MyCrypto Works - ICO Review on Quantstamp
Quantstamp ICO Review, 16th November 2017 (Mainsale)
“Quantstamp is the first scalable security-audit for the Ethereum network”
Disclaimer: The contents of this document is purely for information purposes only. Therefore, this information should not be construed as financial advice. I am not your financial advisor and it is recommended you do your own research. Investments into crypto currencies and into initial coin offerings (ICO’s) are very high risk. You should only ever invest money can afford to lose and your standard of living should not be compromised.
The Overview…
“Quantstamp is a protocol that solves the smart contract security problem by creating a scalable and cost-effective system to audit the smart contracts written by software devs on the ethereum network.”
Quantstamp aims to connect developers, investors and users via proof-of-audit. By enabling automated checks on smart contracts this will combat security risks on the ethereum network. Verifiers who manage and identify security vulnerabilities are automatically rewarded in the sweep. A native token (QSP) will be used on the platform for the purposes of delivering computation fees to verifier nodes and bounties for finding the weaknesses.
The Project…
“Our vision for auditing is simple: more automation, higher security and lower cost.” Richard Ma, Quantstamp Co Founder.
The Team
Quantstamp formed operations in early 2017 out of Vancouver, Canada. The whitepaper, out since April, outlines a clear vision of its purpose and the problem their network will solve. Quantstamp’s team consists of experts in the security field from companies ranging from Google, Amazon, Tower Research, Experian and the Canadian cryptologic national agency. They have been supported by a strong advisory board from the fintech/blockchain industry. This includes Cryptocurrency Expert David Drake, Chairman at LDJ Capital and Blockchain Community Advisor Min Kim, ex-Tim Draper/Cryptonomos.
The purpose
By nature the appeal of blockchain and the decenteralised nature of its concept brings an embedded idea of trustlessness. This is the belief of wholeheartedly trusting in the quality protocol and the people who write the smart contracts — the transfer of value conducted between two parties. Ethereum has been the standard in blockchain technology allowing people to upload and run code on a global virtual machine (Ethereum VM).
‘The number of contracts on Ethereum has exploded to over 2 million that collectively hold over 12 million Ether. This means that potentially $1.6 billion USD worth of Ether is currently vulnerable to exploitation’ J Martinez, Medium Post
The underlying problem with smart contracts is that they aren’t very secure and can be exploited very easily. There have been notable stories in recent times of how hackers have been able to steal millions in ethereum from just by abusing a bug in its smart contract. Other occasions where reported with hackers exploiting bugs in the Parity multi-sig wallet further getting away with significant sums.
Ordinarily, the security (and trust) falls upon those software developers responsible for writing the smart contracts on the ethereum protocol. Sadly, there is a belief that these developers have not been very security minded leading to (unintentional) vulnerabilities of the smart contracts. Furthermore, hiring a security company to audit the codes (of the smart contracts) is both costly and impractical with the growing number of contracts.
Qauntstamp have positioned themselves as the first (and only as we speak) scalable security protocol system aiming to audit all projects on Ethereum network with the aim of being integrated eventually within the Ethereum protocol. They have created a cost effective automated system to find smart contract vulnerabilities whilst rewarding those verifier nodes with fees through their native QSP token.
The Roadmap
The Token Generation Event/ ICO…
Qauntstamp is launching a token generation event to raise capital for the continued development of its network.
Presales has (at time of writing) been oversubscribed with the know your customer (KYC) process already started. The total cap for the pre-sale is $11 million. It is divided according to Proof-of-Care. Tiered levels if bonuses were given dependant timing of participation.
They will be having a main sales round with fund raising goal set at $19 million with details yet to be disclosed. The main round will take place this November. There will be an individual cap on contributions during the main round. The cap depends on the number of participants on our whitelist. There will be no bonus during the main round. More information will be announced as part of the due process for a token sale. The minimum contribution for the pre-sale is 0.1 ETH.
Token Metrics:
Token Ticker: QSP
Total Token Supply: 1,000,000,000
Available during Token sale: 650,000,000
Total Fundraising Goal (Hard cap): $30,000,000
Pre-Sale Fundraising: $11,000,000
Pre-Sale Event: 9th Oct — 9th Nov
Pre-Sale Tokens Distribution: Proof of Care (POC) / Form to be completed
Caring level 1 ($3M): 1 ETH = 10,000 QSP (unchanged)
Caring level 2 ($4M): 1 ETH = 7,000 QSP
Caring level 3 ($4M): 1 ETH = 6,000 QSP
Main Sale: November 15th November 2017
Main Sale Tokens Distribution: 1 ETH = 5000 QSP / No POC applies
Token Release Date: TBC
Exchanges available on: TBC
Whitelist: Yes
Of the total token supply 65% will be allocated for the main sale. The distribution of the fundraising (total goal $30 million) from the sale is outlined below.
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Quanstamps’s legal counsel are confident that the QSP token will not be considered a security. More details here: https://goo.gl/7npjvz.
MyCrypto Assessment …
Quantstamp are bringing an automated security audit protocol to tackle a much needed problem of security risk on the ethereum protocol during ICO’s. The team already have a working product which was recently used for the first time by Request Network during their ICO event on the ethereum protocol (in early October). From early evidence the event went smoothly and no security issues were reported.
As first mover into the space, with no other notable entrants, they are at a significant advantage of being the main go to platform for scalable security-audit for smart contracts. This will give them scope to dominate the space and deliver their ambition of being embedded within the ethereum protocol.
