This is my entry for the sponsored writing contest organized by @monajam. VERTEX MARKET
You can find the contest here
As at the end of 2017, a year that we can justifiably call “The Year of the ICO,” we should acknowledge that something has gone totally wrong ever since. Instead of the ambitious, visionary and great projects that many of us expected to enjoy, the cryptocurrency ecosystem has been swamped with dubious monsters that puff up artificially integrated Blockchain technology into trivial business ideas or even scam projects that would never be implemented, and the fraudsters seeking easy cash
There is quite a huge number of scammers in the cryptocurency ecosystem. We all know that wherever there are huge amounts of money involved, scammers and fake will definitely want to take advantage of the gullible ones involved and its unfortunate that that's how people behave and that how the world we live in works. A scam initial coin offering is nothing that is unusual. I have come across many wonderfully looking ICO websites, where they make promise to provide the most needed solution to the cryptocurrency world and the world in general biggest Issues and challenges. But when you decide to dig deeper, there is usually nothing to support their huge claims and supposedly capabilities. While most whitepapers explain what the startup “plans” to do, the firm is under no legal obligation to follow those plans, and the pseudo-anonymous nature of cryptocurrencies will probably make legal claims difficult to enforce in practice. Their whitepaper contains ridiculous promises which are too good to be true, but if you check well, you won't be able to find one single line of code that handles the challenges the say they will solve. Nowadays, you have to view your investment in cryptocurrencies like you are investing in a ''Tech start up''. Now would you even think about giving money to some company that hands you a piece of paper where he assures you of a solution to solve a particular problem, backing it up with virtually nothing? No, i don't think you would.
SOLUTION
Vertex is trying to solve the problem of people not knowing which ICO to invest in and there are tons of them out there. In a nutshell, what Vertex will do is vet ICO's, they will use a six layer vetting process and the goal of their entire project and ecosystem is to get crypto experts to come together and leverage their experience for the benefit of the Vertex users and ICO investors. They will create a systematic vigilant vetting process, that would benefit anyone who wants to participate in crypto investing, but doesn't have the expertise to properly distinguish a good ICO from a bad one.
They also will combine this vetting process with an aftermarket ICO platform, with the aim of increasing the likelihood that a buyer will participate in a successful ICO and alternatively experience a return on their investments.
HOW WOULD THIS WORK
- Vertex will vet ICO's , and then invest in those tokens.
Vertex will invest in the ICO's that it determines as the most promising and the Vertexvetting team rates those ICO's and provides a written analysis of each ICO and they eventually get listed on the platform. So Vertex users come in, and see detailed explanations about why each ICO passed the vetting process, and the testing criteria where that were used.
Vertex tokens (VTEX) are ERC-20 tokens on Ethereum blockchain. The total supply of VTEX is 300 million and 60% of it will be available for public sale.
Vertex users will use the Vertex tokens called VTEX to buy the ICO tokens from Vertex, and they will only be able to do that after the ICO is over. The prices of these ICO tokens in terms of VTEX would be determined by the value of VTEX relative to ethereum at the time that Vertex starts selling the ICO token.
So at any given time, Vertex users will be able to see which of the ICOs are being vetted by Vertex and which ICOs that are soon going to be listed on the platform. So because Vertex is buying tokens from vetted ICOs in huge bulk, it will give ICOs larger discounts on those tokens and Vertex will be allowed early access to the tokens as well. So Vertex wants to not only pass the discount unto the Vertex users, but they also want to give access to vertex to highly covered tokens that often have already sold out during the ICO's original sale.
So in theory, if Vertex does Vertexwants to do, users will know which ICOs are the best ones to invest in, they will also be able to get these tokens at lower prices than the rest of the public. Tokens that have limited availability during the ICO or have run out of availability could be accessible to Vertex users
The Vertex Wallet
Vertex will offer its own ERC-20 compatible wallet, where the users will store their ERC-20 tokens. The wallets will be secured with private keys and users accounts with 2FA.
HOW ARE VERTEX ANALYSTS GOING TO VET THE ICOs
Vertex analysts are going to vet these ICOs using these processes;
- Vertex will analyse basic information about ICOs . Vertex will gather basic data about he project everything from the background goals to feasibility to the token's own due diligence when it comes to accounting and token economics.
- Vertex will filter out ICOs based on this information.
Vertex categorizes ICOs according to the data provided. They start a filtering process which is going to get rid of everything but the strongest projects. - Vertex Vertex will analyse business plan, advisors, and team and cut 75% of the remaining ICOs. Vertex will do an analysis of each business plan of the advisors, of the quality of the team, the capabilities of those team members, because a times these projects may be good and pass the initial screening, but might not have the right people to make the project a reality.
