Analysis of Ambrosus ICO – Blockchain-Based Supply Chain Ecosystem

Summary

  • Project name: Ambrosus
  • Token symbol: AMB
  • Website: https://ambrosus.com/
  • Whitepaper: https://ambrosus.com/wp-content/uploads/2017/09/Ambrosus-White-Paper-V8-1.pdf
  • Hard cap: CHF 100 million (ICO contributors own 40% of total token supply if hard cap is reached)
  • Soft Cap: None
  • Conversion rate: 1 ETH = 1,000 AMB
  • Maximum market cap at ICO on a fully diluted basis: CHF 250 million if hard cap is reached
  • Bonus structure: 10% for contributions over 300 ETH / 20% for contributions over 1,600 ETH / 30% for contributions over 3,200 ETH
  • Pre-sale / white list available: Pre-sale is over
  • ERC20 token: Yes
  • Timeline: Postponed to September 22, 2017 (please refer to Ambrosus’ website for the most up-to-date information)
  • Token distribution date: After the end of ICO

Project Overview

What does the company/project do?

The Ambrosus network is a blockchain-based ecosystem for supply chains, ensuring the origin, quality, compliance and proper handling of items tracked by the network.

Ambrosus’ primary focus is on improving supply chains for life-essential products, specifically food and medicine, although the protocol can be applied to other supply chains.

There are different components to the Ambrosus ecosystem:

  • Sensor Systems - Hardware sensors that feature plug-and-play compatibility with Ambrosus’ blockchain network. The hardware products include a range of non-invasive and rapid analytical devices for on-site measurement of biological samples.
  • Blockchain protocol - Ambrosus is building its protocol on Ethereum that will self-execute based on quality and safety data generated by sensors.
  • Secure data storage - All process readings are immutably recorded in a decentralized manner, which protects from hacking, data manipulation and fraud.
  • Developer tools - There are developer tools and modules to allow community members to build distributed apps, extensions and protocol upgrades, creating valuable solutions for society, including consumers, farmers, pharmacies, distributors and business owners.

Here are a few of Ambrosus’ use cases:

  • Food origins and tracing: Suppliers and distributors sign-off the batches of products by linking their individual identity to the signatures. This allows precise attribution of responsibility for quality assurance and prevents fraud.
  • Logistic sustainable improvement: Combination of temperature sensor and surroundings sensors to assess any container unusual physical parameter variation and bad exposure. Measurements at the container level are performed and alarms are triggered, informing the logistics directly.
  • Food delivery without the middleman: Food orders with partner restaurants and cafes would be placed through the decentralized marketplace and customers would pay directly to the delivery people without the payment passing through the middleman.

Here is an introductory video of Ambrosus (video is 1:55 long):

How advanced is the project?

Ambrosus was founded in 2016 and launched publicly in July 2017. They have released a demo. Here is a short walk through video of the demo (video is 1:12 long):

They have detailed their future roadmap in a blog post. Key dates are listed below:

  • October 2017 – Release of Alpha-version of Supply Chain Management Protocol; Release of Proof-of-Concept for sensing system, edge and central gateways.
  • November 2017 – Release of Alpha-version of the quality-driven decentralized marketplace for food and commodities.
  • December 2017 – Release of an Alpha-version of decentralized commodities trading platform.
  • February 2018 – Launch of Alpha-version of large-scale decentralized storage solution for supply chain sensors.
  • March 2018 – Launch of a public Beta version of marketplace, exchange platform and product checker software integrated into Ethereum blockchain.
  • June 2018 – Release of the first generation sensor systems for Ambrosus (sensors, tags and tracers) combined with self-healing (mesh) network functionality.
  • Spring 2019 – Launch of the first Generation of Nano sensors and Biosensors

What are the tokens used for and how can token holders make money?

Amber is the native token of Ambrosus, used to help trace products through their value chain, linking the information gathered to the records about the batch.

The tokens are used to keep information on the Ambrosus network up to date as products move across the supply chain. Amber tokens are sent to the network alongside readings and remain locked in the Measurements Smart Contract until a batch has completed its movement through the supply chain.

Amber is also the fuel for the Ambrosus ecosystem, used to access the network services, interact with the sensor systems and to enter commercial agreements assured by smart contracts.

As Amber is used to perform different actions within the Ambrosus ecosystem, the more usage the Ambrosus platform has, the more valuable the Amber tokens should be.

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Team

The team is comprised of 8 core members, with experience in the areas of sensor technology, data encryption, supply chains, blockchain, smart contracts and dApps.

