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ICOrating
SKYFCHAIN Rating Review (https://www.skyfchain.io)
Pre-ICO dates (01.03.2018 — 31.03.2018)
Web: icorating.com
Email: [email protected]
Twitter: @IcoRating
1. Ratings 3
2. General information about the Project and ICO 4
3. Description of the services and scope of the project 7
4. Market Review 9 4.1 Market analysis 9 4.2 Competitive analysis 10
5. Team and stakeholders 11
6. Token analysis 14
7. Analysis of factors affecting the future price of the token 16
8. Investment risk analysis 18
1. Ratings
We assign the SKYFchain project a “Stable+” rating. The SKYFchain project is aimed at the growing market for unmanned cargo vehicles, offering services necessary for many sectors of the economy. The potential for platform users to reduce costs in this area makes the project promising and its services likely to be in demand. SKYFchain has a strong team with the necessary technical knowledge and experience in creating projects based on blockchain. The management also has experience in attracting investment for the development of drones. Currently, the project is gaining interest from larger companies, which could help conclude long-term contracts and therefore garner further attention from the community. There are no direct competitors; the project has conducted positive tests with drones, agreements have been concluded with companies for test flights and the experimental implementation of unmanned aerial vehicles in business operations. Along with these positives we draw the attention of investors to a number of factors that could have a negative impact on the forthcoming ICO and the future development of the project:
● Lack of a financial model ● Lack of a global marketing strategy
In addition, the project has a market risk due to a possible excess of token supply in the future. These factors prevent us assigning the SKYFchain project a higher rating.
2. General information about the Project and ICO
SKYFchain is an Ethereum blockchain-based platform for the management, control, development and implementation of unmanned aerial cargo vehicles.
At the first stage, the platform will be centralized. In December 2017, the first demonstration flight for a project drone took place; further implementations are planned in the near future.
SKYFchain is aimed at solving a number of tasks such as:
● Reducing the cost of logistics services in various sectors of the economy. ● Extending the geographical scope of their application.
The SKYFchain platform is the product of a project for drone development, SKYF drone.
Total emission of Tokens – 1,200,000,000
Smart contract platform: Ethereum blockchain
Contract type: ERC20
Token: SKYFT
Accepted payment: ETH, BTC
Price: 1 SKYFT token = $0.065
Pre-ICO:
Start date: March 1st, 2018.
End date: March 31st, 2018.
Tokens for sale: 51,300,000 SKYFT
Soft cap: $1,000,000
Hard cap: $2,000,000
Minimum purchase amount: 3000 SKYFT
Bonus program: 40% discount on SKYFT for white list participants
SKYFT tokens unsold at the pre-ICO will be carried over to the ICO.
ICO:
Start date: May 2018.
End date: The exact dates of the ICO will be announced later.
Tokens to sell: 528,000,000 SKYFT
Soft cap: $5,000,000
Hard cap: $30,000,000
Accepted payment: ETH, BTC
Discounts are provided for participants of the main ICO:
There is no additional emission.
All unsold tokens will be burned after the ICO.
The allocation of tokens is as follows:
Tokens assigned to the team will be frozen for 1 year. Funds raised during the crowdsale are planned to be distributed as follows:
● 45% - Research and development ● 25% - Marketing and platform development ● 24% - Operations, business and corporate development ● 6% - Legal and Administrative
In the event of achieving only the soft cap - $5m, development of the project will be postponed. Work will focus on the development of the MVP to attract additional funding. If $15m is raised (the medium scenario), there will be an expansion of the partner network among market participants, as well as the organization of seminars and PR for the SYFchain project.
3. Description of the services and scope of the project
The SKYFchain Operating Platform (SKYFchain OP) is a B2R (business-to-robots) platform built on blockchain which provides industrial freight SKYF drones for solving problems in the fields of logistics and agriculture.
Currently, two modifications of SKYF drones which have been tested are being presented:
● SKYF CARGO – a drone with carrying capacity of 150kg and a flight range of up to 350km. Its main application is the delivery of goods, equipment, spare parts, etc.
● SKYF MARINE – a drone with corrosion protection. It can be used for the following purposes:
○ Delivery of food, rescue and medical equipment to hard-to-reach places (for example natural disaster sites)
○ Delivery of medium-sized cargo (for example, mail, spare parts, etc.) for ships, oil platforms, marine logistics centers
In addition to trucking, the SKYF drone can be used in agriculture which will enable:
● Taking aerial photographs to detect crop disease ● Spray pesticides, fertilizers and desiccants and extinguishing fires.
