ICO Analysis: CoTrader
The cryptocurrency market is an extremely volatile one, implying any investor should be extremely cautious if he or she is not to lose a high percentage of his or her money. So many altcoins have lost around 90% of their values since their ATHs (all-time highs). Even the number one cryptocurrency, Bitcoin, has come down from an approximate value of $20,000 to $6,000 since the beginning of this year. Yet this does not necessarily mean that every single player in the domain loses money. Whenever there are a price swing and market movement, there is also an opportunity to make a profit. Yet this is not that easy, as many inexperienced crypto-investors lack market expertise and usually tend to have an emotional approach, which coined the terms like FOMO (Fear of Missing Out) or FUD (Fear, Uncertainty, Doubt). Contrary to people with such a mindset, seasoned investors usually miss fewer price swings and the take the necessary steps to make profits. But if these investors had access to larger funds, they could make more money. To connect these seasoned traders with inexperienced traders, many platforms have surfaced, in which traders get a relatively small cut of the made profit and investors get the rest along with their initial investments.
CoTrader is such a platform, claiming to be “The Uber of Hedge Funds”, enabling anyone to create or join a crypto-currency fund. It differs from its competition in several aspects, such as that investor can withdraw their funds at any time instead of being able to withdraw only after a pre-determined period is fulfilled, or the implementation of anonymous funds protocol which will give traders the chance to withhold their trading strategies. Currently, all trades are executed through Kyber Network, but in the near future, Bancor and 0x will be used as well.
A feature called Smart Funds, which are basically Ethereum smart contracts with fund managers, investors, and shares, is the essence of the platform. In return for his or her investment in a smart fund, the investor gets fund shares, representing what percentage of the total fund he or she owns. Fund managers execute buy and sell orders to make profits and get a performance fee in return. Although they will be able to manage ETH and ERC-20 tokens for now, in the future more assets, including other cryptocurrencies, fiat money, precious metals, and stocks will be available on the platform.
COT tokens are used to stake, pay fees, buy-back profits and shield fund managers’ investment strategies. The team is planning to use all platform profits to buy-back COT tokens and hold them indefinitely, which will decrease the demand and most probably will push the price up. For those who are not familiar with this, Binance’s native token, BNB, uses a quarterly buy-back and token burn strategy, which pundits believe has contributed to BNB’s strong price performance over time.
The initial total supply of COT is 100,000,000 tokens with the following token distribution:
- 65% TGE ICO
- 5% MM + bounty + airdrop
- 10% operations
- 20% team
Tokens allocated for operations and the team are vested for four years. Any unsold token will be either burned or allocated to the operations fund.
The team is planning to use the token sale proceeds as follows.
- 10% administration
- 10% incentive
- 20% joint venture
- 10% legal
- 25% marketing
- 25% development
Gary Bernstein: Bernstein has worked as a senior software engineer at Harman International, a public consumer electronics company.
Parwej Ahamad: Ahamad is a lead developer at UnitedHealth Group and was a senior software engineer at InterGlobe Technologies.
Eric Zeng: Zeng has worked for J.P. Morgan New York, Goldman Sachs New York, and Harman International.
Elad Peled: Peled is the co-founder at Senno, a blockchain-based decision-making network.
Below is a breakdown of the risks and growth potential of CoTrader.
- Competition with projects with similar goals and structures. (-2)
- Only ETH and ERC-20 tokens can be included in funds for now. (-1)
- Fund managers have the chance to mask their trading strategies and presumably orders, which might be a concern of transparency for fund investors. (-1)
- The main-net is already live, which is a rare sight nowadays for ICOs. (+5)
- A low hard-cap of $3,000,000 for 65% of all tokens, combined with the fact that 30% of tokens will be locked for the next four years. Token metrics are exceptionally good, which can yield great returns on investment. (+4.5)
The cryptocurrency market is a volatile one with extreme price swings all the time which yield great profits or losses depending on the investor’s market expertise. Even in a bear market, those price swings are a way to make profits which inexperienced traders are usually unable to catch. But now thanks to CoTrader, an inexperienced investor can “lend” his or her funds to a seasoned trader in return of a small percentage of the profits made and enjoy the ride. The investor does not have to spend his or her precious time to obtain the necessary skills and knowledge and follow the market. Fund managers which gain access to investor funds by Ethereum smart contracts are more than willing to do so. Still, CoTrader is not the only kid on the block as there are already many projects with similar goals and structures, meaning competition is definitely out there. Yet, the presence of the main-net even before the ICO has started is definitely something we do not see very often these days and definitely a huge pro for the project.
Furthermore, anyone considering investing can go check the demo for him or herself and make a decision, not based on a white-paper or some video, but an actual product. The team is aiming to raise merely $3,000,000, which is a really low amount compared to other ongoing ICO projects. The low hard cap could draw in investors that see more potential for price appreciation relative to projects with higher hard caps/market capitalizations. CoTrader receives a 6.5/10.