Angel Versetti, CEO – Previously worked at the United Nations, World Resources Forum and Bloomberg.

Dr. Stefan Meyer, CTO – Previously led R&D projects at Nestle and other companies. He holds a PhD in Food Science (ultrasound applications in food industry) from the University of Leeds and MSc in Geosciences from the University of Lausanne.

Professor Jean-Paul Sandoz, Lead Engineer – Over 40 years of experience in seniors and microelectronics. He has served as Professors at the Engineering College of Le Locle and at the University of Applied Sciences of Western Switzerland for over 30 years.

The project is also backed by strong advisors including Dr. Jutta Steiner (co-founder of Parity and Grid Singularity), Dr. Vlad Trifa (founder of Web of Things and former Head of Digital Lab at Swisscom), Prof. Malcolm J W Povey (Professor of Food Physics at the University of Leeds), and Jehan Chu (Managing Partner of Kenetic Capital).

[Update on Sep 12, 2017: Ambrosus has removed Dr. Gavin Wood as an advisor. He is replaced by Parity Technologies as a technical advisor.]


Opportunities

  • The project has an above-average team and all-star advisors, which would legitimize the project even when the company is publicly launched only three months ago.
  • Presale has raised around CHF 30 million already.
  • New regulations or more stringent requirements around the distribution of specialty goods, such as medicinal products could increase demand for supply chain QA. For example, a recent change under the EU regulation, Good Distribution Practice of Medicinal Products for Human Use, requires companies to report any deviations to the distributor and the recipient of the affected medicinal products

Concerns

  • Food sensor and tracking is very common and lots of companies are doing it already. Ambrosus faces stiff competition in the traditional space, such as GlobeRanger, Oceansoft, and Blue Maestro, as well as in the blockchain space from Modum.
    • Modum has a blockchain-based temperature tracking system for medicinal products, with sensors that record environmental conditions during shipments. When goods change ownership, the data is checked against Ethereum smart contracts to validate the transaction and triggers alerts, payments, etc.
    • Modum already has a working product with 43 registered companies and 844 shipments, which is more advanced than Ambrosus.
    • They were featured on Nasdaq, World Economic Forum, among others, and have won several awards including Kickstarter Accelerator 2016.
    • Their token sale started on September 1, 2017 and their hard cap is $16.4 million – 16% of what Ambrosus is asking.
    • When asked about the difference between Ambrosus and Modum, Ambrosus keeps mentioning that they are creating a blockchain and Modum is not. However, is it necessary?
  • The project is only launched for three months old based on the Linkedin profiles of the CEO and CTO. We feel like this project receives the attention it has solely because of Gavin Wood and other advisors. We don’t even see a picture of the hardware – the component that is essential to the Ambrosus platform.
  • We believe Ambrosus is an average business idea, one that is difficult for the company to gain a substantial competitive advantage over other competitors and gobble up market share.
  • Seems like the only advantage Ambrosus has over existing competitors is that data on the Ambrosus platform is incorruptible and tamperproof. However, is it really needed? We don’t believe so. 
    • Moreover, Ambrosus is creating its own blockchain. We would question the security of it because there won’t be much decentralization of nodes as there’s no incentive for independent parties to validate the transactions on the Ambrosus blockchain.
  • Food contamination is not a very big problem that we are facing. Here is a list of major foodborne illness outbreaks. As you can see, they happen rather infrequently.


Conclusion

Overall, we are neutral on the ICO’s flipping potential and dislike its long-term potential.

This project is hyped because of its advisors. All-star advisors are great for an ICO only if the project makes sense. A company that was launched three months ago raising CHF100 million to create food sensors and a related blockchain doesn’t make much sense to us. Without business fundamentals, all the advisors in the world would not help the project.

My thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Neutral. The team of advisors really bring the awareness up. However, the hard cap of CHF 100 million is exceptionally high, especially if you consider the company is publicly launched only three months ago. The two token ICOs raising over $100 million, Bancor and Status, are both delivering negative return so far.

In addition, with Modum and Ambrosus’ ICO being so close together, many investors would compare the market cap of each ($23 million for Modum and CHF 250 million for Ambrosus on a fully diluted basis if hard caps are reached). Doing so would make Ambrosus’ valuation seem that much more expensive.

For long-term holding

Bad. As mentioned above, we don’t believe a blockchain solution is really necessary in the food safety supply chain space. Therefore, the chance of Ambrosus being a success is low.


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