The main platform participant categories and their relationship with SKYFchain are given below:
● Developers and producers – receipt of insurance, financing and customers via SKYFchain
● Licensees - gain customers as well as unique plans for drones from developers and manufacturers
● Technical services – provision of services to platform participants ● Operators and end-users – use of drones, conclusion and execution of smart
contracts ● Authorities - authorize and control available routes for drones within their
territories ● Analysts - provide analysis and scoring for various models of drones ● Financial markets - provide financing to participants in the international market
for the SKYFchain network based on scoring from analysts; can also use a
remote lock function in case of a payment violation for a drone or an accompanying service.
According to the white paper, negotiations are under way with a number of large companies in the agricultural and logistics sectors to use SKYF drones and preparations for test flights are being conducted with NGK Slavneft and Pony Express.
The SKYFchain OP platform is aimed at providing an alternative to existing expensive logistics such as helicopters and ships. According to the white paper, the difference in the cost of delivery services between a helicopter and a SKYF drone can be up to 10 times.
In our opinion, the SKYFchain OP platform could become popular in the specified target industries for both large corporate clients and small companies since the offered product differs favorably in price from other technical solutions.
4. Market Review
4.1 Market analysis
In recent years, the market for unmanned aerial vehicles shows significant growth. According to "The drones report" from BI Intelligence, revenue from sales of drones will be up to $12bln by 2021. This growth is promoted by the increase in price competition and the development of technologies.
A PWC report identifies eight different industries whose products and services have a high potential for replacing manned solutions in the very near future. Total cost for operations and services in these industries was $127 bln as of 2015 with the most promising sectors bing infrastructure ($45.2 bln), agriculture ($32.4 bln), transport ($13 bln) and security ($10.5 bln):
Reducing the cost of production of unmanned aerial vehicles and the development of technology in this area will enable increase in drone use in various industries, a key factor in the growth of this market segment. In our opinion, this could contribute to the development of the SKYFchain OP platform in this new segment - the market for freight drones.
4.2 Competitive analysis Currently, drones are increasingly used in various industries - by journalists for creating reports, Apellix has developed a drone capable of producing paintings, consumers buy drones for entertainment, for example selfie-drones, etc. Among well-known companies that deliver goods with the help of drones is Amazon, which provides the Amazon Prime Air service. With this service, residents of areas where this type of delivery is available can receive goods within 30 minutes of ordering under the following conditions:
● The client is within a radius of 16 km from an Amazon delivery center. ● Weight of the package must be no more than 2.25 kg. ● The size of the package is limited by the size of the drone’s cargo
compartment. ● Delivery by drones is available during daylight hours with low wind, good
visibility and in the absence of precipitation. DPD, which provides cargo delivery services, has been developing solutions for the delivery of parcels using drones since 2014. Currently, testing of drones capable of delivering weights of up to 4 kg at a distance of up to 25 km is under way. In the case of SKYFchain, the scale of cargo delivery is much higher - the average load capacity of the drone described in the documentation is up to 150 kg, and range of flight is up to 350 km. This will enable using the drone for the delivery of goods in a large variety of industries. We can identify Natilus as a potential competitor for SKYFchain in the field of cargo delivery; Natilus has developed an amphibian drone capable of delivering cargo weighing about 90 tons with a flight time of up to 30 hours but the company's website has no information on the practical application of this product, just its technical characteristics. In our opinion, factors such as the absence of direct competitors on blockchain in conjunction with the growth in the market for unmanned aerial vehicles will enable SKYFchain to occupy a niche in logistics and agriculture.
5. Team and stakeholders
The core team is represented by 14 specialists; 4 people are involved as advisors. Key positions are occupied by: ALEXANDER TIMOFEEV (Linkedin) – CEO Founder and CEO of Microbor-Nanotech, founder and managing partner of InvestKinoProject, general director of the Non-State Pension Fund "Innovation Fund LP" since 2010, has experience in attracting investment for high-tech projects in Russia and worldwide. Education:
● Moscow Institute of Physics and Technology ● Latvian State University: Physics
MAXIM KHABUR (Linkedin) – CMO
Has worked for the SKYFchain team since July 2017. Marketing director. Also works as marketing director at iGlass Technology since 2015.
