Effect.AI ICO Review – Decentralized Network for Artificial Intelligence

Summary

  • Project name: Effect.AI
  • Token symbol: EFX
  • Website: https://effect.ai/
  • White paper: https://effect.ai/download/effect_whitepaper.pdf
  • Hard cap: EUR 14.82 million for 40% of total tokens
  • Conversion rate: 1 EFX = EUR 0.057
  • Maximum market cap at ICO on a fully diluted basis: EUR 37 million
  • Bonus structure: 10% for first 5,200,000 tokens
  • Presale or white list: No presale, whitelist TBA
  • Blockchain platform: NEP-5 token on NEO
  • Countries excluded: USA, China, South Korea, Singapore
  • Timeline: ICO starting in March (day TBD), token sale ends 18 days after start date (Please refer to effect.ai’s website for the most up to date information)
  • Token distribution date: Upon token sale conclusion
Video summary (video is 8:27 long):

Project Overview

What does the company/project do?

The artificial intelligence market is growing at an increasing rate, with a projected size of $15.7 trillion as early as 2030. Between transportation, commerce, and communication, AI is likely to have a large impact on human life as time goes on.

However, only a few companies such as Google, Facebook, and Amazon are positioned to develop these algorithms right now. This is because the entry barrier is currently very high due to data processing, diverging tasks, and computational costs.

Effect.AI proposes a private, decentralized ecosystem for AI development and AI related services called The Effect Network. This network is designed to provide an alternative to services like Amazon Mechanical Turk, Fiverr, OneSpace and Guru.

The Effect Network will operate fully on smart contracts deployed on the NEO blockchain. The goal will be to provide most, if not all of the services necessary for a healthy and accessible artificial intelligence market.

The network requires no commissions, has a low barrier to entry, and is split up into three distinct phases: Mechanical Turk, Smart Market, and Effect Network, the details of which are described below.

Phase 1: Mechanical Turk – Effect Mechanical Turk is a private, decentralized marketplace for work that requires human intelligence. It is based on centralized business models such as Amazon Mechanical Turk, Fiverr, OneSpace, and Guru.com. However, the key difference for the Effect Mechanical Turk is that it is peer-to-peer, connecting supply and demand more efficiently.

Requesters can create tasks called Human Intelligence Tasks to be completed by workers in exchange for compensation. These tasks are described and compiled through smart contracts on the blockchain.

Effect.ai mechanical turk

Phase 2: Smart Market – The Effect Smart Market will be a decentralized marketplace where algorithms can exchange their services with users and each other. Application owners can register their AI product and specify the price or usage fee, and these applications are available for everyone on the Smart Market.

The users interested in an AI product will have to transfer the required funds to the owner to get an authorization token that allows them to interact with the specified AI.

Phase 3: Effect Network – Up until phase 3, the algorithms still run on centralized servers. The final ‘Network’ phase of The Effect Network will put these algorithms on the blockchain, so they are running on a global scale via the NEO blockchain.

How advanced is the project?

The Effect.AI Algorithm Project began in Q2 2016, and the first implementation of this algorithm on a website occurred in Q2 2017. After this implementation, the idea was born to put Effect.AI on a blockchain.

From there, the company was officially founded in Q3 2017, and the first white paper release also occurred in this quarter. Phase 1 of the project officially began in Q4.

The full release of phase 1 is set for Q3 2018. Phase 2 is currently set to come out in Q2 2019. Phase 3 is set for Q4 2019.

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

The EFX token will be launched on the NEO blockchain, adhering to the NEP-5 token standard. It will be the medium for payments between workers and requesters on The Effect Network.

Effect.AI’s first goal is to maintain liquidity for EFX tokens, especially during the early stages where no major exchanges have listed the token. They want the following actions to always be possible on their platform:

  1. Workers are able to sell their EFX rewards for native tokens
  2. Requesters and network users are able to buy EFX

To help with this, The Effect Network will maintain a central pool of tokens to provide liquidity, encourage adoption, and stabilize network fees. This pool is called the Galaxy Pool and consists of a mix of EFX and native tokens.

The Galaxy Pool ensures stable exchange rates for platform users, and is not suitable for day traders. It has a mechanism to prevent price manipulation.

As EFX tokens are used as a currency on The Effect Network, the more activity the network has, the more valuable EFX tokens should be.

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Team

Effect.AI has a team of 8 and is based out of the Netherlands. The biographies of key team members are listed below:

Chris Dawe, CEO – Chris graduated from the University of Toronto in 2006 with a degree in Business Management/Marketing. Before founding Effect.AI, he was a project manager for Itsavirus, based out of the Amsterdam Area.

Jesse Eisses, Blockchain Lead – Jesse has previous work experience as a developer for Itsavirus and MyAdbooker, and doing research for 3DUniversum. He graduated from the University of Amsterdam with bachelor’s and master’s degree in artificial intelligence. Jesse is one of the lead developers for Effect.AI, focusing on the blockchain side.

Laurens Verspeek, Development Lead – Laurens previously worked as a web developer for Itsavirus, where he eventually became a lead developer. He has a bachelor’s degree in computer science from the University of Amsterdam, and a master’s in computer science from VU Amsterdam.

Nick Vogel, Design & Interaction Lead – Nick started his career as a media designer, working for Otwee B.V., MTV Networks, and others. He co-founded a custom jewelry story called Cococci in 2013, then worked as a media designer and lead designer for Itsavirus before becoming the design and interaction lead for Effect.AI.

The Effect.AI advisor list has not been released to the public yet.


Opportunities

  • A lot of Human Intelligence Tasks can be performed by people without specialized skills. Therefore, even the unbanked in any countries can work on The Effect Network whereas they cannot become a worker on other centralized platforms because they don’t have a way to receive compensation.
  • According to the team’s projection, workers on The Effect Network can earn $9/hour on average while they can only earn $2/hour on current centralized platforms.
  • The project is ambitious but is a logical progress. The transition from phase 1 to 3 makes sense and each phase builds on top of the previous one. EFX tokens should have plenty of usage even when only phase 1 is launched.
  • 20% of total token supply is locked up for 18 months for the purpose of a future token sale. This is a positive sign as it shows that the team (1) has incentive to make progress and keep token price high, (2) has a long-term commitment to the project.

Concerns

  • The team is on the younger side and most members have relatively little working experience. It is unclear whether they can handle the development intensive project.
  • The team has not disclosed any advisor which is very uncommon.
  • The project has not released an Alpha/MVP yet, which makes it a white paper project.

Conclusion

Overall, we are neutral about the ICO’s flipping potential but like its long-term potential. Our thoughts on buying the tokens for flipping and investing for the long term are as follows:

For flipping

Neutral. The idea is great and the hard cap is low. However, the team will not actively reach out to exchange for the listing of EFX tokens. Considering that EFX is a NEP-5 token which very few exchanges list, it might have a hard time generating liquidity initially.

For long-term holding

Good. The project has a lot of potential even with just the first phase completed. By eliminating the middleman, workers can earn substantially more and receive payments instantly with the use of cryptocurrency. If successful, this project can provide lots of real-world benefits which we very much support.


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.

This article is contributed by Victor Lai with the help of our intern Kieran O’Day.

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