14 March 2018

Switcheo ICO Review

Summary

  • Project Name: Switcheo
  • Token Symbol: SWH
  • Website: https://switcheo.network/
  • Whitepaper: https://switcheo.network/switcheo_whitepaper_v0.6.pdf
  • Hard Cap: 8,700,000 USD
  • Conversion Rate: 1 SWH = $0.016
  • Bonus Structure Public Sale: N.A
  • Bonus Structure Pvt Sale: 50% ( bonus locked for one month post ICO)
  • Whitelist:  Whitelist started since 13th Feb 2018 and now it is closed, it is now a wait list.
  • NEP-5 Token : Yes
  • Timeline: Crowdsale starts on 16th Mar 2018, 8PM (SST) SST = Singapore Standard Time (UTC+8)
  • Token Distribution Date: The SWH token will be listed on the Switcheo Exchange after 16th March 2018 for trading purpose. SWH tokens will be tradable no less than 3 days i.e. 19th March 2018 after the Public Sale of tokens

Video Summary (video is 06:05 long):

Project Overview

What Does the Company/project Do?

Switcheo is a Decentralized Exchange to be built on top of multiple popular blockchains to facilitate the exchange of digital assets. It will first be launched on the NEO blockchain and will include digital assets such as NEP-5 tokens (e.g. RPX, QLC), future NEP-X tokens and NEO’s system assets such as NEO and GAS. Trade settlements are done peer to peer via interaction with our smart contract(s). Switcheo aims to achieve a network of DEX with cross-chain swapping capabilities between multiple popular chains such as QTUM (QRC20) / Ethereum (ERC20) with more research being done for upcoming chains like Stellar.

With the increasing popularity for blockchain technologies fuelling the price of cryptocurrencies, a majority of these trades are done via traditional centralized exchanges. Centralized exchanges may be split amongst two different genres. Those that accept fiat currencies (government backed currencies), and those that do not. Switcheo will initially not accept fiat transfers and will first work towards a multi chain decentralized cryptocurrency exchange​ platform where users may perform trades of virtual tokens and assets trustlessly (i.e. without the need to trust a centralized third party).

Problems With Centralized Exchanges
  1. Security

    An immediate consideration when using a centralized exchange is the security of funds when users send assets over for trading. As funds are stored in a centralized location, users are prone to a single point of failure, should the exchange servers be breached, or the exchange’s private keys lost. These failures are completely out of the control of the individual user, regardless of how secure their passwords are, and they have to trust that the centralized exchange have done what is necessary to secure their funds.

    Decentralized exchanges solve this problem by letting the blockchain and the user handle the security of funds from start to end. A DEX is therefore as secure as it’s smart contract, and most existing DEXs have been running for a long time with no core breaches (e.g. EtherDelta).

  2. Control of Funds

    When users deposit their funds into a centralized exchange, their funds are under the control of the exchange. The exchange may be able to withhold funds from users or remove funds from user’s accounts at any time. In general, a user has to trust that a centralized exchange will always act in good faith for the user. This is in contrast to the spirit of decentralization and trustlessness.

  3. Ease of Transfer

    Users may also be unable to withdraw assets in small numbers from centralized exchanges, or it may not be viable to withdraw often due to high withdrawal fees. This hurts the user’s security even further as they are at the mercy of the centralized exchange while their funds remain there.

    As all exchange interactions for Switcheo is done on a smart contract (i.e. code on the blockchain), users can buy or sell tokens directly from their wallet, without additional transfers. Users can also withdraw any amount of tokens from their balance at any time, and this is guaranteed by the code of the smart contract.

  4. Immediate Listing

    A big issue with the acquisition of tokens of an early stage blockchain startup is finding exchanges that list the wanted tokens. On the other hand, users who have purchased tokens during an Initial Coin Offering (ICO) will have to wait for the token to be listed on an exchange before being able to sell it. This leaves many users stuck with the token even though they may no longer want it.

    With the increasing popularity of projects developed on the NEO Blockchain, Switcheo will strategically start trading NEP-5 Token contracts for the NEO Blockchain first, before moving on to QRC20 Tokens (QTUM). Using the dynamic call functionality of the NEO blockchain, users will be able to list and buy tokens the moment they are available for transfer on the blockchain.