Education:
● Hult International Business School ● Plekhanov Economic Academy ● Military Institute of Foreign Languages
VALERY KRIVENKO (Linkedin) – IR Has worked with the SKYFchain team since November 2017. Managing Partner of Bright Capital; Head of High Tech Investments, ONEXIM Group; general partner of FPI Partners since 2011, dealing with investments in the food industry in the US and Europe. Education:
● London Business School
● MGIMO Moscow
NICKOLAY KOVSHOV (Linkedin) – Lead IT developer The leading developer for SKYFchain since 2015. Leading developer and leader of R&D groups in a number of software start-ups involved in large data analytics. Has a degree in Computer Science from Moscow Institute of Physics and Technology, has experience of leading software development for WWPASS Corporation, the invention of a two-factor distributed security solution and 24x7 storage system, storage API. Education:
● Moscow Institute of Physics and Technology (State University) (MIPT)
ALEXANDER MALIKOV (Linkedin) – Software Engineer. Has worked in the SKYFchain team since the beginning of 2017; has developed a control system for fully autonomous unmanned aerial vehicles, developed embedded software for power systems. Education:
● Pskov State Polytechnic Institute
KATYA BUBLIK (Linkedin) – Head of Digital Marketing Digital marketing specialist with 5 years of experience in digital advertising, email marketing, mobile marketing and analytics in the US and Russia. Education:
● Hult International Business School Master of International Marketing ● Plekhanov Russian University of Economics
Advisors: Alexey Arkhipov (Linkedin) – Currently heads technical development for the first Russian DLT-platform, Masterchain.
Michael Terpin (Linkedin) – CEO of Transform Group, acts as an advisor to the Consumer Electronics Show, where he helps to program blockchain content, including for CES Asia; has led the launch of more than 150 blockchain companies and funds such as Aeternity, Augur, Bancor, Ethereum, Factom, Gnosis, Golem Network, Lisk, MaidSafe, Qtum and Tether. Currently, he heads the investment ICO committee of Alphabit Fund, a digital fund of $300 million registered in the Caymans, and advises numerous companies and blockchain funds. Ivanov Alexander (Linkedin ) – Expert in global business development, EPC Project Manager for Oil and Gas for SAKHALIN-1,2,3. Igor Karavaev (Linkedin) - Executive director of the Skolkovo Foundation, a leading Russian start-up business incubator; Director for Strategy and Business Development of some of the largest international corporations. In total, the project team has more than 30 engineers and developers. The team members have had only a short period of working together but there are managers who have the necessary technical knowledge, as well as experience in creating projects based on blockchain. The project for the development of SKYF drones attracted $5m of investment at an early stage, which indirectly confirms the founders’ reputation and the level of confidence in them. This will contribute to the successful development of SKYFchain's business. We think that the team has a sufficient number of specialists to solve the tasks.
6. Token analysis
The project has its own page on GitHub but there are no public repositories. The documentation states that SKYFT tokens will be issued in accordance with the ERC20 standard. The SKYFT token is a utility token designed to pay for all transactions on SKYFchain. The project requires a private blockchain to simplify the development and support of the platform. It is also necessary for independence of performance from the Ethereum public network. In this regard, SKYFT tokens will be programmed on two platforms - Ethereum and another to be chosen by the project after the ICO (private Ethereum-fork, special SKYF platform built on Exonum libraries, R3 Corda blockchain). This solution minimizes the time of transactions on the platform and also enables the storage of various data from platform participants related to its use:
● Developers and producers: ○ Device ID data and its digital specification ○ Flight tests and reports ○ Certificates and documentation for each country or region
● Operators and end-users: ○ Development and approval of missions and routes ○ Reports on missions and smart contracts ○ Order and payment data ○ Incident reports ○ Ratings for devices, operators and end-users
● Licensees: ○ Licenses for assembly, software and operations ○ Device ID data and its digital specification ○ Flight tests and reports
● Technical services: ○ Maintenance data from the device, reports on repair and replacement
of units ○ Incident data from the device ○ Software versions and software update data
● Authorities: ○ Device certification ○ Security control ○ Approval and monitoring of mission reports ○ Regulation of no-fly zones
● Analysts: ○ Analysis of robo-assets ○ Ratings/scoring for FinTech ○ Recommendations for market participants
● Financial markets: ○ Asset information for each device ○ Reports on transactions and encumbrances ○ Booking a device for a financial transaction ○ Blocking of a specific device or group if necessary
This and other data related to participant interaction and the platform will be reflected in SKYFchain and available for verification. All operations on SKYFchain will be implemented in SKYFT tokens. Storage of tokens will be provided on the Ethereum blockchain as they are scheduled to be listed on exchanges. For this a mechanism for synchronizing SKYFT tokens between the Ethereum blockchain and the private blockchain (SKYFTchain) is implemented. Synchronization will be done using payment channels.
