Ink Protocol ICO Review – Reputation and Payments for Marketplaces

Summary

  • Project name: Ink Protocol
  • Token symbol: XNK
  • Website: https://paywithink.com/
  • White paper: https://paywithink.com/wp-content/uploads/2017/12/Ink_Protocol_Whitepaper_V5_Listia_Inc.pdf
  • Hard cap: $15 Million for 30% of tokens
  • Conversion rate: 1 ETH = 7,500 XNK
  • Maximum market cap at ICO on a fully diluted basis: $50 million
  • Bonus structure: Presale Tier 1: 1 ETH = 9,375 XNK (20% Discount) / Presale Tier 2: 1 ETH = 8,825 XNK (~15% Discount) / Presale Tier 3: 1 ETH = 8,350 XNK (~10% Discount)
  • Presale or white list: Both
  • ERC-20 Token: Yes
  • Countries excluded: USA, China, Canada
  • Timeline: Presale registration live until 8pm UTC January 22, 2018 / Presale from January 22 to 31, 2018 / Crowdsale registration from 8pm UTC January 22 to February 1, 2018 / Crowdsale from February 1 to 28, 2018 (please refer to Ink Protocol’s website for the most up-to-date information)
  • Token distribution date: After token sale ends
Video summary (video is 8:17 long):

Project Overview

What does the company/project do?

Listia is a web and mobile marketplace where users exchange goods, trading unwanted items for credits that can be used to purchase goods offered by other users. These credits are currently called “Listia Credits”, a centralized digital currency controlled by Listia, Inc.

They are now building the Ink Protocol and will launch it on their marketplace with a corresponding token called XNK, designed to take over the role of Listia Credits. By adopting a blockchain based system, Listia will benefit from decentralization as well as more security and transparency in their operations.

First, the smart contract will feature a decentralized feedback mechanism, where buyers can leave feedback for the seller about each transaction. This feedback will consist of a rating and comment about the transaction, stored as public data on the Ethereum blockchain.

As more third-party marketplaces adopt the Ink Protocol, this feedback will be stored for each marketplace and aggregated together between all markets to form a decentralized reputation for each user, identified by their Ethereum address.

Any marketplace that supports the Ink Protocol will benefit from improved trust and security for their platforms. Even brand-new markets can launch with instant trust and user feedback in place due to Ink and the XNK token.

The idea is that users will begin to see completed peer-to-peer transactions as something they should be credited for, and marketplaces that refuse to give them public credit will be viewed as less trustworthy than those that adopt the Ink Protocol. Users will migrate to marketplaces that give them public recognition on the blockchain, and markets have a strong incentive to adopt the protocol.

How advanced is the project?

The team released the Listia marketplace back in 2009 as a “marketplace for free stuff”, with the vision of creating a safe, easy, and rewarding way for people to get rid of the unwanted goods they had lying around the house.

Since launch, they have racked up 10 million registered users who have combined to exchange 100 million items through the Listia website and mobile app.

In addition, they have allowed users to buy and sell Bitcoin since February 2014, and even experimented with creating a cryptocurrency in November 2014.

The future development roadmap for the project has not been released yet.

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

XNK token has multiple uses for the Listia Marketplace, with the main purpose of acting as a payment network for buyers and sellers.

XNK will replace Listia Credits as the marketplace currency, and users with existing Listia Credits will be able to trade them in for XNK. In addition, users can earn XNK the same way they used to earn credits, which could be referring other users or completing tasks/offers.

Customers will benefit from the transition to XNK because it will be more fungible and tradable for other currencies, and Listia will benefit from no longer acting as a central bank who have to print and regulate Listia Credits.

As peer-to-peer transactions cannot always be trusted, the token/blockchain will also act as an added level of security using escrow and third-party dispute resolution. When a buyer pays, XNK tokens are held in the smart contract until the buyer indicates the item has been received.