The team and advisors are of very strong calibre. The team have a bright and highly educated team developing the project. Alongside the team, dominant blockchain advisers were enlisted on the project during its infancy stages.
The token metrics also appear to be well thought out with 65% of the supply being made available to the public. The Proof of Care (POC) criteria used for the pre-sale event has been well accepted in space as its purpose is to filter out those large institutional investors (referred to commonly as ‘whales’ in the space) whose objectives are only for short term profitability which would have a negative impact of project and its token price..
The Quantstamp team have been very active via various medium including Twitter, Telegram and Medium keeping its growing community up to date. They have been driving the marketing around the ICO event and have already been fully subscribed for their pre sale and main sale (whitelist). It is therefore expected Quantstamp will achieve their fundraising goal.
There are a few potential negatives/issues to consider. Although they have first mover advantage in the space, there likely will be copycat projects forthcoming. The impact of these cannot be yet factored. However, should future project deliver a better and improved solution than this could have a negative impact of Quantstamp and its growth/ROI for investors.
The other consideration is whether Ethereum itselfs decides to implement security with its protocol therefore completely negating the need for Quantstamp. However, this may not be a concern as the Ethereum project could and would likely adopt the likes of Quantstamp as it might be more cost effective to do so.
The MyCrypto ICO Rating…
In view of the Key Value Measures (KVM) measures, the Quantstamps overall score is 84%. A Strong Buy providing for a high potential for a success and positive return on investment.
KVM: scoring system ranges from low (1) to very high (5).
Concept Value: Very High (5). Unique proposition tackling a real issue within the space. First mover advantage.
Prototype Value: High (4). There is already a model in play. Request Network adopted the services of Quantstamp recently. More prospective confirmed/prospective audits would be desirable prior to ICO.
Individual Value: High (4). Strong combination of young bright and highly educated team alongside some very respected advisors. Lacking a unicorn but shouldn’t deter from the group capabilities.
ICO Value: High (4). Supply and level of funding raised appears to have become uniformed i.e. 1 billion tokens/$20m-$40m ranges. effective token price per ETH ($300 ETH assumed) would equate to $0.06 cents. 65% of token being made available is pretty good. However, the bonus structure for Proof of Care Level 1 appears highly generous.
Marketing Value: (4). Not a great deal of marketing has been invested into by the Quantstamp team, rather a great level of hype has built up around the project via the prominent social media platforms (youtube, twitter, telegram, etc). This has meant that the pre-sale was fully subscribed for and likely the same will apply to the whitelist.
Total: 21/25 (84%) Strong Buy.
(refer to appendices for the rating criteria)
ROI and Risk Rating …
Higher consideration is given to ICO and the Marketing KVM when forming a basis for short term ROI. For long term ROI, the Concept, Prototype, Individual and ICO KVM play a significant role.
Short term ROI: Medium/High
The token metrics are very favourable and the fundraising goal is fair ($30million) in view of the ICO marketplace. Both presale (fully subscribed) and mainsale (whitelist) have been in high demand. It is very likely the ICO fundraising is successful targets reached fairly quickly. For those who will seek to make a quick ROI by offloading their tokens on exchanges upon release, could potentially a see a profitable ROI due to the large community and high early demand. However, it would be advisable to be wary of the high pre-sale bonuses awarded which could suppress price for those seeking to hold due to presale purchasers early offloads.
Long term ROI: High
Qauntstamp have a working product/service which has already been used in the space. They have first mover advantage (due to lack of competition) in a key area of smart contracts security-audit. With a strong team and a clear roadmap, the potential ROI for long term investors is high/very high.
Risk Rating: Low
Quantstamp has a working product in use and the is a need for this product within the mainstream marketplace. The fundraising goal is reasonable in view of the project and its roadmap. The team and advisors are very strong. Overall a low risk rating is supported.
The Appendices…
Press/Reference Links
Websites : https://quantstamp.com/
WhitePaper: https://docsend.com/view/shcsmhe
Video Reel:
Github : https://github.com/quantstamp
Twitter: https://twitter.com/Quantstamp (2132 followers)
Telegram: 8482 members
LinkedIN: https://www.linkedin.com/company/25057251/
ICO website: https://quantstamp.com/
Medium: https://medium.com/quantstamp
Github: https://github.com/quantstamp
Audit completed for Request Network: https://request.network/#/
Medium Post: https://medium.com/@tutorip2007/the-most-interesting-ico-project-in-these-few-months-5d85c5e4405c
Medium Post: https://medium.com/@m.tozan/quanstamp-the-protocol-for-securing-smart-contracts-83e9ceb9126f
The Rating Criteria Explained:
Overall rating barometer:
90-100% Must Buy
80-89% Strong Buy
70-79% Speculative Buy
60-69% Risky Buy
<59% High Risk
Not all areas are a definitive measure and some elements are purely subjective. However, when the measures are applied to the majority of past successful ICO’s, they all score highly. The ICO landscape is every changing and as the space matures, then the assessment criteria’s will be adapted to accommodate thus growth.
END
If you have reached the end then thank you for getting through my first of hopefully many posts delving into the space of crypto currencies, blockchain and financial technology as a whole. I will be posting further ICO reviews on projects that interest me for the time being.
I will have a website launching soon. You can follow me on twitter (@mycryptoworks) where I try to be regularly active.
Constructive feedback would be much appreciated.
Regards,