  5. Exchange Fees

    While centralized exchanges like Binance and Gate.io charge exorbitant rates for withdrawals for small amounts of cryptocurrency, there will be no withdrawal fee from Switcheo’s smart contract

Problems With Existing Decentralized Exchanges

While the advantages of DEXs are clear security & control of funds, immediate token listing, lower fees, etc. at Switcheo, our true priority is to overcome the shortfalls of existing DEXs.

  1. User Experience

    Order mistakes, wrong trades and mis-clicks are the hallmarks of DEXs currently. While a truly decentralized exchange will inherently have different performance characteristics from a centralized exchange, we believe this problem is in fact solvable with a well thought out UI & UX. Switcheo’s DEX allows for partial filling ​of offers, auto-retrying​ of failed orders, and order batching​ within a single transaction. The client can therefore remain in control while within the constraints of the smart control, providing the experience of a traditional exchange without delegating any key component (such as order matching) to an off-chain service where unseen shenanigans may happen, thus compromising the integrity of the entire exchange.

  2. Smart Contract Security

    As the security of a DEX is as good as the security of the smart contract, we hope to run an aggressive bug bounty campaign​ over a minimum of 2 weeks on top of external audits, to minimize the chance of any critical bugs in our smart contract. More details on this will be announced soon.

  3. KYC / AML Requirements

    Many governments have KYC/AML laws and requirements, in addition to regulations for the trading of securities. We aim to implement D-KYC whitelists on our exchange so that users can trade on our exchange in compliance with the all relevant legislations.

  4. Liquidity

    The funds that Switcheo raises during our ICO will be funneled primarily into marketing campaigns and partnerships. We hope to overcome the problem of low liquidity / exchange volume through strong credibility, market presence and a top-notch ease-of-use, such that using Switcheo is preferred even to popular centralized exchanges.

How Advanced Is the Project?

  • Switcheo MVP Demo- Dec 2017
    Switcheo Wins CoZ dApp competition #1
  • Switcheo Exchange Test – Jan 2018
    TestNet launch of Switcheo Exchange
  • Switcheo Exchange Launch - March 2018
    MainNet launch of Switcheo Exchange
  • Switcheo QRC20 DEX – Q2 2018
    Launch of QRC20 token trading
  • Switcheo ERC20 DEX – Q3 2018
    Launch of ERC20 tokens trading
  • Cross-chain capabilities – Q4 2018
  • Launch of cross – chain trading (Cross-swap feature using SWH and Wanchain)
  • Launch of trading for top 5 chains -2019

Use and Distribution of Token

What Are the Tokens Used for, Supply and How Can Token Value Appreciate?

  1. Usage of SWH Tokens

    • Base Trading Pair - Switcheo Tokens (SWH) will be added as a base pair while trading on the Switcheo Exchange through the Switcheo UI. The volume of SWH trades is expected to be high.
    • Subsidised Trading Fees - Switcheo Tokens (SWH) can be used to subsidies trading fees on the Switcheo Exchange by 50%. Users may toggle this option in the trading UI. SWH used this way is not collected by the Switcheo team.
    • Used for Cross Swap - Switcheo Tokens (SWH) will be used as the base token when doing cross swaps to other chains in future.
  2. Supply of Tokens

    1,000,000,000 SWH Tokens may be minted in total, and no additional tokens will be minted in future.

    The allocations for the Switcheo Tokens are as per follows:

    • 25% (250,000,000) will be reserved for the Switcheo Team to further incentivize development of the Switcheo Exchange; The tokens will vest monthly on a 2 year schedule with a 3 month cliff.
    • 20% (200,000,000) will be allocated to the Public Sale
    • 48.3% (483,000,000)has be allocated to Strategic Partners
    • 6.7% (67,000,000)will be reserved for Marketing Campaigns & Official Partnerships

    If the founders retain a large percentage of the coins for the future, it is a sign that they believe in the product and they believe that the product would get developed and do well, thus increase the value of the tokens, which they can later cash in on. If the technology is considered useful and people start to use it across the planet, then it seems safe to say that the value of the tokens should rise accordingly.

