ICOrating

NAU Rating Review (https://nau.io/)

ICO dates (29.11.2017 — 29.12.2017)

Web: icorating.com

Email: info@icorating.com

Twitter: @IcoRating

1. Ratings 3

2. General information about the Project and ICO 4

3. Description of the services and scope of the project 8

4. Engineering features of the project 12

5. Market Review 14

6. Competitors and competitive advantages of the Project 17

7. Risks 18

8. Team 19

9. Project development strategy and Roadmap 21

11. Economy of the Project 23

12. Token investment attractiveness 25

1. Ratings

We assign a "Stable" rating to the NAU project and recommend it in the long-term perspective to investors who accept the risks identified in this review. Participation in the ICO for speculative profit only makes sense if the number of investors increases significantly.

The idea of the project is attractive; it enables retailers to significantly reduce their advertising costs and make the process of attracting new customers transparent and effective. Users also receive benefits in the form of offers filtered in relation to location. The project team comprises a group of professionals who have the ability to implement the plans set by the project. The review of the market for digital coupons shows that it is large enough and according to forecasts will rapidly develop, attracting new audiences. The project’s model, in which the user who invites someone to the system benefits from the activities of the invitee in the system, will encourage new users to distribute information about the project and attract new participants.

However, the project has a number of risks and shortcomings that prevent us awarding it a higher rating. For the successful functioning of the platform, the team will have to attract a critical mass of both users and sellers; this number should be large enough to create a worthwhile service. Due to the lack of rewards for mining, the risk of a relative centralization of the system occurring is high, at least until the maintenance of NAU blockchain nodes becomes a prerequisite for sellers in this service. The complex ICO structure, with performance-based rounds and a large number of tokens reserved for subsequent issuances, the terms of which are not defined, could also scare potential investors away.

2. General information about the Project and ICO

NAU is a platform that directly connects retailers promoting their special offers with customers who want to take advantage of such offers. Users will interact with the platform through an application that detects their location and offers shares from retailers closest to them. The project's economy is based on the fact that advertising placement is paid for in NAU tokens, which are distributed in the ratio of 95%/5% between those who have invited a user to the system and the project itself when redeeming special offers, so retailers will pay only for real clients attracted by advertising.

The company is staging its ICO in order to finance the development and promotion of the project and other expenses over two years from the end of 2017 to 2019, when according to the authors, the project will break even and continue development without the need of additional investments.

The project will function using NAU tokens on its proprietary blockchain, based on multichain technology; during the ICO however, eNAU Ether tokens will be the tokens sold; they can then be exchanged at the rate of 1:1 for NAU.

The ICO consists of the following rounds: A private presale, public presale, public sale, private sale during which the value of one token will be fixed (any deposit will be equalled to dollars at the rate current at the time of purchase), and several performance-based rounds, during which the value of a single eNAU token will depend on market demand. Thus, every time NAU is launched in a new country, a new round of sale of some of the 500m tokens (e.g. 40m) will be announced. Contributions in cryptocurrency will be accepted within a month with a nomination in dollars, after which 40m tokens will be distributed in proportion to these contributions. The maximum number of tokens available for purchase is 1 billion eNAU; 24% of the sold token amount will be issued as a reward for the team and placed in a smart contract with deferred token withdrawals, and 45m tokens will be issued under supporting funds to support the participants.

Website

Whitepaper

Twitter

Telegram

Facebook

Bitcointalk

GitHub

Medium

YouTube

LinkedIn

ICO Start: 29.11.2017

ICO End: 29.12.2017

Token: eNAU

Hard cap: Absent, as 50% of the amount available for sale will be distributed during the performance-based rounds without a predefined token price.

Total issuance: maximum 1,285,000,000

Sep - Oct, 2017

Nov 1 - Nov 27, 2017

Nov 29 - Dec 29, 2017

Nov 29 - 1st PBR

Q1 2018 - Q42018

Private presale round

Public presale round

Public sale round

Private sale round

Performance-based rounds

Token amount 150,000,000 50,000,000 50,000,000 250,000,000 500,000,000

Price per 1 token

$0.04 $0.04 $0.04 $0.04 Flexible

Bonus tokens 300% 35% - - -

Bonus lock-up 6 months - - - -

Payment accepted

ETH / BTC / LTC / FIAT

ETH / BTC / LTC

ETH / BTC / LTC

ETH / BTC / LTC

ETH / BTC / LTC

Minimum investment

$50,000 - - $50,000 -

Maximum investment

- $50,000 $50,000 - -

Allocation of funds:

The creators declare the projected profit in the first two years of work to the amount of approximately $2.9m, so the distribution of funds together with the soft cap of $5m is given in the following form:

Retailers acquisition $2,598,000

Customers acquisition $1,247,500

R&D $1,740,000

Global & C-level expenses $1,026,000

BD & PR Expenses $713,000

IT Infrastructure $297,800

Legal $229,000

HQ and local offices launch $62,000

Total fixed costs $7,913,300

Attracted funds above the specified volume will be distributed roughly in the following proportion:

Token Issue Date: NAU Tokens in December 2017 Vesting: Tokens for the team will be issued in monthly instalments within 24 months from January 2019.

The documentation does not provide information on the future fate of unsold tokens, but according to statements from the CEO, Yaroslav Shakula, all tokens unclaimed during the ICO will be bought back by the founders with their own funds.

3. Description of the services and scope of the project

NAU is a project that aims to optimize attracting new customers to retailers, i.e. to carry out promotional events in the form of discounts and bonuses within a convenient platform without unnecessary intermediaries. The project is based on the so-called SoLoMo principle: using the prevalence and potential of social media (Social), traditional (local) business (Location) promotes itself through global internet user mobilization (Mobile).

The project is based on a popular method of conducting advertising campaigns — advertisers offering discounts or bonuses - so-called coupons, to their customers. At the moment, promotion of coupons is carried out through aggregator sites, where thousands of similar offers are gathered, which reduces the effectiveness of a single ad. In addition, the advertiser pays an excessively high commission for the placement of their offers, and often such a scheme of attracting customers is not economically feasible.

Blockchain technology will enable avoiding unnecessary intermediaries and make all operations inside the system transparent and virtually free. Within the NAU ecosystem, the rewards for users who have attracted customers who then take advantage of offers available on the service, will be paid in NAU tokens. Also with the help of the tokens, retailers will be able to pay for various additional marketing tools.

A general scheme for NAU’s operation is as follows:

1. The advertiser places a coupon – a proposal for a discount, bonus or gift. 2. A NAU user John invites Kate to the system. 3. Kate buys something from a seller and receives a discount, bonus or gift. 4. John receives 95% of the seller's fee for the referral (at least 1 token), the

NAU platform receives 5% as a commission.

For each subsequent use of the coupons by the invited user (Kate), John will receive 95% of the reward set by the coupon seller.

Thus, NAU intends to enable the market for such advertising to be more effective for all participants.

For the advertiser:

● Paying only for advertising that actually attracted the customer. There is no need to pay for promotion services with an unknown conversion rate. Payment for a placed digital coupon is charged after it is used by the client, which gives 100% conversion.

● Targeting. There is no need to distribute advertising in traditional ways (TV, radio, etc.), where the target audience occupies a very small share. With NAU, clients find offers they are interested in.

● The ability to accurately estimate the cost of attracting customers. ● The absence of intermediaries, and hence the reduction of costs. ● You can join the system even with a minimum budget, which is attractive for

SME.

For the customer:

● There is no need to look through hundreds of offers. NAU involves the use of geolocation of the user, as a result of which offers from advertisers are displayed in accordance with distance to them, allowing the client to choose the most relevant variant for them at the moment.

● No annoying spam from coupon site-aggregators. ● Referral system on NAU. By inviting users to the system, clients can receive

tokens from advertisers when the invited users use coupons.

For marketing agencies:

● Agencies can manage an advertiser's campaign if they don't want to do it themselves (using API).

4. Engineering features of the project

The project presents open code components on github.com with two repositories: Web and mobile, that have not been audited by third-party organizations.

The NAU blockchain will be built on the basis of multichain technology. Initially, all the network nodes will be under the control of the creators of the project, but anyone can connect to the network and participate in the confirmation of operations (block mining.) However, there are no rewards for mining, so there is a strong chance that nobody would want to support the NAU blockchain for free.

On the other hand, this architecture will allow instant and free payment transactions. It is stated that for instant execution of operations, an algorithm was developed that first immediately saves transactions, which are fixed by the terminal, and then records them on blockchain. Also, browsing the NAU blockchain will be possible through a special explorer site, and anyone interested can create a node with a copy of NAU blockchain.

The founders of the project state that once the load on the blockchain will make supporting it difficult and costly by themselves, the project will start implementing a mining program on the devices of advertisers — this will be one of the conditions of connection to the platform. The approximate time-frame for the introduction of this requirement is summer-autumn 2018.

