icorating xyo network rating review () · 2018-11-28 · archivists – are components of storage...
TRANSCRIPT
ICOrating
XYO NETWORK Rating Review (https://xyo.network)
ICO dates (20.03.2018 - 20.05.2018)
Web: icorating.com
Email: [email protected]
Twitter: @IcoRating
1. Rating 3
2. General Information about the Project and ICO 4
3. Description of the Services and Scope of the Project 6
4. Market Review 10
5. Team and Stakeholders 13
6. Token Analysis 19
7. Analysis of Factors Affecting the Future Value of the Token 20
8. Investment Risk Analysis 22
1. Rating
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.
2. 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.
ICO
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.
3. 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.
4. 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, DAG1 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 mining2. 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:
1 https://www.forbes.com/sites/shermanlee/2018/01/22/explaining-directed-acylic-graph-dag-the-real-blockchain-3-0/#2f972b9180bc 2 https://coinpickings.com/dag-alternative-ledger-system-cryptocurrencies/
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 time3 many of which have not lost
relevance currently. Here are just a few pictures from the article about the economic
impact of the IoT.
3 https://www.forbes.com/sites/louiscolumbus/2016/11/27/roundup-of-internet-of-things-forecasts-and-market-estimates-2016/#305bb50292d5
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.
5. 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.
Team
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.
Advisors
Tom Kysar
XYO Token Market Economy
Augur
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
6. 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.
7. 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.
8. 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. 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.