Analysis of Status.im ICO
- Project Name: Status
- Token ticker: SNT
- Website: https://status.im/
- Whitepaper: https://status.im/whitepaper.pdf
- Hard cap: Hidden caps to be revealed during the ICO period (dynamic ceiling, explained below at the end of this section)
- Soft Cap: CHF12 million (Swiss Francs)
- Conversion rate: 10,000 SNT per 1 ETH
- Total token supply: Unknown before ICO because the hard cap is hidden, but ICO contributors will receive 41% of the total supply
- Maximum market cap at ICO: Unknown before ICO because the hard cap is hidden
- Bonus structure: None
- ERC20 token: Yes
- Timeline: June 20 at 2pm GMT to 30, 2017 (ICO will run for another 24 hours after the soft cap is reached, please visit http://contribute.status.im/ for more information)
Without knowing what the hard cap is, it is difficult to see how attractive the project is from an investment perspective. However, given the soft cap is at CHF12 million, I am going to assume the hard cap is somewhere between CHF25 million and CHF50 million.
This range is completely arbitrary and I could be way off, but personally I think it is unlikely that the hard cap is over four times higher than the soft cap. Under this assumption, the market cap is anywhere between CHF61 million and CHF122 million.
Dynamic ceiling explained:
The first ceiling is public and begins the moment 12M CHF equivalent has been reached. It signifies that the contribution period will end within 24 hours, or sooner if the hidden hard ceiling has been met.
The moment the first ceiling has been triggered, there will be a series of additional hidden ceilings that begin after a given number of blocks has been reached. Each hidden ceiling decreases in size and has to be revealed publicly before accepting further contributions.
The curve of the ceilings, the number of blocks between ceilings, and the hard ceiling amount will not be revealed to participants until the Contribution Period begins in an attempt to discourage whales from consuming the entire SNT allocation.
Status is one of the more highly anticipated ICOs recently. On its Slack channel, there are already over 6,800 members. This is huge when you consider the subreddit page about ICOs has only 2,500 subscribers. This is because (1) Status has a bounty program that gives out the token SGT, which can be converted to SNT after the ICO, and (2) Status has been around for longer than most ICOs.
What does the company/project do?
In short, Status aims to be the WeChat and App Store for Ethereum. Status’ goal is to drive mass adoption of Ethereum by providing a user-friendly platform for people to get on board.
The Status application, which is currently in alpha, and available for Android & iOS, allows users to:
- Send and receive encrypted messages, smart contracts, and payments.
- Browse, chat, and interact with decentralized applications and decentralized chatbots.
- Store and control crypto-assets with the built-in Status Wallet.
Status also has a DApp directory that is similar to the Apple App Store or the Google Play Store.
Below is a teaser video of Status, which was published a few days ago (video is 3:31 long):
In the whitepaper, Status provided numerous sample use cases. I selected a few of them here:
- Stakeholder A, an early adopter in Cuba, has been paying for Push Notifications, but Google’s Firebase has just been blocked in his country. He seamlessly changes to a different provider from with inside Status.
- Stakeholder B, a DApp developer, mandates only registered Status users to post on his discussion board DApp, in order to mitigate sockpuppet accounts using his decentralized application and increase the quality of content.
- Stakeholder C, an artist and celebrity wishes to spend some time chatting with fans, and also desires a means of monetizing their fan base.
- Stakeholder D, a street vendor in India, becomes a Seller on the Status Teller Network as a means of generating additional revenue.
- Stakeholder E, a casual user, sends Stakeholder B a sticker as a birthday present. The sticker is backed by 5 DGX, representing 5 grams of gold.
Given the Ethereum ecosystem is still in its infancy and token models are still being researched and developed, Status also plans to introduce the ability to propose new functionality to the community.
If you’d rather watch than read, Jarrad Hope, CEO of Status, gave a clear explanation of Status in Devcon2 (video is 14:35 long):
How advanced is the project?
Status is at a more advanced stage than the majority of the ICOs out there. The Status team has been working on the project since Q1 2016 and they rolled out the first public alpha in January 2017 for Android and iOS.