Initially, SKYFchain will be managed by an administrator who sets the rules for its management, which makes the platform centralized. The platform will become decentralized as managerial roles on the platform are distributed among leasing and insurance companies, logistics providers and their customers, government agencies and market analysts, manufacturers and service providers. Further network scaling will be provided with the help of super-nodes (up to 300 nodes during the first three years of operation), as well as nodes owned by ICO investors. Holders of super-nodes will receive 50% of transaction fees. Since the SKYFchain project is aimed at providing worldwide services, its participants need transparent, fast and reliable payment instruments which in our opinion justifies the use of tokens on the platform.
7. Analysis of factors affecting the future price of the token
The investment attractiveness of SKYFT tokens will be influenced by a number of factors:
● Token holders will receive 25% of commission fees paid on the platform. ● Holders of super-nodes will receive 50% of commissions from transactions.
There will be two main types of transaction on the platform:
● Operational transactions - about $0.1 per transaction. This will be charged for one data recording instance by drones.
● Fintech transactions - more expensive and less common transactions; operations associated with leasing and insurance. Cost of a transaction will be approximately $1000.
By the end of 2022 the project is planning to cover 0.47% of the market by attracting bigger customers, joining other producers and drone owners to the SKYFchain operating platform and creating a franchise model in AsiaPac. It should be noted that growth in the number of platform users will increase turnover in fiat currency. Since calculations on the system will be performed using SKYFT tokens, with an increase in SKYFT token price in fiat, a smaller number of tokens will be required for payment for services within the platform. Consequently, a change in the number of users without increasing prices for services in fiat will not have such a significant impact on the price of the token in the long term. The project is planning to create two funds to maintain liquidity at a sufficient level:
● A Network Development Fund (NDF), which will be created using 15% of issued SKYFT tokens. The fund will be used to support super-nodes for the first three years (50% of NDF will be spent in the first year, 35% in the second year and 15% in the third year).
● Community Development Fund (CDF). Initially, this will include 10% of issued SKYFT tokens. The fund is designed to stimulate the growth of the partner network and the developer community. Active use of CDF funds will begin in 2021 after the inclusion of third-party drones in the SKYFchain system.
The project is planning to purchase SKYFT tokens from the market within the first 3-5 years, spending 20% of revenue from sales of the first 1000 SKYF unmanned aerial vehicles for this purpose. The amount of revenue for these purposes is projected by the founders to be $50-60m. Bought-back tokens will be listed in the Community Development Fund and used to reward partners and developers of SKYFchain. Detailed information on token buy-back or how partners and other participants in the system will be rewarded from the fund is not available. This factor will have a positive impact on the price in the short term but due to the fact that the number of tokens in the system will remain unchanged and with a high probability will be sold back to the market by rewarded participants, the positive influence in the long run would decline. Full development of the project is planned during 2018-2025, whilst achievement of all announced plans will be possible if the hard cap is reached during the ICO period. If the project collects $5-15m, all the developments and achievements for the goals presented in the roadmap will be shifted several years in advance. This fact should also be taken into account by potential investors. Since SKYF has already attracted investment of $5m in the early stages, if early investors want to exit the project, this could also have an impact on the token price.
8. Investment risk analysis
We have identified a number of risks for the SKYFchain project: SKYFchain offers a technical project, thus risks of a technological nature come to the fore: It is difficult to predict whether the team will succeed in achieving its goals. The platform services are intended for the use of legal entities. Use of tokens by legal entities can be difficult and sometimes impossible, due to current difficulties in regulating the crypto market in different countries. The documentation says nothing about the future marketing of the project itself or its product, for which 25% of the funds are allocated. Economic risk is also present, as SKYFchain does not disclose the main financial indicators or forecasts for them. 44% of the emission will be available for purchase during the ICO; the remaining 56% will be allocated to various purposes including 25% stored in funds and 20% frozen for the team. Thus there is a market risk due to the possible supply overhang of tokens under control of the project in the future. Due to the fact that SKYFT token holders will be paid 25% of commissions received for transactions on the platform, tokens retain legal risks related to securities. The founders have submitted an application for non-recognition of tokens as securities to the SEC for consideration. 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.