ICO Analysis - CoinFi (COFI) Token

ICO Analysis - CoinFi (COFI) Token

CoinFi have a great concept - to bring the tools and research that are typically available to traditional brokerage firms to the average crypto coin investor. Unfortunately, I believe this project is too immature and not quite ready for this type of launch. There are outstanding questions over the professional history of the founding members and why there are so many advisers on board at this early stage. I feel that it would have been better to have further developed their product before raising money in an ICO.

  • Brings technical trading tools to cryptocoin investors.
  • Well presented website, makes it easy to view ICO details.
  • If successful, could offer incredible value.

  • Very early in the development, no product nor prototype yet.
  • Team is lacking large project management experience.
  • Roadmap shows a significant delay before basic features are available in the product.

CoinFi offers crowdsourced and professionally curated research, analysis, trading signals, trading algorithms, and market-moving news to give cryptocurrency traders the real-time market intelligence needed to gain an edge.

Andreas Antonopoul

CoinFi (CoFI) Token ICO Fast Facts

  • ICO Crowdsale Start Date: 15 January 2017
  • Maximum Discount: 20% (first week buyers)
  • Platform: ETH
  • Amount Raised (Valuation): $15m USD (with a 65% crowdsale, values the company at $30m USD)

CoinFi (CoFI) Token Utility

When trading crypto coins, you quickly learn to identify irregularities in the different coin exchanges. For example, you may notice that individual exchanges do not necessarily offer the same price. The cost of one ETH on exchange 1 may be 0.001 BTC while the cost of 1 ETH on exchange 2 may be 0.00105 BTC. Not a huge difference, but there is an easy 5% variance sitting there. If you had the time to monitor every exchange, you could pick up these 5% variances multiple times a day and they would begin to build up over time.

This is where CoinFi comes in - it plans to do the hard work for you. It offers a simple arbitrage as described above, as well as a number of other trading signals that are usually reserved for large and expensive stock trading apps. As well as these technical trading tools, it will also include crypto news feeds, research and analysis, portfolio management, real time alerts, algorithms, and additional data feeds to assist crypto coin traders.

While the platform isn't reliant on blockchain technology from a technical standpoint, the team have made the interesting decision to require subscribers to stake (put a hold on) 10,000 COFI tokens to use the basic features of the platform. Advanced users, or users who wish to auction for additional features will need to purchase access using COFI tokens. Essentially, the CoinFi team aim to create demand for their token by only accepting payment in COFI. This is akin to seeking seed investors in the real world. If all goes to plan, this should create a digital cash system that becomes desirable and needed by the public.

CoinFi (CoFI) Token Team

Timothy Tam has been a senior trader with a couple of Asian firms. He is also a founding partner of Epigen Group, a company that I could find little information on (not even a business website nor news article). Epigen Group's place of business appears to be a small office building in Hong Kong that has a number of serviced office-type rooms available for rent; and while many businesses operate out of serviced offices (myself included), I do not know of any \$1b USD asset management funds that do. Analysis of Hong Kong's Securities and Futures Commission (SFC) highlights some irregularities with the public profile of Timothy (the SFC is a public register of people licensed to operate in the securities and futures markets in Hong Kong). While Timothy is listed here (APA397), the dates are significantly different to those advertised on his bio and linkedin page.

The SFC shows he was licensed as a 'Responsible Officer' of 'Epigen Group (Hong Kong) Limited', from '05 Feb 2014 - 04 Jul 2016'. While his profile states he was the founding partner of this firm from 'Oct 2012 - Sep 2016', an 18 month difference. This could be due to operating without a license, not operating as described, being in a junior position not requiring a license, not operating in Hong Kong, or maybe there were delays in processing the SFC paperwork.

Further analysis of the SFC public register also brings further queries, his SFC license while working at 'Segantii Capital Management Limited' was less than 6 months and concluded in Nov 2011. This is half of the time advertised on his public profile. It also means he was not licensed to work in the Securities and Futures industry in Hong Kong between 2011 and 2014. He has also not held a license from 2016 to present. These discrepancies raise a few red flags given that he is a founder of a project trying to raise millions of USD.