The image below shows the development roadmap for Status:
Source: Status wiki page
How can token holders make money?
SNT is the token used within the Status app. As shown above, there are many use cases for the token, most of which needs SNT to function. The more usage of the Status app, the more valuable the token should be.
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Carl and Jarrad, the co-founders of Status, have had a working relationship for 6 years on various projects, and 3 of those years were spent operating a software distribution network, driving over 20 million installs to various software offerings, the profits of which were used to fund Status and a team of 10 until this point.
Currently, Status has a full-time team of 8. In addition, they also have a community of part-time contributors as well. In the jobs page (https://status.im/jobs.html), they are hiring for two positions.
Jarrad Hope previous founded Opulence (https://www.opulence.im), a bootstrapped software distribution network growing to over $20M Revenue in 30 months.
Status has a strong team of advisors, including the following people:
- Viktor Trón, Ethereum core developer for the go client, Ethereum Foundation
- Bo Shen, General Partner of Fenbushi, a China-based venture capital fund investing in Blockchain-enabled companies
- Yessin Schiegg, CFO of Alpha Associates
1) Status has a very ambitious goal – it wants to be the WeChat of the West. Once fully developed, Status does have many features that are unmatched by current messaging apps. I wonder why existing messengers (cough, Facebook, cough) do not try to do what Status is doing already?
2) There is a real need for a decentralized solution. Some users don’t want to use peer-to-peer payments and encrypted communication in a centralized platform due to privacy concerns.
3) Strong team
- The team has been working together for a long time. Status is an ongoing project for a number of years with a clear roadmap.
- Many of the advisors are reputable within the blockchain world.
4) As with all the messenger and social media apps, there is a strong network effect in play for Status. The more users Status has, the more powerful the entire network is. Therefore, success of SNT hinges largely on whether Status (and by extension, Ethereum) can achieve widespread adoption.
1) In order to be successful, Status needs to achieve mass adoption which can be difficult.
- Without a large user base, developers would not want to create DApps on the platform. Who wants to build an app for the Windows Mobile platform?
2) In the whitepaper, Status outlined a number of problems that they are trying to solve. As you can see from the sample use cases above, users can do a lot of different things on Status.
- Status might be trying to tackle too many problems at the same time. If the team cannot execute well enough, they would spread themselves too thin.
- I think it is better if they could focus on one problem at a time and fix them one by one.
3) Hidden cap may be larger than investors anticipated, making the ICO undersubscribed. This would hurt the short-term performance of SNT.
4) There are many very popular messaging apps already. Status needs to compete successfully against very strong and established players (Facebook messenger, Whatsapp, iMessage, Line, etc.) in order to survive.
5) On a related note, it looks like the Kin project by Kik (another messaging app) also tries to tackle similar problems. So Status will go against an already functional messaging app.
Overall, I like this ICO because SNT is used in many facets of the Status ecosystem. If done right, Status can deliver a lot more functionality than current messaging apps.
Mass adoption is the key here, so Status needs to find a way for even the least tech-savvy users to easily use the different functionalities within the app.
However, because their goal is so ambitious, the risk of failure is also high. Status is a high-risk-high-return type of project. Five to ten years from now, I believe Status will either be a massive success or a total failure.
As a supporter of Ethereum, naturally I am rooting for Status’ success because its aim is to drive mass adoption of Ethereum. Therefore, please note that my analysis might be biased here.
My thoughts on buying the tokens for flipping and investing for the long term are as follows:
- There should be good potential for flipping because (1) the ICO is highly anticipated and (2) the team is very strong. Unless the hidden cap is significantly larger than investors expected, I think investing in the ICO should deliver a solid short-term return.
For long-term holding
- Like I mentioned before, Status has a very binary outcome: it will either be a massive homerun or a total failure. If it is successful, the long-term return can be astronomical; if it fails, SNT will likely be worthless.
- Therefore, I would suggest putting a smaller than average amount for investing in this ICO if you are holding it for the long-term.
Company website: https://status.im/
Status.im’s blog: https://blog.status.im/
Wiki page: https://wiki.status.im/
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