and merchants.
- Multi-currency wallet support that covers both crypto and fiat should help adoption of the ecosystem in general and mitigate the risk of adoption of COTI tokens being the only incentive.
- The social and community aspect of COTI is pretty strong, with currently 41k+ Telegram members, 20k+ Facebook followers and 500+ Reddit subscribers. Community support is always important, but especially so for a project like this that depends entirely on people using COTI to pay for goods and services. This is exemplified by the use of DAG technology, which relies on new transactions to verify previous ones so the network gets faster (in theory) as it scales.
- Good lock up periods of 6-24 months on 50% of tokens for private sale investors will help to reduce dumping once tokens hit an exchange and should help stabilize the price.
- COTI has secured some good partnerships including Bancor to provide liquidity for ERC-20 tokens with COTI, financial services company MicroMoney, with German-based companies nakomoto.to and Advanced Blockchain AG to advance research, development and marketing of COTI. Most notable is the partnership with global payments network Processing.com, who provide payment solutions to tens of thousands of merchants and process billions of dollars in annual transactions.
- At the time of writing, there is no proof of concept, prototype or code to analyze on GitHub, so we must assume the project is still in early stages. Furthermore, Alpha net prototype is due to be launched in August, just one month after the token sale, which seems unrealistic given there is currently no evidence of development. Furthermore, mainnet is not due for launch until Q2 2019. For a coin whose main use case is as a payment network and given how fast the crypto world moves, this is a very long time away and adds considerable risk e.g. scalability solutions for existing coins plus new competition could render COTI obsolete by that time.
- The ICO token metrics are not very appealing, with a relatively high market cap of $100m. Additionally, these metrics only apply to the initial 2 billion tokens released, but a further 2 billion will be locked in reserve for use at a later date. Although they cannot be released without a majority vote from independent COTI mediators or before mainnet launch, it still means initial investments will become diluted over time.
- The ERC-20 token has no utility as its only purpose is to be converted to COTI coins when mainnet launches. Even then, the only utility of COTI coins will be for payment and no one is using them yet, so currently the project is highly speculative with no mechanism for tokens to appreciate beyond that for quite some time.
- The token economics are also of slight concern. Cryptocurrencies are currently highly volatile with regular swings in excess of 10-20%. Many merchants operate on slim margins - sometimes as low as 5% - meaning the risk of using COTI as a payment method is high. Whilst hedging and other mechanisms can help alleviate this, it also adds an additional cost to merchants as they need to buy options, whilst a large market of options sellers is required. Therefore, widespread adoption is required in order to stabilize the price, but this is unlikely to happen without a stable price. Thus, the economic model seems flawed without additional stabilizing methods.
- Whilst the team are certainly accomplished in their fields, there is a lack of experience in the blockchain and cryptocurrency space. Yes there are researchers and software engineers, but for a project of this scope you would expect there to be at least one member who has founded a successful cryptocurrency project. Especially when you consider that IOTA, the biggest DAG coin with 100s of developers working on it and 10,000s of users, has only achieved 500-800 tps in stress tests. This makes COTIs target of 10,000 seem highly unrealistic.
Business Summary: https://coti.io/en/files/COTI-overview-document.pdf?v=c25fec147f8
Technical Whitepaper: https://coti.io/en/files/COTI-technical-whitepaper.pdf?v=c392fd0bc30
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