During the token sale, eNAU tokens based on the ERC20 protocol will be available to users. Once the project is launched in its beta version, these tokens will be available for exchange for NAU tokens issued on the multichain at the rate of 1:1. The reverse exchange will cost the user a 5% commission however, because the authors want to stimulate the use of tokens for utility purposes. The authors cite the following reason for this division. It is convenient and familiar for users to sell tokens based on ERC20, but using the token system on the Ethereum platform means having a commission for each operation, and this does not allow for the optimal operation of the project.

The structure of the NAU platform is given on the following diagram:

The project technology stack is as follows:

● Mobile: Apache Cordova, Angular JS, Ionic ● Core: Java EE, Spring ● Web: PHP7 + Laravel 5.4 ● Core DB: PostgreSQL9 ● Blockchain: MultiChain, ANSI C ● Unix Daemon / Blockchain Core: C, Jam

5. Market Review

The market for mobile (digital) coupons is steadily growing. The reasons for this growth are mobilization of the population and the increase in the number of smartphone users. With the general trend of transition to digital content, this development is quite logical.

In the white paper, the authors cite statistics on the number of users of mobile coupons and the size of consumption.

Statistics for this forecast could not be found in the open access, but the given figures are confirmed in a press release on juniperresearch.com. Here the figure of 560m users in 2014 and the forecast figure of 1.05B users by 2019 were reflected.

It was not possible to confirm this statistic either. Apparently, these figures are reflected in data from statista.com, a brief description of which confirms the extreme values of 16 billion in 2014 and a projected 31 billion by 2019.

In addition, the costs associated with digital advertising are rising. The authors of the project offer a solution to increase conversion and reduce costs, which in theory looks very attractive.

Digital advertising spending worldwide from 2015 to 2020 (in billion U.S. dollars) (statista.com).

The project’s authors have identified 185.6 million people as potential users. These are smartphone users in the first five countries (Russia, Germany, Philippines, Colombia and Ukraine).

The data are obviously taken from the statistics given on Wikipedia, which in turn cites the well-known portal Newzoo.

Of course, this is quite an exaggerated landmark, because not all owners of smartphones use coupons. The authors themselves mention 60% of smartphone users using mobile coupons. Thus, the aforementioned goal is reduced to about 110 million people, which is still a huge market.

According to the founders, at the moment the project has already received more than 1000 documented consents of sellers to connect to the platform, which is an excellent indicator.

6. Competitors and competitive advantages of the Project

The key competitors for the NAU project are the existing coupon services.

The authors of the project cite three problems with such sites, with which they promise to address:

● For buyers — too many sites, a lot of offers, no motivation to share information.

● For sellers — the cost of placing coupons is high, it is impossible to determine the marginal cost of attracting customers.

● For agents – there is no possibility of "wedge" in the marketing process.

However, aggregators have the following advantages:

● A familiar and accessible interface. No need to install applications; the site can be used even without a smartphone.

● An extensive database of sellers. While the NAU ecosystem is only starting to recruit members, aggregators are already spreading offers from many sellers.

● No location or time referencing. The possibility to purchase a coupon from a seller, no matter how remotely they are located; purchasing a coupon for any services in the future. NAU offers to use the coupons "here and now" – the nearest ones to the current location, active at the moment.

The five countries in the first wave have the following strong players: Groupon (everywhere except the Philippines); In Russia – KupiKupon, Boombate, Kupinator; In Germany – MyDealZ, Gutscheinsammler; In Ukraine – Pokupon, Superdeal; in Colombia – Cuponatic, Que Buena Compra, in the Philippines – Suredeal, iVoucherCodes.

According to our estimation, it will be quite difficult for NAU to drive large aggregators out of the market.

NAU is a new, unknown player. The barrier for buyers — becoming a member of the system is possible only by personal invitation of a friend, which is an additional step on the way to registration – this could reduce the conversion. According to the creators, this mechanism is intentionally created and is intended to give the impression of belonging to a "closed community".

7. Risks

The key risk for the project, in our opinion, is the need of a large number of participants for successful functioning. In the event of a small number of offers from sellers, new users may be disappointed in the choice of available offers and leave the service. At the same time, companies will be reluctant to connect to NAU if the number of active users grows at a slow rate. As a result, the project will require a large marketing budget to increase recognition for its brand. This problem, in our opinion, may be aggravated by the plans of the founders to launch the startup in several countries at the same time - to establish stable work in each, will be much more difficult than to do this gradually.