There is also a staking function where the seller must stake their reputation against the tokens until the buyer receives the item. If something goes wrong in this process, users assign a human or automated mediator to transactions that acts as a third party smart contract to help settle disputes.

Mediators will receive fees from XNK transactions as incentives, and it is up to the buyers, sellers, and community to vet these third-party mediators.

As XNK tokens are used on the Listia platform, the more activities the platform has, the more valuable XNK tokens should be.

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Team

Listia Inc. was founded in 2009 and is headquartered in Mountain View, California. According to Crunchbase, Listia raised a total of $11.2 million in 4 rounds. Investors of Listia include Y Combinator, Andreessen Horowitz and General Catalyst. The latest round was done in October 2013. They have between 51-100 employees and 10 million members on their app.

The bio of the key team members are listed below:

Gee-Hwan Chuang, Co-founder & CEO – M.S. and B.S. in electrical and computer engineering from Cornell University. Before co-founding Listia in 2009, he worked as a software engineer for ZyXEL Communications and founded GEE! Technologies, a company that owns and operates several online shopping, e-commerce, and blog sites.

James Fong, Co-founder & President of Listia – B.S. in electrical engineering from Cornell University and M.S. in electrical engineering from San Jose State. He is a self-described entrepreneur who has worked as an engineer for Sun Microsystems and Micron technology in the early 2000s before co-founding Listia in 2009.

Gee-Hsien Chuang, Head of Product for Listia – B.S. in computer science from Cornell University and MBA from the National Taiwan University. He has worked as a software engineer for Tropian, Cisco, and Slideshare before becoming the first employee of Listia. His mobile/web application developer specialties are Ruby on Rails, Python, and Google AppEngine.

Ngan Pham, CTO of Listia – Ngan received a B.S. in computer science from the University of California Davis in 2007. Since then, he has worked as an IT assistant for Stellartech Research and a software engineer for StreamSend. His specialties include Ruby on Rails, Javascript, C/C++, HTML/CSS, Python, Photoshop, Solidity, and blockchain technology. He was hired as CTO of Listia in August of 2011.

Advisors of the project include Samuel M Smith, PhD, Chief Architect Reputation AI Systems at ConsenSys, Philip Krim, CEO of Casper, and Lester Lim, Marketing Strategy Advisor for CoinFi and Selfkey.


Opportunities

  • Listia is an established platform with 10 million registered user and is backed by reputable VCs. This shows the experience and capability of the team.
  • The token model makes sense. We believe the switch from Listia credit to XNK token would be smooth and not impact the user experience at all.
  • Since Listia will implement the use of XNK tokens soon after the end of ICO, there will be immediately traction with the usage of tokens. This is different from most other ICOs that will not be able to launch their platform until 3-12 months after ICO.

Concerns

  • From the public information that we gather (app ranking history, website traffic, the co-founder admitting that Listia’s growth is not as fast as everyone wanted), and last fund raising round being four years ago), we believe Listia is not a growing business. Since the switch to XNK token does not dramatically change the business model of Listia, we are not sure if the ICO will help Listia’s growth.
  • It is less than 2 weeks before presale begins and the future roadmap of the project is not released yet. We cannot analyze the soundness of the roadmap and level of planning of the team in executing its vision.

Conclusion

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

For flipping

Good. With a hard cap of $15 million ($3.5 million already sold), solid team and high market awareness, we believe the project can be sold out with unmet demand.

Seeing (1) the high market demand for participating in ICOs, (2) a few high profile ICOs canceling due to raising enough funding from presale, and (3) there is a disconnect between the hard cap of ICOs and market cap of existing competing projects, we believe that the days of sub-$20 million solid ICOs are limited until the next correction arrives.

For long-term holding

Neutral. We are not sure how successful and profitable Listia is given the various information we gathered. The utilization of cryptocurrency does not dramatically change and improve the business model of Listia, so we are neutral about the benefits that the adoption of blockchain has on Listia.


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.

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