Synereo: Incredible Value Play or Dying Project?
In "Synereo - Washing dirty linen in public" @nanzo-scoop did a great job highlighting the core team breakdown in the Synereo project that's tanking its value. At heart is a running and very public dispute between its CEO and CTO, and the subsequent risk of the team not being able to deliver on its core promises.
ICOs Are Risky, But This Is Ridiculous
This comes unfortunately for investors just after a couple highly successful ICO rounds that raised ~$4.7 million. The AMP tokens issued in the ICOs have subsequently lost more than half their value, a reminder that ICOs carry extreme risk to investors:
The main allure of the ICO was Synereo's ambitious RChain project:
RChains is a generic decentralized computation and storage platform, where the users of the network provide the resources a la Maidsafe or Ethereum. In fact RChain even has much of the same blueprint as Ethereum, it will be a 'virtual machine', a "World Computer" no less. It will run other 'dApps' (not just Synereo's Attention Economy). It will have its own programming language. It will even have a Caspar Style Proof of Stake consensus algorithm. It will be fast and scalable.
So just after Synereo raised over $4.7 million in cash, the team is breaking down and the primary selling point, RChain, looks like it's too ambitious a project to complete on schedule within budget.
Some Advice for Synereo
You guys are sitting on a pile of cash, whether it's the $4.7 million raised in total or just over $2 million after taxes and expenditures thus far. However you slice it, that's still a decent war chest with which to recover.
- First and foremost, stop the in-fighting. Like, now! Hopefully you've learned your lesson and realize that some things should be handled behind closed doors.
- De-scope, at least in the short run, and deliver a few small successes.
#1 seems obvious, but it'll likely be difficult. There are serious disagreements and egos are tough to temper, but investors have given you guys some serious money and you owe it to them to tighten up the professionalism. Whether this is your CEO, CTO, both, or neither stepping down, something positive needs to happen ASAP.
No matter what happens organizationally, your entire project is at risk of flopping. It's time to de-scope, even if only in the short run, and focus on a few easy victories. Think small but make sure these victories still work towards the longer term vision, and be very public announcing their completion.
Value Play or Dying Project?
Synereo's market capitalization is just over $3.8 million, which puts it well under 2x the cash on hand. If the team can recover and regain public confidence, this could be a tremendous value opportunity for investors. Coming together again as a team and knocking out a few successes could easily double or triple AMP market capitalization.
Should personal differences and inability to deliver on a few small successes continue to destroy the project, whoever controls their bank account(s) should simply start repurchasing AMP and gracefully retire the project with some funds returned to investors. If this is the route, make sure your insiders DO NOT participate in this investor capital refund, else you'll surely face legal problems; walk away cleanly and relinquish any and all claims to funds raised.
However this pans out, we'll either see an incredible value opportunity in the project recovering, or just another crypto project fold.
What are your thoughts?
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Rob Viglione is a PhD Candidate in Finance @UofSC with research interests in cryptofinance, asset pricing, and innovation. He is a former physicist, mercenary mathematician, and military officer with experience in satellite radar, space launch vehicles, and combat support intelligence. Currently a Principal at Key Force Consulting, LLC, a start-up consulting group in North Carolina, and Head of U.S. & Canada Ambassadors @BlockPay, Rob holds an MBA in Finance & Marketing and the PMP certification. He is a passionate libertarian who advocates peace, freedom, and respect for individual life.
Image source: http://cryptocollectorsclub.tumblr.com/post/148503299859/how-to-safely-store-synereo-amp-tokens
Chart source: https://coinmarketcap.com/assets/synereo/
Good point, I have predicted in the past that AMP is no good:
https://steemit.com/steemit/@profitgenerator/why-i-am-not-buying-amp
Steemit is the real deal!
Ha, I like your Zimbabwean dollar comment in the article. I haven't tried their social media platform, very happy with Steemit...obviously.
Their RChain put them not-so-much as a competitor to Steemit, so I liked those ideas of building something along the lines of Ethereum. They just went way too ambitious right away and should scale back and go the MVP, evaluate, iterate, pivot approach to evolve into something useful. Otherwise, just start buying back AMPs and close shop when the funds run dry.
Yes, people like to use something that is already useable, not something that is just being developed.
Steemit was already useable when I joined 3 months ago, and it is still being developed, but we can already enjoy it.
Absolutely, which is why i advocate that Synereo focus small victories to regain trust and confidence.