In addition, the mechanism of operation of the project does not involve rewards for mining, as a result of which ordinary users will not have an incentive to connect their computers to the network, and there is a high probability of the relative centralization of the network among a small number of nodes. According to the creators, as the project develops one of the conditions for participation in the platform for sellers will be to maintain a full node, which would reduce the risks of centralization on the blockchain. However, the community might react negatively because such a scheme contradicts the ideology of decentralization itself.

The project could also face all the standard problems related to the regulation of cryptocurrency, since NAU tokens will become a payment tool in the system. The possibility of paying with NAU tokens, in our view, is one of the key factors in the demand for NAU tokens, so one cannot underestimate these risks; failure in this direction will definitely prevent the increase of the token price.

8. Team

Core Team

Yaroslav Shakula (LinkedIn) – Founder, CEO. Experience in the field of marketing and product management since 2001. Besides NAU, he is the founder of Partnerio UA. He is responsible for marketing at EtherMail and Blockchain Programmatic Corporation (BPC).

Egor Bruskin (LinkedIn) – Co-Founder. Founder of 8bit Group (2011) and Leadbit Group (2014) which are dealing with promotion of products.

Max Gavriuk (LinkedIn) – CTO. Since 2002, he has been developing software. Currently working at Omnisynapse.

Olga Romanova (LinkedIn) – Head of international sales. Olga held senior positions in the company-aggregator of discount coupons Groupon Russia, online store KupiVIP.ru and other companies.

The team looks quite experienced and ready for the project promotion.

The authors mention other employees: “The team also features 9 in-house developers who are working full-time on NAU platform, mobile application and other core modules of NAU ecosystem. Moreover, we’ve onboarded a bunch of avid professionals in marketing, client success service, retailers management and more.” So, according to the CEO of the project, Yaroslav Shakula, currently, the team includes 48 salespersons in 5 countries and 5 heads of regional offices.

Advisors

Ashit Joshi (LinkedIn) – Business Development Adviser. Experience in solving IT problems since 2004. One of the founders of the major student platform Chegg Inc.

Tzvi Shishler (LinkedIn) – Advisor on international marketing. Experience in international marketing since 2006. At the moment, employment in the Tzedekk project is specified, but no information on this company was found (it is said to be a crypto media platform.)

Marc Kenigsberg (LinkedIn) – Advisor on tokenomics and data. Founder of BitcoinChaser.com. Work experience is concentrated in the sphere of marketing.

The actual experience of advisors in stated directions is difficult to estimate.

20m tokens will be reserved for expert advisors for 12 months.

In addition, tokens to the amount of 24% of the crowdsale will be issued and frozen for 12 months; starting from the 13th month they will be defrosted in 10m installments and distributed to the team as rewards.

At the moment the company has offices in Germany, the Philippines, Colombia, Russia and Ukraine.

9. Project development strategy and Roadmap

The project development plan is based on the following stages:

1. Establishment of local offices in 5 main countries to work with business and marketing

2. Concluding agreements with local retailers in key regions to fill the ecosystem with special offers in all available categories

3. Launch of the platform 4. Adding the possibility of using NAU tokens as a payment tool

In parallel with the implementation of project functionality, sale of tokens will be conducted.

The diagram below shows a more detailed schedule for project development with all the key planned events:

10. Marketing strategy

The potential customers of NAU are as follows:

● Users of mobile applications currently using the services of discount coupon aggregator sites.

● SMEs placing special offers through the application and pay only for the customers who have used the service.

● Agents who are able to conduct marketing management on behalf of their customers.

Before presenting the application to users, NAU wants to gather enough retailers for users to have access to various special offers in their own regions. The authors state that in the key cities, local offices will be opened - the purpose of which is to conclude agreements and contracts with:

● Retailers to fill the ecosystem with a sufficient number of special offers; ● «Local performance and BTL agencies, as well as individual digital marketing

professionals» to create a network of certified agents. In the future NAU plans to fully outsource retailers management to certified agents. Also, agents who have joined the project can bring their current clients to the NAU platform.

● «local celebrities and social media influencers» to attract new users.

At the moment the project has little activity on social media. 470+ participants in Telegram chat, 100+ Twitter followers as opposed to 15k subscribers on Facebook, where there is virtually no activity and the majority of posts are gaining around 10 likes on average. This activity on Facebook leads to the suspicion that the audience could largely consist of bots. Such solutions for a marketing strategy are common, and when properly used can create a favorable background for genuine subscribers on social media, but they should not be abused. The most active response to the project is available on its page on Bitcointalk.

