Analysis of COMSA – ICO Solution to Centralized Businesses - Crush Crypto

Analysis of COMSA – ICO Solution to Centralized Businesses

Summary

  • Project name: COMSA
  • Token symbol: CMS
  • Website: https://comsa.io/en/
  • Whitepaper: https://comsa.io/en/download/52847/
  • Hard cap: Uncapped
  • Conversion rate: 1 CMS = 1 USD
  • Maximum market cap at ICO on a fully diluted basis: Undetermined, crowdsale is uncapped
  • Bonus structure: 14% bonus from October 2-4, 10% bonus from October 4-11, 5% bonus from October 11 to 25, 2017
  • Presale or white list: Pre-sale is over
  • Token platform: Mosaic token on NEM
  • Crowdsale date: 14:00 JST on October 2 to November 6, 2017 (please refer to COMSA’s website for the most up-to-date information)
  • Token distribution date: After the end of crowdsale
Video summary (video is 11:27 long):

Project Overview

What does the company/project do?

COMSA is a complete Initial Coin Offering (ICO) fundraising platform built on the NEM protocol meant for the streamlining of cryptocurrency funding.

"COMSA" is derived from “Computer” and 鎖 (Kusari/Sa): meaning "chain," combining to make "blockchain."

COMSA is a one-stop solution to ICO projects providing services including:

  • Business planning
  • Preparation of white paper
  • Legal support
  • Token issuance and sale
  • Listing of tokens on Zaif exchange
  • Mijin private blockchain technology as internal ledgers

The tokens for projects run by COMSA can either be Mosaic tokens on the NEM blockchain or ERC-20 tokens on Ethereum blockchain.

COMSA targets established Japanese companies rather than the current trend of new decentralized apps. Two companies are set to have their ICOs run by COMSA – crowdfunding site Campfire and public-listed Premium Water Holdings

COMSA CORE can be used for performing atomic swap transactions (1) between different blockchains, and (2) for users who do not have XEM to perform transactions that require XEM as network fees.

COMSA CORE

COMSA also runs an exchange, Zaif. The trading volume of Zaif was around $15 million in the past 24 hours before this article is published. All the ICOs using the COMSA platform will be listed on Zaif. As Zaif does not currently charge trading fees, it should be a money losing business.

How advanced is the project?

Tech Bureau, the team behind COMSA, has been selling Mijin as an enterprise ledger solution for over a year.

In an interview, the CEO of Tech Bureau said that the platform could host 20-30 token sales before the end of 2018, all of which will be with “legit and working businesses.” Four are slated to come in 2017, with crowdfunding site Campfire and public-listed Premium Water Holdings set to go first.

The funds raised from the ICO will be allocated for the following:

  • Development of COMSA ICO token sale platform.
  • Development of the COMSA CORE.
  • Development of the COMSA HUB.
  • Development of crypto pegged tokens.
  • Development of fiat pegged tokens.
  • Add multi-language user interface and customer support to Zaif Exchange (English, Chinese and more).
  • Add streamlined processes to list any ERC-20 tokens or NEM MOSAIC tokens on Zaif exchange.
  • Add /XEM and /ETH to all the currency pairs.
  • PR and marketing of COMSA solution and its related services.

What are the tokens used for and how can token value appreciate?

CMS tokens have a few uses.

Revenues from the following will be used for burning CMS token

  • ICO consulting and service fees.
  • Conversion fees of COMSA CORE.
  • Mijin license fees and BaaS license fees.

Discount for future ICOs on the COMSA platform

  • 5% discount for all future ICOs run by COMSA. This benefit is only applicable to COMSA ICO contributors and it is unclear how many tokens a user needs in order enjoy this benefit.

Community vote

  • CMS token holders are eligible to vote for an ICO project based on the number of tokens they hold to determine whether COMSA should go ahead with the ICO or not.
  • Realistically, we don’t see why CMS token holders would reject any ICOs on the platform.

