In comparison to the mainstream payment platforms such as MasterCard that can process thousands of transactions per second, Bitcoin and Ethereum blockchain are unable to perform such level of transactions yet. These blockchain networks face the issue of scalability and now more so as their adoption increases significantly. Slow and costly transactions are the issues that need to be tackled. Our today’s ICO is doing just that as it delivers instantaneous and cheap transactions while offering a decentralized exchange and scaling solution. To know all the pressing points or the shortcomings, read onto our Liquidity.Network ICO review to make an informed investment decision.
Liquidity.Network: Blockchain payments for everyone
Liquidity Network is a payment solution that allows multiple users to send Ethereum micropayments for the first time. It is the first-ever off-chain payment system where users can perform bi-directional transfers of Ethereum.
Liquidity.Network basically utilizes the off-chain payment hubs that allow two nodes to communicate directly with each other. This means quicker transactions and the more users on this platform, the faster transactions will take place.
In traditional blockchain, every transaction requires high power costs for verification but with off-chain payment hubs, payment will be quicker meaning transfers can cost almost nothing.
This network and all the related information will be secured by utilizing the blockchain technology as all the user information will be on the Ethereum blockchain.
Now, the evaluation time!!
An interactive whitepaper
The whitepaper of the project is explanatory and attractive at its best. With proper background, targeted issues, solutions, and comparisons are drawn against its competitors, the team has done a good job. Furthermore, it covers the technical aspects as well but without packing it with technical jargons.
The best thing about this ICO is that they already have a working MVP which is hard to find these days. The MVP wallet is running on testnet that is available for testing. Ready for Ethereum, it can also be deployed on Ethereum classic or Rootstock. Moreover, Dfinity and NEO are other possible blockchains.
However, the codes aren’t available on the GitHub which is a bit off point here given the fact that blockchain involves open-source projects.
There is no clarification on the budgeting of the funds so collected during the crowdsale. However, the use of funds in the classification of $10m $20m and beyond is shared that will focus on engineering, research, marketing and communication, business development, and legal services.
Talented team profile
The team has seven people apart from the co-founder and inventor that belongs to the field of development, blockchain, marketing & communication, and strategy. The company is currently hiring for COO position and development team along with advisors.
Arthur Gervais, Ph.D. – Co-founder, He is also the co-founder of the smart contract formal verification tool security.ch and has obtained his Ph.D. in blockchain security from ETH Zurich.
Rami Khalil – Rami is the inventor of REVIVE which is the first decentralized protocol to rebalance payment channels without on-chain transactions. His educational and professional background is primarily focused on the security aspect.
Both the co-founders are from the academic field and having knowledge of blockchain space surely works in their favor. The team is an integral part of a project’s success and Liquidity.Network might not have a big team but they are working towards expansion.
VC Participation: The project has already attracted VC funds such as zk Capital, Danhua Capital (DHVC), YouBi Capital, and ZMT Capital.
Business model: Utility token
The native token of Liquidity.Network is LQD token which will be ERC20 utility token. These LQD tokens will be used to access the premium features of the platform such as a guaranteed number of transactions per second, access to the AOI service or a service level agreement for high uptime
This token will be accepted by the Liquidity.Network in exchange for value-added services.
However, the usability or security of the system’s protocol doesn’t rely on the usage of the token. Also, the utility of token as an access token to off-chain payment processing will increase with the number of members.
Backing technology: Ethereum blockchain
The Liquidity.Network ecosystem is based on Ethereum platform and is portable to any smart contract blockchain. It also means that the platform benefits from the existing development and research community.
As for the terms and conditions, the minimum investment limit to participate is 300 USD. They have also launched KYC measures in order to comply with the Swiss Finance Regulators (FINMA) which are performed on all the participants. There will be two separate KYC measures, for contributions less than 3000 CHF, light KYC will be conducted while for contributions beyond this number will have to go through full KYC that involves certified ID/Passport copy or Video.
Being Switzerland incorporated, the company is in a crypto favorable country. The ICO is restricted to the USA, China, Canada, and Taiwan. Moreover, in order to meet the regulatory compliance, they are working with the law firm Bratschi in Switzerland. However, there are no advisors mentioned in the whitepaper or website.
Out of the total 100 million LQD, 15 percent of the tokens will be released for public pre-sale while 50 percent will go to public sale.
With the focus on the development of the Liquidity Network ecosystem and its community, 35 percent of the total token supply will be retained by LiquidChain. Currently, in the building stage, LiquidChain GmbH is for the development of the platform. These tokens will be bested for over a 2-year period and no funds will be distributed to the team members.
The project has made its presence on Medium, Telegram, GitHub, and Twitter. With over 1,700 followers on Twitter and close to 13,000 members of Telegram group, the company is doing just fine when it comes to building a community around their project. However, there is lack of a wider approach as channels like Bitcointalk are missing from the project’s social profile.
They are also active in providing updates on their project via blogs. However, the project is not as much in hype as it should be, given that it’s a Dutch auction.
Stage of Project:
The roadmap of the project started from the quarter 3 of last year with its alpha version. According to the plan, the company is right on track having already launched its MVP version. However, the roadmap doesn’t mention anything of the crowdsale and only focuses on the milestones were the next one is to launch the official Liquidity.Network version next month.
The Dutch auction which has its pros can affect the potential ROI of a project. Also, it’s not the first time that an off-chain transaction system is introduced, hence tackling the competition from already working systems like Raiden and Lightning Network along with the upcoming projects is going to be a hurdle for the company.
A note to investors
The idea undertaken is certainly a solid one and the most important thing here is a working MVP available for potential investors to test. Targeting the improved transaction speed for various blockchains like Ethereum, Bitcoin, and NEO among others in the future, it focuses on a substantive element. By the end of 2018, the fully working product would be launched.
However, despite having good founders, there are no advisors mentioned. Another point of importance is the current competition in the off-chain payment system market. Also, the project codes aren’t made available on the GitHub and the team lacks in having a wider social media presence. Having said that overall, this project has potential which surely demands attention.!
To rate an ICO, we follow a list of parameters that are basically the KPIs (Key Performance Indicators) of a project viz:
- Whitepaper – Availability of code or prototype, the breakdown of funds, wallet for crowdsale
- Team Profile – Team’s strength and reputation
- Business Model – Problem solved, purpose & utility of the token and the economic model
- Backing Technology – Blockchain infrastructure, clarity of terms & conditions and token software
- Finance – Incorporation, token distribution, legal risks and security aspect
- Community Acceptance – Clarity & frequency of communication and social media presence
By asking the right questions, we maintain the integrity and viability of our ICO review while following a rating method that is based on the criticality of a particular factor. For instance, elements like token utility and funds breakdown have been given the highest importance while the team members’ reputation and plan to attract a user base are of medium criticality.
We have a team of robust professionals who rate the ICO projects in completely unbiased manner.