Publications and reviews of the project on various sources intended to create an atmosphere of trust in the project are an important part of the marketing strategy for NAU. The Events and Media block of the main project site lists all the main sources where the project and ICO information is published. There are about forty such sources given, which indicates that the authors of the project have paid serious attention to the promotion of information about the project within the community. It is also worth noting that most user comments on the project are positive.

11. Economy of the Project

The basis of the economic model of the project is as follows:

1. Advertisers place advertising about the discount on the service or the goods which can be redeemed through the application in the NAU system

2. User A invites user B to the system 3. User B uses the promotional offer and redeems it through the app. The

advertising fee is distributed between the user A and NAU in the proportion of 95%/5%.

Marketing agencies can engage in advertising and marketing campaigns. The NAU model allows one to accurately assess the effectiveness of such agencies and build a relationship between them and their customers on the basis of objective indicators. At the moment, the minimum payment for the redemption of a promotional offer is 1 NAU. If the project is successful and the cost of NAU is increased, the pricing policy will have to be revised, otherwise a high cost of advertising will become an obstacle for further development of the system, which is why the authors have provided 4 decimal places.

The project's creators provide data on the project's costs, according to which if it reaches the $5m soft cap, the project will have enough financing for marketing, development and other expenses through 2019. The project's biggest expenses are retailer and customer acquisition, global marketing (40%), new market launch (30%), as well as infrastructure, legal, IT and HR costs for new local offices (15%). The project site presents a file with the costs and projected income of NAU, according to which the project will show its first net profit in October 2019. Here we would like to note that in order to achieve such figures NAU tokens will have to demonstrate stable growth by 10 by December 2019. Taking into account that the project does not make specific statements on placing tokens on leading exchanges, that demand for the tokens is dictated primarily by retailers and since the start of accepting NAU tokens as payment is planned only for the spring of 2018, such forecasts seem to us quite inflated. It is also assumed that the growth in the number of users of the project will begin with 290k people in December 2017 and then in a few months will become stable with a monthly +100k people (with an anomalous leap to 130K in November 2018). On the one hand, such predictions seem too optimistic in the early stages. On the other hand, with the successful development of the project and its recognition by users, predictions of the steady growth of +100k people monthly may be too pessimistic, because a word-of-mouth effect is possible, and because users have a significant motivation to share the app and invite friends and acquaintances to the ecosystem.

12. Token investment attractiveness

In order to assess the prospects of investing in NAU, it is necessary to evaluate the main factors that support demand for the tokens. A direct need for the tokens in the first stages is really only for sellers who have to pay with them for services fulfilled through the application. It can be concluded that the main source of demand for the tokens indirectly depends on the number of users in the ecosystem; the more users there are, the more special offers they will redeem through the NAU platform and, consequently, the greater the retailers' need for NAU tokens. Thus, the price of NAU tokens in our view will have a significant correlation with number of users of the application. One question remains: will the number of users grow? We believe that it will, but at the moment it is hard to predict how fast this will happen and whether this growth will be enough to keep the project operating and developing further – everything will depend on the skills required from the team and their efforts. It is important to monitor how the community responds to the ability to pay with NAU tokens. If users and retailers accept this option, the token value will steadily start to rise, as a new demand factor for NAU tokens will follow. However, it is not possible to count on this as long as it is unclear how legislation will develop in terms of the regulation of cryptocurrency turnover. Separately, we would like to mention the opaque mechanism of selling eNAU tokens in additional rounds, which are not strictly defined - both in terms of the number of such rounds and the selling price of tokens. Such ambiguity in the project's intentions for fund-raising may confuse some investors in view of the large number of tokens allocated to these purposes, as well as the fact that putting them in circulation may put significant pressure on the token rate. Based on all the given reasoning we conclude that the project has a moderate potential. The main factor in the demand for NAU is the number of users of the project, so the increase in the value of NAU and its stable growth will be possible when reaching a critical mass of users. As a conclusion, we recommend buying NAU tokens to investors who are counting on long-term investments and accept the specified risks. Investors who believe in the success of this project should pay additional attention to the period when the project commences the implemententation of payments with NAU tokens. The reaction of users and retailers to such a method of mutual settlements, taking into account all the existing legal risks, will be the factor most affecting any increase in token value.

The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication. Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud. We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.