- Vertex will do a deeper analysis of that information and cut another 75% of ICOs.
Vertex will take the ICO's that are left and do a deeper dive into even more variables than the ones I have mentioned above. - Vertex will meet face to face with the ICOs and cut another 50%.
After rounds of cuts, Vertex will meet face to face with the teams of the remaining ICO's because they would want to learn whats going on behind the scenes. Sometimes meeting the person, or going to the office, or having a face to face encounter gives you the kind of information you can't get from the whitepaper, for example the description of the token allocation. - Vertex will negotiate the conditions of the token purchase.
Vertex will approach the ICO and negotiate the condition of a bbulk token purchase. Vertex will require discounts as well as part of the payment to be in VTEX tokens.
WHY VERTEX
Vertex is a capital company, and they are building quite a strong network with funds, so penetrating Vertex and getting Vertex to label an ICO as good is definitely in the future going to be a very important thing for the ICO.
BENEFITS AND ADVANTAGES TO PARTICIPATING FOR BOTH INVESTORS AND ICOs
There are a number of advantages to participating for both parties which seems like it would be important for this to work.
- For ICOs
The ICOs would benefit by being vetted by Vertex, and of course Vertex needs ICOs to participate in the process in order for the VTEX token to have any utility within the ecosystem.
The ICO will also get a reputational boost, support from Vertex and free advertisement on the platform.
Investors now have a single access point to all ICOs that are being vetted and rated. Vertex will help the investors to investigate the core team behind the project, find out if they really exist, who they are, what they have done, check their track record and experience that is relevant to the project that is verifiable. So they will literally find out if the team has the ability to deliver just like they have promised, hence giving you an idea of the integrity of the ICO and their project. - For Investors
Since it is difficult for people who are new to cyptocurrency, and even people with some experience in the space to know which ICOs are worth investing in, with Vertex, the risk of investment is reduced by more than 70% because the ICO listed on the site would be the ones that have gone through the vetting process. You are now given the opportunity to view scrutinized ICOs, and make good decision and not just to invest in something that might just be a mere idea with skin depth.
HOW WOULD THE PLATFORM AND AFTER MARKET WORK.
The aftermarket is filling the gap and is offering tokens before they are listed on the exchange, but Vertex is not an exchange because Vertex is not allowing people to buy and sell or define a price, because if it is so, it would just make Vertex another exchange. So the aftermarket will be a platform where users see the tokens for a price, and the price will remain the same. So the price of the token doesn't go up or down, there is no volatility in the price.
NB: Vertex will fix the price of the token.
EFFECT ON THE CRYPTO WORLD AND ECOSYSTEM
There are a lot of ICOs out there that raise enormous amounts of money for having no working product at all. Just like any project has the potential to fail, ICO's have the same, but there are some that fail right from the beginning because of empty promises without any backing, no effort has been put, etc and those that have no in depth knowledge about cryptocurrency and Initial coin offering are usually the victims and this keeps on giving the non-crypto world a bad image about cryptocurrency and ICO'S in general. This practice just makes the whole crypto space look like one big rip off, hence scaring away more people that might otherwise enter and make more difference to the crypto ecosystem
With Vertex coming into the picture, investors can now treat projects with more understanding, and this will help sift out the bad or fake ones while promoting the good ones for more adoption, because Vertex will treat these projects as long term ventures and thoroughly examine the founders experience and project roadmaps.
TEAM
Vertex is headed by CEO Alessandro Pecorelli, who operates out of Zurich, Switzerland. He has a lot of experience in developing software. He also has executive experience at IT companies. The rest of the team is an interesting mix of crypto analysts, crypto traders, and they are the people who are going to be doing the vetting, and then there is also a well staffed marketing and business development department
TIMELINE AND PUBLIC SALE
Here is how the tokens will be distributed
Source: Vertex Market Whitepaper pg.25&26
Timeline
Source: Vertex Market Whitepaper pg.24
So at the end the day, the problem Vertex wants to solve is really simple. If it is executed properly, I believe ICOs will be willing to cooperate with Vertex vetting because it could result in a massive bulk token purchase which will help the ICO reach their goals in terms of the token sale. And if Vertex ends up liking the project enough, it could also lead to a number of new people who are working with Vertex ultimately owning or requiring the tokens.
The ICOs that participate will have an incentive to participate and be evaluated. Vertex of course has the incentive because this is the platform that they are building.
So this is a really interesting project, the team looks great and its a great idea. It solves whats probably the greatest problem when it comes to investing in ICOs.
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