Invite-only pre-sale of selected future ICOs

  • CMS token holders can have early access to certain ICOs run by COMSA.

Of the above uses, the only one that (1) scales with the usage of COMSA platform and (2) is significant enough to move the needle is the revenue from COMSA CORE’s conversion fees. Revenues from ICO consulting and licensing fees should be minuscule compared to the project’s market cap. 

Hence, the more usage COMSA has and the more conversion fees COMSA receives, the more valuable the CMS tokens should be.

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Team

Tech Bureau, the company behind COMSA, announced that it has raised $15 million from Japan’s largest VC firm JAFCO to kickstart its plans. It previous raised $10 million.

Other than the CEO, we couldn’t find details of the key team members. Takao Asayama, CEO of Tech Bureau, is a Council Member of NEM, Director of BCCC & JCBA.

COMSA has a large ICO committee, including members of the NEM.io Foundation, investors of Tech Bureau, and executives in the Japanese corporate world.


Opportunities

  • COMSA has very strong backings from the Japanese corporate world, with established businesses lined up to do ICOs on the COMSA platform.
  • As COMSA is targeting established corporations including public companies, the market can be very large if COMSA is successful.
  • Japan is one of the more crypto-friendly countries in the world, with many merchants accepting Bitcoin as payment. It would make it easier for COMSA to achieve its vision.
  • Tech Bureau received $25 million of funding from VC firms, which means it has passed the rigorous due diligence of institutional investors.

Concerns

  • CMS tokens are not very useful. The biggest driver for CMS price seems to be the burning of revenues from the conversion fees generated by COMSA CORE, but it is unclear how much the fees will be. Other than this use, CMS tokens are not very useful because people can contribute into ICOs on the COMSA platform using other cryptocurrencies such as BTC and ETH, reducing the needs for CMS tokens.
  • The use of COMSA CORE and NEM platform makes this ICO seemingly overcomplicated. A lot of the hurdles can be avoided by just running ICOs on the Ethereum blockchain. This project seems to benefit NEM more than CMS token holders.
  • COMSA aims to be primarily an ICO platform that allows tokens be on the NEM platform. Right now, Ethereum is the dominant platform for ICOs, with 83 of the top 100 most valuable tokens being ERC-20 tokens. Network effect is huge for ICO platforms, so it would be difficult for COMSA/NEM to gain a significant market share over Ethereum in the ICO space.
  • The project is probably going to have a hard time expanding beyond Japan because of language and culture barriers.
  • COMSA focuses solely on ICO so it is more exposed to the regulatory uncertainty around ICOs.
  • There are two established companies lined up to do an ICO on the COMSA platform but it is unclear what the tokens for the two companies are going to be used for. It won’t be directly used as equity stake, so each company would need to find a way for the token to be useful and valuable. It might involve changing the business model of the company for the token to make sense.
  • Dilution is high for an uncapped raise. Since ICO participants receive 50% of the total tokens, for every $1 in contribution, fully diluted market cap will increase by $2.
  • We believe decentralized exchange is the future for crypto. We are not excited about the prospects of Zaif, a centralized exchange. However, COMSA will spend a portion of the proceeds to build out Zaif.

Conclusion

Overall, we are neutral about this ICO for both its short- and long-term potential. Our thoughts of the tokens for short term and long term are as follows:

For short-term holding

Neutral. Uncapped raises are generally not good for short-term because there is no unmet demand. Everyone who wanted to participate can do so.

COMSA has generated pretty good market awareness, so we believe it is going to have a fairly large market cap right off the bat.

For long-term holding

Neutral. This project is very exciting and can bring established companies into the crypto world. However, we believe that CMS tokens are not very useful. Even if COMSA as a project is successful, CMS tokens may not necessarily benefit from it.


For more information about the ICO, please visit the following links:

Website: https://comsa.io/en/ 

Whitepaper: https://comsa.io/en/download/52847/ 

Blog: https://comsa.io/en/#information

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