Co-Founder Han Chang comes in with a Masters in Computer Science from Boston University, currently living in Texas, USA. His first role out of uni was working as a software engineer for Lime Brokerage for a year between 2009 - 2010. This should've given him a solid grasp on trading platforms for the crypto world. Since then however, while he appears to have retained an interest in finance, his professional career has diverged from this sector. Three (undocumented) years later, he started working with OK Cupid to improve the delivery of their website for a year. Eighteen months after that, he worked as a software engineer at General Assembly. It has now been 8 years since he worked in the finance sector, and there are large gaps in his work history - this will not garner confidence from investors. Since graduating university almost a decade ago, Han has had less than four years of recorded work history. While there are plenty of examples of entrepreneurs with less post-tertiary work experience who founded very large and successful companies, investors should be doing their due diligence into the product when this is the case. As will be shown below, there is very little product available to be demonstrated, so this carries a much larger risk.

Finally, Co-Founder Nate Tsang brings degrees in Arts and Law to the team. Since then, he has spent several years flipping websites and co-founding an investment blog with Han Chang.

Then there are nine staff mentioned all with interesting backgrounds that would make an already long section even longer. Of concern are the 12 advisers also mentioned. While receiving some advice is always a good idea, it concerns me to see so many navigators on this ship. Not only that, but with the team already discussed, I'm expecting to see a large portion of the funds be assigned to the 'team' on this one.

CoinFi (CoFI) Token Roadmap

The roadmap shows this project is in its infancy. Video demonstrations of the idea are all conducted in google spreadsheets and manual trading. In fact, the trading algorithms this project aims to use are not expected to be available until 2019. Although, there is mention of using machine learning for everything, including fraud detection, all due to be prototype-ready within the next couple of months. This is an extremely large claim to make with a very short amount of time to deliver it in. Paypal (who perhaps have one of the best collection of fraud detection algorithms in the financial industry) are still developing this, almost 2 decades on.

I had hoped to see more of a proof-of-concept or at least video of the alpha product for a company that values themselves at $30m USD.

CoinFi (CoFI) Token Value

If this team can achieve their stated goal, there is room for growth after the 2 year roadmap time period. Cindicator, a similar ICO project that has recently launched, has been able to achieve a market cap of \$150m. If ConFi could replicate this, it would represent a 5 times increase in value. However, Cindicator has a product already (on iOS, Android and web interface) and a much more mature team and project at this point in time.

I believe a $30m valuation is a little high, especially considering the infancy the product is in at the moment.

CoinFi (CoFI) Token Transparency

CoinFi's plans are clearly presented on their website and all information about the project is documented online. Details of the intended distribution of ICO funds have been illustrated on their website. Social media has been adequately run with some buzz being generated if you look in the right areas.

CoinFi (CoFI) Token Distribution

It is great to see that 50% of tokens will be distributed to investors. However, it is a little sad to see a massive 30% of tokens assigned to company shareholders (team and advisers), although this is not surprising given the number of staff and advisers already on board. I do have questions regarding the 20% of tokens assigned to the CoinFi foundation to 'incentivize partners and early adopters of the product'. This could be used to give even more tokens to the team, or close colleges of the team. It would have been nice to see this portion assigned to the ongoing eco system of the project, security testing and bug bounties, community engagement etc.

CoinFi (CoFI) Token Summary

CoinFi have a great concept: to bring the tools and research that are typically available to traditional brokerage firms to the average crypto coin investor. Unfortunately, I believe this project is too immature and not quite ready for this type of launch. There are outstanding questions over the professional history of the founding members and why there are so many advisers on board at this early stage. I feel that it would have been better to have further developed their product before raising money in an ICO.

I will be watching this closely and I truly hope to invest in COFI when it is ready. However, the risk vs reward in this scenario means I will not be participating in this ICO.

Crypto Coin Disclosure

The author does not hold any tokens in CoinFi or Cindicator.
No payment or private consultation was sought for this article.

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Tags:     cofi erc-20 ico-eth investing