Bgogo ICO Review – First Crypto Trading Platform with Supernodes - Crush Crypto

Bgogo ICO Review – First Crypto Trading Platform with Supernodes

Summary

  • Project name: Bgogo Exchange
  • Token symbol: BGG
  • Website: https://bgogo.com
  • White paper: https://bgogo.com/assets/white-paper/BGG-Token-Whitepaper-v1.8EN.pdf
  • Hard cap: 17,000 ETH (15,000 ETH during private sale and to supernodes, 2,000 ETH during public sale) for 10% of total tokens
  • Conversion rate: Private sale: 1 ETH = 66,666 BGG; public sale: 1 ETH = 69,999.3 BGG.
  • Maximum market cap at ICO on a fully diluted basis: $51 million based on current ETH price of $300
  • Bonus structure: Whitelisted public sale participants have a 5% bonus over the private sale price, with no lockup period.
  • Private sale: The private sale has already been completed with 10,500 ETH raised from 21 supernodes and 4,500 ETH from strategic investors.
  • White list: Bgogo’s public sale will be a Genesis Mining event (exact date to be confirmed) that will start 24 hours before mining is officially opened to the public. Only whitelisted users can participate. Details on the Genesis Mining event can be found here: https://bgogo.com/announcement?link=mining.
  • ERC20 token: Yes (will be switched to native tokens when the mainnet is launched)
  • Countries excluded: TBA
  • Timeline: TBA
  • Token distribution date: TBA
Video summary (video is 9:12 long):

Project Overview

What does the company/project do?

Bgogo is a cryptocurrency trading platform that differentiates itself as the first exchange to feature supernode listing authority.

The platform currently has 45 trading pairs between various digital assets with Bitcoin, Ether and Tether with low maker and taker fees at 0.1%. For a list of current trading pairs and fees, see: https://bgogo.com/fees.

Bgogo also utilizes transaction mining, a new feature that is used by a number of exchanges (e.g. FCoin) whereby a portion of commission revenue is distributed back to token holders. Bgogo claims to have a higher utilization rate as it uses a buyback model where 100% of the commission revenue is used to repurchase BGG tokens.

A key discerning feature of Bgogo is its supernodes, which are elected on a quarterly basis based on the top 21 holders of BGG tokens, subject to vetting from the Bgogo team which includes KYC reviews on all candidates.

Each supernode has full discretion to list one cryptocurrency candidate during the quarter; 20% of the transaction fees generated by the successful candidate will be returned to the supernode. Supernodes are required to lock their BGG token positions for at least one quarter during their tenure.

BGG tokens will be privately funded by 21 blockchain companies and VC firms as shown in the below diagram and as such, they will act as the platform’s first supernodes.

Other key features:

  • Negative transaction fees: Users pay trading fees to Bgogo exchange and are rewarded with a 105% trading fee return every 30 minutes in the form of BGG tokens. 50% of the total token supply will be used for rewarding users for mining BGG tokens. 
  • Daily token repurchase: Bgogo will use 100% of the accumulated trading fees to buyback BGG tokens, which will be sent to a public burn address and permanently burned.

The below diagram illustrates how Bgogo’s negative transaction fees and daily token repurchase works:

How advanced is the project?

Bgogo was established in 2017, initially under the name bitgogo, and began exchange operations in April 2018. The exchange platform is already live with a number of popular trading pairs available.

After the listing of the BGG token, the platform will be in full operation offering negative transaction fees and daily token repurchases. Supernodes will be able to exercise their rights and new supernodes will be re-elected on a quarterly basis.

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

The BGG token is Bgogo’s native token and serves as the proof of stake for the platform’s trading infrastructure. It is used to incentivize various parties within Bgogo exchange:

  • Supernodes: As one of the top 21 holders of BGG tokens, supernodes will be entitled to certain benefits such as the right to vote for listing one cryptocurrency candidate and will receive 20% of the transaction fees generated by the candidate. 
  • Exchange users: Users are rewarded with BGG tokens for trading/mining. There will be a limited number of tokens that can be mined per day. At the moment, a single account can mine up to $1 million in volume per day. 

BGG tokens should appreciate in value in the following ways:

  • Increasing trading volume on the exchange will result in Bgogo collecting more commission revenue. This will enable them to buyback more tokens which are subsequently burned and the value of the remaining tokens will go up in value, all else equal. 
  • As popularity of the platform increases, the value of being a supernode will increase. Those who wish to become a Bgogo supernode will be incentivized to lock more BGG tokens during their tenure.

