- Project name: Gems
- Token symbol: GEM
- Website: https://gems.org
- White paper: https://gems.org/whitepaper.pdf
- Hard cap: $30 billion to 15 million following a Dutch Auction format (but potential change TBA) for 25% of total tokens
- Conversion rate: Unknown because of the Dutch auction format
- Maximum market cap at ICO on a fully diluted basis: Unknown because of the Dutch auction format
- Bonus structure: 20% for 1% of contributors (Sapphire tier) during first hour, 15% for 10% of contributors (Emerald tier) for the next 2 hours, then 10% (Ruby tier) decaying by 1% every 2 hours until there is no bonus
- Presale or white list: Whitelist closed on January 10, 2018
- ERC-20 Token: Yes
- Countries excluded: N/A
- Timeline: Crowdsale begins on January 30, 2018 (Please refer to Gems’ website for the most up to date information)
- Token distribution date: Following the token sale, but after an internal audit
What does the company/project do?
Gems aims to be a platform for micro-task requests and completion for pay. Examples of micro-tasks are labeling objects and photos that can be used for data science or machine learning.
Basically, Gems is trying to become the decentralized version of Amazon Mechanical Turk and Crowdflower. Gems eliminate consensus by redundancy through the use of staking and trust scoring mechanism.
The project has 4 major components; Staking, Trust Score, Platform/Modules, and Payment System.
Staking is how Gems proposes to solve a plethora of problems in tradition micro-task platforms. They do this by setting up an Ethereum smart contract to act as escrow during the duration of a micro-task deal.
For instance, a miner (a task doer), Requester, and Verifier all stake a certain amount of GEM tokens, and will be penalized a portion if they do their task poorly. This creates an automated dis-incentive for poor work.
Trust Score will be something that is tied to a miner’s ability to complete tasks proficiently and their Ethereum address. This means there is little point in changing one’s Ethereum address, as the associated reputation would also be lost.
As a miner completes more tasks, they earn a greater score, eventually obtaining the privilege to be a Verifier which is a very highly rated miner that can also verify the accuracy/timeliness of a given task by another miner to increase the quality of completed projects, while earning more.
The Platform is the engine that with drive Gems, where all major activity is performed. There are no centralized fees on the platform, so workers can earn more while requesters pay less.
Modules will be built on top of the platform over time as certain repeated tasks come up more and more. This way, it will be easier to request and have the demand for those micro-tasks filled.
The Payment System will essentially be a series of off-chain channels which will serve to reduce gas fees that would normally occur on-chain with the ethereum network. The payments will be subsequently, and in lump at a future date, secured and broadcast to the blockchain at a future date.
The video below is an introduction of the project (video is 2:18 long):
How advanced is the project?
They have, so far, an Alpha on which they had their community members complete micro-tasks as a demonstration, and claim there to have been completed ~1.5 million microtasks to date.
Their timeline, moving forward, does not go into great length of detail past 2018 Q1, but the following is a summary of what they hope to achieve following the token sale:
Protocol changes that will reduce consensus by redundancy - This means that, instead of obtaining accurate results by paying up to 15 people for the same job, a micro-task requester can pay significantly fewer in order to save money, while paying each individual more.
This is done, in part, by both parties staking a certain amount of gems on the validity of their work, so if anyone cheats, they are penalized. Furthermore, if Verifiers can confirm the quality of a project, and be rewarded for such, consensus could be reached more efficiently.
Job Request API - To begin, in their Alpha, Gems will only allow Requesters in one at a time to ensure quality, but will open up to allow more requesters to join the market/network.
What are the tokens used for and how can token value appreciate?
GEM tokens are going to be used as payment on the platform and for staking for miners, requesters and verifiers.
GEM tokens will be dependent on the usage of the platform. The more requests and users the network has, the more valuable GEM tokens should become.
Only two team members are shown on the Gems website, and their bio are listed below:
Rory O’Reilly: 2 years at Harvard in Undergraduate Psychology before dropping out to start Gifs.com, where he has served as CEO for the last 4 years. Receiver of the Thiel Fellowship, and was recognized by Forbes as a Top 30 Under 30.
Kieran O’Reilly: 1 year at Harvard in Undergraduate Sciences before dropping out to become the CTO of Gifs.com with his brother, and has been there for the over 3 years. He was also a recipient of the Thiel Fellowship, and recognized by Forbes as a top 30 Under 30.
They brought on some accomplished advisers, such as Biz Stone, the co-founder of Twitter and Medium, Joey Krug, co-founder of Augur and CIO of Pantera Capital, Luis Cuende, co-founder of Aragon, and CEO at Unpatent, and Joseph Urgo, co-founder of District0x, and CEO at Sourcerers.
- The project is led by a strong team who are successful entrepreneurs. The advisors are veterans in the blockchain space and can open doors for partnership with many other blockchain projects.
- Micro-tasks can be performed by pretty much anyone without specialized skills. Therefore, even the unbanked in any countries can work on the Gems platform whereas they cannot become a worker on other centralized platforms because they don’t have a way to receive compensation.
- The business model makes sense and can lead to substantial cost savings for requesters.
- Even though the vast majority (75%) of the tokens are held by the team, the breakdown of those tokens are not specified. We only know that they are being used to “subsidize requesters (onboard them to the platform), encourage new workers to the platform, and will be used for long term expenditures”.
- The token sales practice is questionable. There are criticisms in Gems’ use of Dutch auction for the token sale. Dutch auction by itself is not necessarily a bad token sale model. However, we dislike the following practices employed by Gems:
- Hyping up the project by employing a proof-of-care model but not disclosing token metrics. Same thing with closing the whitelist before announcing the token metrics. These are bad practices that are also being used by a number of other projects. We believe by delaying the reveal of token metrics, the team is trying to gauge how much they can raise as opposed to how much they need to complete the project (which is in our view the right way).
- The team has previously said that they will announce token metrics when subreddit subscribers hit 4,000 – this is gimmicky in our opinion.
- In a Dutch auction, participants should only contribute when the price falls to the valuation that they believe is compelling. However, Gems encourage participants to contribute early in order to enjoy the bonus. This goes against the spirit of a Dutch auction. We believe the bonus structure should not be conditional on the timing of contribution.
- The key team members of the project are working at gifs.com at the same time. It is unclear how they will allocate their time between the two ventures.
Overall, we are neutral for both the short- and long-term potential this ICO. Our thoughts of the tokens for short term and long term are as follows:
For short-term holding
Neutral. Dutch auction ensures that there will be no unmet demand for the tokens during the ICO stage. Everyone who wants to participate has a chance to do so. The bonus applied for early participation is likely going to push the valuation higher than under a normal Dutch auction.
For long-term holding
Neutral. While we like the idea and the use of token makes sense, the starting valuation of the project is likely going to be on the high side, which substantially lowers the upside potential.
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 John Coburn.