ICOrating

Ubcoin Rating Review (https://ubcoin.io)

ICO dates (02.04.2018 - 14.07.2018)

Web: icorating.com

Email: info@icorating.com

Twitter: @IcoRating

1. Rating 3

2. Introduction 4

3. Project services 7

4. Market review 9

4.1. Market analysis 9

4.2. Competitive analysis 10

5. Team and stakeholders 13

6. Tokens 15

7. Analysis of factors affecting the future value of the token 17

8. Investment risk analysis 18

1. Rating

We assign Ubcoin a “Stable+” rating.

The Ubcoin project is expanding its business as a marketplace and intends to offer its

own token to be used in transactions on a proprietary platform developed on the basis

of the successful Ubank product.

Despite the use of cryptocurrency’s rapid increase in popularity, it still remains

somewhat incomprehensible for the majority. Many prefer to stay away from any non-

fiat transactions due to conservatism; there is only a superficial penetration of

cryptocurrency into everyday life. Ubcoin may have to deal with this problem. However,

the project counts on attracting crypto users, rather than those who prefer to settle in fiat

currencies.

Factors that could have a negative impact on the future development of the project and

the forthcoming ICO include the following:

• There are some direct blockchain competitors in the market. This could hamper the

development of the project.

• The hard cap is not justified as currently set.

However, we note that the project has advantages over its competitors; a business

model and a global marketing strategy are presented, and the token is tied to platform

services. Unlike its competitors, the project has a ready audience as a result of 16+

million installations of the Ubank app; the Ubcoin Marketplace will be part of this, which

is an advantageous position compared to competitors that have to build up their user

bases from scratch.

2. Introduction

Ubcoin is a blockchain-based marketplace for the purchase and sale of real goods for

cryptocurrency; it is an extension of the Ubank mobile finance application that has been

available since 2013 in the Russian Federation.

Website

Whitepaper

Smart contract platform: Ethereum blockchain

Contract type: ERC-20

Token: UBC

Total emission: 1,500,000,000 UBC

Hard cap: 70,000 ETH

Private Pre-Sale:

Start date: March 10, 2018

End date: March 31, 2018

Token rate: 1 UBC = 0.0000535705 ETH (1 ETH = 18,667 UBC)

Hard cap: 7000 ETH

Accepted currency: ETH

Minimum purchase amount: 5 ETH

1st phase of the token sale:

Start date: April 2, 2018

End date: April 21, 2018

Token rate: 1 UBC = 0.0000892857 ETH (1 ETH = 11,200 UBC)

Minimum purchase amount: 0.01 ETH

Maximum purchase amount: Unlimited

Discount to token sale price = 29%

2nd phase of the token sale:

Start date: April 22, 2018

End date: May 11, 2018

Token rate: 1 UBC = 0.0001000000 ETH (1 ETH = 10,000 UBC)

Discount to token sale price = 20%

3rd phase of the token sale:

Start date: May 12, 2018

End date: May 31, 2018

Token rate: 1 UBC = 0,0001041667 ETH (1 ETH=9600 UBC)

Discount to token sale price = 17%

4th phase of the token sale:

Start date: June 1, 2018

End date: June 20, 2018

Token rate: 1 UBC = 0,0001086957 ETH (1 ETH = 9200 UBC)

Discount to token sale price = 13%

5th phase of the token sale:

Start date: June 21, 2018

End date: June 10, 2018

Token rate: 1 UBC = 0.0001157407 ETH (1 ETH = 8640 UBC)

Discount to token sale price = 7%

6th phase of the token sale:

Start date: July 11, 2018

End date: July 14, 2018

Token rate: 1 UBC = 0.0001250000 ETH (1 ETH = 8000 UBC)

The distribution of tokens is as follows:

The diagram shows the future distribution of funds raised during the token sale:

According to information provided on the project website, at the time of writing more

than 4100 ETH had been raised.

Tokens are created as funds are received. No additional emission is provided.

3. Project services

The goal of the platform is to enable anyone who wants to buy or sell goods and

services without using fiat. The means for mutual settlements will be the domestic

currency - UBC tokens.

When registering on the platform, each user receives an Ethereum wallet tied to his

account. Two-factor authorization (2FA) is provided to ensure security when launching

the application and conducting payment transactions.

Users will be able to buy / sell various goods - clothing, household appliances, jewelry,

cars - everything that could be transferred from one person to another via mobile

application while maintaining their anonymity. KYC / AML procedures are not mandatory

for the main aspect of transactions, apart from certain types of transactions with third-

party suppliers - delivery companies, couriers, notaries, etc. Reliability and transparency

of transactions will be provided by smart contracts.