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Team

Bgogo currently has at least 35 people on its team with prior experience in major companies such as Facebook, Microsoft, Twitter and Boston Consulting Group. The biographies of Bgogo’s key team members are summarized below:

Maximilian Wang, CEO – Previously a software engineer at Facebook where he founded Facebook’s crypto syndicate. Prior to that, he was a software engineer at PINT where he led the development of a web components based MVC grid library. He obtained Bachelor’s degree in Electric Engineering and Automatic from the East China University of Science and Technology in 2012 and Master’s degree in Computer Science from the University of California, San Diego in 2014.

Nicolas Chen, CTO – Previously an engineer at Facebook where he was responsible for maintaining the network security of 2 billion Facebook, WhatsApp, and Instagram users. He was a Regional Champion in the ACM International Collegiate Programming Contest, a global programming competition for university students. He obtained Bachelor’s degree in Computer Science from Shanghai Jiaotong University.

Oscar Song, COO – Previously the operations chief of Huobi and was a founding team member of Gukebao. He obtained Bachelor’s degree in Finance from Renmin University of China.

Ciara Sun, CSO – Previously a consultant at the Boston Consulting Group for two years and worked in various roles at Grant Thornton China, Deloitte, Cummins, EY and Transamerica. She obtained her Bachelor’s degree in Accounting and Finance in 2013 and MBA in Financial Analysis in 2016, both from Indiana University – Kelley School of Business.

Bgogo’s investors include Node Capital, Sky9 Capital, Goopal Digital, and Hike Capital. The company recently raised $10 million in their Pre-A & A rounds from various investors.

In addition, there are 21 blockchain companies and VC firms that have invested 500 ETH each to become Bgogo’s initial supernodes, including Pantera Capital, DHVC, BlockWater Capital, Arrington XRP Capital, Hashed, BlockVC, PreAngel, Signum Capital, etc.


Opportunities

  • Supernodes are unlikely to sell their tokens unless they plan to give up their supernode status in the next quarter. Currently, most of the large cryptocurrency funds are awash with liquidity, so we don’t expect the current supernodes are eager to reduce their BGG positions and give up the right to be a supernode.
  • Each supernode has one opportunity to list a cryptocurrency of their choice on the exchange. This authority can be very valuable if Bgogo scales to be a top exchange.
  • Supernodes are rewarded 20% of the transaction fees generated by Bgogo for the coins that the supernodes nominated. This provides incentives for supernodes to nominate high quality coins.
  • The daily buyback mechanism helps maintain demand for BGG tokens. 
  • The Bgogo team has a good mix of experience from the business and technical side, including experience from operating other cryptocurrency exchange.
  • As there are no trading commissions for users, Bgogo could gain traction quickly if the liquidity is strong. This model could be sustainable in the long-term as the team intends to eventually make money by building "B Lab”, which will use the platform’s own fund to incubate and invest in projects to generate profits.

Concerns

  • Trans-mining is controversial and there is currently no proven example over a long period of time. Using all the transaction fees for buyback would result in the exchange seeking other source of cash flow to maintain operations, despite Bgogo having a healthy balance sheet now. Profits from investments done by B Labs can be quite volatile.
  • There are numerous well-funded cryptocurrency exchanges being launched recently, so the competition is fierce.
  • Compliance and regulation, something that can change dramatically overnight, is something that every exchange faces. A mitigation factor is that Bgogo only engages in crypto-to-crypto trading pairs.
  • Because of the buyback nature, Bgogo tokens are most likely security tokens and it is unlikely that it would be listed on other centralized exchanges.

Conclusion

Our thoughts of the tokens for short term and long term are as follows:

For short-term holding: S

The supernodes have paid a token price higher than the public, so there’s no dumping pressure from large holders due to different pricing tiers. This pricing strategy is unprecedented and we believe it sets a great example as to how pricing for ICOs should be done. If the project is good, the opportunity for a bigger allocation is the bonus already.

Half of the BGG tokens held by supernodes will be unlocked on the first day of token listing. However, we believe the vast majority of the funds are not in a hurry to liquidate their BGG tokens, otherwise they risk losing the supernode status.

Therefore, we believe that there wouldn’t be much selling pressure in the beginning. Combined with the low initial token supply and trans-mining hype, BGG tokens should perform well right out of the gate.

For long-term holding: A

The long-term success of BGG token hinges on whether the exchange can generate traction beyond the initial hype period. Almost all the value of the Bgogo exchange platform is accrued to BGG tokens instead of equities, so if Bgogo does well and becomes a top exchange over time, BGG tokens should perform well.

Given the team’s strong background and commitment to the public community/smaller investors, we believe Bgogo has a good chance to succeed.


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

* The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions.

Our rating system is based on 5 tiers: S/A/B/C/D, with S being the highest and D being the lowest rating.

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