Analysis of COSS ICO – Crypto-One-Stop-Solution - Crush Crypto

Analysis of COSS ICO – Crypto-One-Stop-Solution

Summary

  • Project Name: COSS
  • Token ticker: COSS
  • Websitehttps://coss.io/
  • Whitepaper: https://coss.io/documents/coss-whitepaper-v3.pdf
  • Hard cap: 216,667 ETH (ICO contributors own 65% of total token supply if hard cap is reached)
  • Soft Cap: No soft cap
  • Conversion rate: 1 ETH = 600 COSS
  • Maximum market cap at ICO: US$67 million assuming current ETH price of $200
  • Bonus structure: First 5 days – 15% Bonus, 5th to 10th day – 10% Bonus, 10th to 15th day – 8% Bonus, 15th to 20th day – 6% Bonus, 20th to 25th day – 4% Bonus
  • ERC20 token: Yes
  • Timeline: August 8 at 8:08pm SG time to September 6, 2017 (please refer to COSS’ website for most up-to-date information)
  • Token distribution date: No later than September 20, 2017

Project Overview

What does the company/project do?

COSS stands for Crypto-One-Stop-Solution. COSS aims to offer multiple cryptocurrency-related services in one place. It consists of a payment gateway, an exchange, a merchant list, market cap rankings, a marketplace, an e-wallet, various coin facilities, and a mobile platform.

The two revenue sources of COSS are from cryptocurrency exchange and payment gateway. In terms of fees, they are comparable to the existing exchanges / payment solution providers.

How advanced is the project?

The idea of COSS was conceived in May 2016 when co-founder Rune Evensen was taking MIT Fintech course modules.

Since then, development started and COSS was registered in Singapore as a company. In April 2017, COSS launched the exchange in beta. Since it is a new exchange, it hasn’t generated a lot of volume yet. Here is some data on their current trading volume.

On the payment solutions front, COSS obtained over 100 merchants and 600 users on board.

Going forward, COSS aims to grow and develop its platform using various means:

  • Strategic Partnerships with companies from Fintech, blockchain and related areas.
  • Merge or acquire other startups that have good concepts and potential.
  • Incorporation of COSS as entity in different locations.
  • Development of new features internally.

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

The tokens will receive half of the transaction fees that COSS generates from the exchange and payment gateway services. The success of the token hinges on whether the COSS platform will grow significantly in the future.

In order to receive the revenue share, you need to 1) hold the token in the wallet that you control the private key (i.e. not on exchange) and 2) register that wallet on the COSS dashboard.

COSS is expected to have two sources of revenue: exchange and payment gateway.

Exchange:

  • All users start with a standard trading fee of 0.2% and as trading volume increase, the fee gradually declines to as low as 0.04%.
  • 50% of this revenue is shared with COSS token owners.

Payment gateway:

  • The COSS merchant platform operates on a 0.75% fee derived from each transaction.
  • 50% of this revenue is shared with COSS token owners.

In order to calculate whether the ICO is a worthwhile investment, I have done some math:

For exchange, assuming COSS will collect an average of 0.15% transaction fee, token holders will receive half of that, or 0.075%. Assuming the fair value of COSS would generate a yield of 2% per year, at maximum ICO valuation, COSS needs to generate $1.8 billion in transactions per year or $5 million a day.

For payment gateway, COSS will receive 0.75% fee for all transactions and token holders will receive half of that, or 0.375%. Assuming the fair value of COSS would generate a yield of 2%, at maximum ICO valuation, COSS needs to process $357 million in transactions per year or $1 million a day.

If you believe COSS will achieve the level of scale beyond what was mentioned to justify its valuation, then the tokens are probably a good investment for you.​

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Team

COSS has a large team of 12, including team members of Under Development Office, a software development company based in Romania. The management board is based in Singapore, with branches in New York and Bucharest.

It should be noted that in the majority of the team’s LinkedIn profile, they didn’t list COSS as their employer. One person even has “Seeking new opportunities - Maritime commercial industry” in his profile.


Opportunities

  • The project has been in development since last year and it already has a working product.
  • Both segments of the project, cryptocurrency exchange and payment processing, are large and growing quickly. If COSS succeeds in becoming one of the leaders in either space, token values should appreciate substantially.
  • The utility of token is straightforward – the more transaction fees COSS generates, the more valuable tokens are.

Concerns

  • I feel like COSS is trying to do too many things at the same time. On the white paper, they are working on “cryptocurrency exchange, newsfeed, market ranking, e-wallet, coin listing, cryptocurrency payment.”
    • Personally I would like to see the team focusing on one thing at a time, at least in the beginning.
  • COSS will have a difficult time reaching the hard cap of 216,667 ETH, given the relatively lack of awareness and current market environment.
  • COSS’ offerings are not better than those of competitors. If I were a user, I’m not sure if I would switch to COSS from other more established companies.
  • The team said that their differentiation comes from “bundling and the attempt to create a one-stop solution that is the main feature in itself.” However, there aren’t much synergies between the two segments – crypto exchange and payment processing. The target users are quite different.
  • The money that they raised may be used to acquire other companies. Current startup valuation, especially in the blockchain space, tend to be very rich and COSS may overpay for such acquisitions.

Conclusion

Overall, I dislike the ICO for its short-term potential and am neutral about its long-term potential. Our thoughts of the tokens for short term and long term are as follows:

For short-term holding

Not good because 1) it is unlikely that the project is able to reach its hard cap, 2) the token distribution date of September 20 is fairly far out.

For long-term holding

Neutral. On one hand, COSS already has a working product, but on the other hand, the project seems to have a lack of focus as it is trying to do everything at the same time. The two segments, crypto exchange and payment gateway, don’t seem to have much synergies so there aren’t much benefits to provide this “one-stop-solution”.


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

Website: https://coss.io/

Whitepaper: https://coss.io/documents/coss-whitepaper-v3.pdf

Bitcointalk thread: https://bitcointalk.org/index.php?topic=2050735.0;all

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