Team

The Switcheo team currently consists of 4 employees and 3 advisors:

  • Ivan Poon- Co-founder
    Blockchain developer
    Education- National university of Singapore, B.E CS
  • Henry Chua – Fronted Developer
    Education- National university of Singapore, B.E CS
  • Sng Ping Chiang – Backend Developer
    Education- National university of Singapore, B.E CS
  • Jack Yeu – Business Development
    Education-Nanyang PolytechnicSingapore
  • Steven Pang –Advisor
    Vice President, Global Client Solutions APAC
    Education-University of Wollongong Singapore
  • Yingyu Wang- Advisor
    Director, Advocate & Solicitor, Taylor Vinters Via
    Education- National university of Singapore
  • Roger Lim- Advisor
    Founding Partner at NEO Global Capital (NGC)
    Education- National university of Singapore

The advisors are Steven Pang and Yingyu Wang. Steven has a strong background in blockchain and cryptocurrency investing/advising.  Yingyu has a strong legal background, so these both compliment each other well and should prove beneficial to the project.

Opportunities

Market Research

The cumulative valuation of all ICO funding reached $3.775bn in November 2017. 24 hour trading volume for all exchanges reaches can reach billions of dollars for a single token or asset. Switcheo just needs to capture a small segment of this market to be profitable. For comparison, the combined trading volume for DEXs on Ethereum (EtherDelta + IDEX) is currently $6m. This is already a $30,000 daily revenue. However, this is not Switcheo’s goal. We aim to compete head-to-head with centralized exchanges such as Binance and Kucoin, such that we can attain similar volumes to them. This is why Switcheo focuses fundamentally on 3 things:

  • Volume & Assets Available - By having an viable option available for buying / selling tokens that cannot be found elsewhere, Switcheo can gain users this way.
  • User Experience - By having an excellent UI/UX, retail traders stick to the platform, and spread it’s usage through word of mouth.
  • Scalability - At high transactions rates, DEXs perform sub optimally compared to centralized exchanges; Switcheo will commit to constantly refining, optimizing and improving its architecture to support high user loads when it comes.

Concerns

50 % bonus allocated for private sales with bonus locked for 1 Month.

Neon exchange Exchange on cards and coming soon.

Conclusion

  • Switcheo built on the NEO platform will receive fist mover advantage since the DEX will be launched in March 2018.
  • Team looks promising: participated in the first City of Zion’s NEO dApp challenge and clinched the 1350 GAS prize.
  • Project have gained good hype. The white list was closed within hours.
  • The Token metrics looks really lucrative.
  • The Token has good utility value and SWH tokens will be burnt from the profits earned via trading fee. This will increase the price of SWH tokens.
  • Total Market Cap: 12,000,000 ( two low for project of this caliber)
    {Public circulation supply (750,000,000 ) X Ico Price (0.016) }

Future Price calculator

Switcheo Comparison with Kukoin and why atleast 5.5X
Total Switcheo Supply 750,000,000
Market Cap of Switcheo @ current ICO price of 0.016$ 750,000,000*0.016 = 12,000,000
Cureent market cap of Kukoin 180,000,000
Current volume of Kukoin 27,000,000
Comparing with Kukoin market cap (180,000,000/12,000,000)*(10,000,000/27,000,000) = 5.5X
Why Swithceo > 0.16$ i.e. 10X
All Values are in $
Daily Exchange Volume 10,000,000
Revenue @ 0.5% 0.5%*10,000,000 = 50,000
Revenue post 365 days 365*50000 = 18,250,000
Total Switcheo supply 750,000,000
Assuming Switch coin burn @0.16 post 365 days (18,250,000/0.16) = 114,062,500
Circulation Supply post burn 750,000,000 - 11,406,2500 = 635,937,500
Swictheo Market Cap @ 0.16 635,937,500*0.16 = 101,750,000 Approx. 100 million

Note: The above calculations are made basis few assumptions and may vary.

Final Verdict

Long-term: Good (Easy 10x- 50X basis above calculation )

Flip: Good

For more information about the ICO, please visit the following links:

*Please note views are Mandy's personal opinion.