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ICO Project Review: Coinchase - Blockchain Crowdfunding

18 november 2018, 21:52

General Idea

Coinchase wants to become the bridge between Blockchain ICO-based projects and the crypto community, investors and token buyers. They want to create a crowdfunding platform with the focus on raising funds for the earliest stages of the projects to get everything moving, offering things like bounties, rich investors, KYC procedures and so on.

Problem with ICOs

With the popularization of blockchain technology, a new type of funding emerged. Token offerings have become incredibly popular in the past two years with the new projects and start-ups raising millions of dollars in exchange for their coins. These can act sometimes as company's shares or are needed for the platform, game or app to function. When the project becomes popular, more people want to acquire these tokens, therefore early investors have a chance to sell them for multiple times more.

The company benefit from issuing the tokens early by getting the necessary funds to fully developed the promised project. However, this is all based on the trust that the developers will deliver a working product. Sometimes, they disappear or the project turns out to be simply of very poor quality and the tokens become worthless, leading to loss of money for the early buyers.

This has become the biggest problem among the very efficient type of crowdfunding that ICO became. With some people pulling out millions by creating scam projects, investors aren't as keen on purchasing early as they had been before.

Coinchase wants to once again establish that trust between buyers and blockchain project creators, by offering them a secure way of ICO participation.

Decentralized Information System

Currently, all of the information that is available about certain project is provided by the developer of said project. That means, they can offer and promise everything they want. Moreover, any project group chats and blogs are also managed by that team, therefore there is a chance that potential negative comments that point out some flaws, drawbacks or extortions are being censored or deleted.

Coinchase wants to create a decentralized system, where anyone can leave an honest rating and review of any ICO without worrying that the comment might be deleted. Moreover, they want to provide both static and dynamic information about the project, current status and progress. By applying KYC and AML rules there is also an increased trust among the interested parties.

Also, there will be a refund system:

"In order to protect participants in bear market, Coinchase stands by the users' side and asks project parties to participate in ‘Break and Return' insurance: If the average price of project's token falls below Public Sale price on the first 48 hours of the first exchange listing, users can choose to be refunded by Coinchase."

Benefits For The Developers

The community gets more reliable projects to contribute to, while the founders and developers get a more willing and involved investors and early participants. Coinchase wants to gather all the people interested in supporting the field of blockchain technology in one place.

According to the data provided by the Coinchase itself, they already have more than 150,000 mobile phones registered and over 20 multi-language Telegram groups with 500,000 users. That's add up to a significantly big community that together can fund and help to start any project. For example, one of the successful Coinchase Public Sale project is DACC, which raised over 10,000ETH only within a week.

3 Funded Projects

At the time of writing this article, Coinchase while being still at the early stages of its path, have already successfully funded 3 blockchain-based projects, raising 14,000ETH. Currently, they are raising funds for their own platform development and issuance of CCH tokens through their own platform. This seems like a good way to showcase how it works.

The project collects 5% of the raised money in order to use the funds to incentivize more users to participate in next public sales, fueling the whole ecosystem:

"For instance, if Coinchase raises 5,000 ETH for Project A during their Public Sale, it will collect 5% as service fee which is 250 ETH. Then, Coinchase will double that number. In this particular example, it would equal to 500 ETH and share it with the project’s Public Sale participants using CCH Tokens. That would be 500 ETH worth of CCH Tokens shared among the Public Sale participants, percentage wise based on their contribution to the project."

CCH Token Sale

The initial exchange rate for CCH token is 1 ETH = 40,000 CHH, however by buying it at the early stage the user can get even up to 30% of discount.

CCH is an utility token used within Coinchase platform. It provides an economic incentive for Coinchase crowdfunding and membership. Following completion of the Token Sale, they aim to get CCH listed on several major cryptocurrency exchanges.

The Team

The team consists both of blockchain developers responsible for the technology and the token behind the project, but there are also marketing managers, community managers and designers. Therefore, the platform seems to have proper members to start with. The team is relatively small, however it is extended by the advisory board that has few well experienced cryptocurrency specialists, for example Founding Partner of Crypto Capital Partner & CMO of Bit Forex.

Final Thoughts

The design of the site is quite simplistic, however it is easy to navigate through the site and research the available projects to fund.

When it comes to potential drawbacks of the project, there is no detailed documentation provided and even though the whitepaper explains the main idea behind the project quite neatly, it lacks technical details and broad descriptions of the offered features. As the project is still at its early stages, the team is relatively small, however as an advantage acts the fact that members experience and skills are transparently available with their LinkedIn profiles added.

As through ICO offerings pass millions of dollars each month, a platform to establish that trust among supporters and creators seems like a good fit into the market. When it comes to the potential competition, there are few already developed blockchain crowdfunding platforms, however none seem to be leading at the moment, therefore there is still place for a new competitor.

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