For convenience, the Ubcoin Marketplace application interface is divided into three main

sections that have the following capabilities:

Storefront Section Seller Account

Management Section

Buyer Account

Management Section

Product category screens Tools for creating and

managing sales

Saved favorites and

previous searches

Product description

screens

Ad promotion and targeting

toolkit

Customer crypto wallet

Intelligent search engine Ad statistics - number of

views / clicks / comments,

etc.

Product recommendations

based on previous

searches and purchases

AI-based preview of user

messages, product

descriptions, visual and

video content

Sales conditions and

payment management

screens

Product recommendations

based on previous

searches and purchases

Seller’s crypto wallet Feedback management

toolkit Review management screens

CRM

When placing an ad, a user can connect additional paid services such as a premium ad,

placement at the top of the product list for several days, etc. Moderation of ads will be

done using machine learning and AI.

There is a rating system for sellers based on the number of successful transactions and

the quality of goods sold. In the event that a seller changes his mind about selling a

product or in case of arbitration to resolve a dispute between a seller and buyer

regarding the quality of the goods and its declared characteristics (if the arbitration

takes the buyer's side), the seller's rating is reduced. The seller will be charged a fee for

each successful sale, the amount of which depends on the seller's rating - the higher

the rating, the lower the fee. There will be no fees from buyers.

At the time of writing the MVP is under beta testing, after which the Ubcoin marketplace

will be integrated into the Ubank application available for Android and iOS. According to

the White Paper, Ubank currently has more than 2.5 million active users every month.

The project is planning to implement a built-in cryptocurrency exchange service on the

platform in the second quarter of 2019.

The application is preinstalled in a number of models of smartphone (Samsung and

Fly); due to this the number of its installations has exceeded 16 million. However, the

current application has geographical limitations.

We think that the expansion of the existing Ubank application with its own customer

base could be popular with users wishing to buy goods for cryptocurrency while

maintaining anonymity.

4. Market review

4.1. Market analysis

We will cite information from the «Global cryptocurrency benchmarking study» by the

Cambridge Centre for Alternative Finance1 for this section. The credibility of the authors

is undoubted; this research was also conducted with the support of the world's largest

payment operator, VISA and involved the largest crypto portals, exchanges and other

members of the global community.

Current Ubcoin business operations fully cover the three main areas of the crypto

market considered in the Global cryptocurrency benchmarking study: Exchanges,

wallets and payments. Thus, the market potential for the project in terms of existing

services is determined by the dynamics of demand for cryptocurrencies and their

capitalization.

Current aggregate capitalization of all cryptocurrencies represented on the popular

analytical service Coinmarketcap2 is $345.7 bln. In early 2017, the market capitalization

of cryptocurrency hardly exceeded the $18 bln mark. At the end of the same year,

capitalization reached $769.1 bln. Currently, the market capitalization has decreased

almost 2.22 times compared to the end of last year. This is due to the fact that digital

assets are characterized by increased volatility and unpredictability. Cryptocurrency

reputation and uncertainty with its regulation in most countries remain one of the main

issues that regulators and participants in this market have yet to solve.

In the crypto exchange area, the major market share is occupied by a few large crypto

exchanges. Other sites account for only 25% of the market. The study we cited notes

that there is a significant difference between large and small platforms in the breadth of

services offered, licensing and security, which is the main reason for the market

segmentation. Thus, 52% of small platforms have official licenses; for large exchanges

this figure is 35%. At the same time, 86% of large exchanges and 76% of small ones

support multi-signature. 73% of small platforms support one or two cryptocurrencies,

while 72% of large exchanges support two or more cryptocurrencies.

The crypto wallet segment is also actively developing after the start of the adoption of

virtual currencies by the larger population. According to Cambridge research, the total

number of user wallets increased more than 4 times from 2013 to 2016, up to 35 million,

and the number of active wallets is gradually increasing. Wallet providers actively

implement new functions and increase their convenience, security and accessibility. The

list of supported currencies and means for their deposit and withdrawal also grows.

Thus this market is quite competitive.

1 https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2017-global-cryptocurrency-benchmarking-study.pdf 2 https://coinmarketcap.com/

The payment services market is developing following the rest of these segments. In the

study, the authors collected data from 48 companies providing services from 27

countries. Most of them are European; the largest number of companies are based in

Great Britain and the US (15%). It is stated that more than 79% of payment operators

maintain relations with the banking sector and payment networks but the difficulties in

maintaining these relations are a defining problem for the market.

Thus, the potential market for Ubcoin is very extensive, but its development is closely

connected with the penetration of cryptocurrencies into the global financial system. This

is important to understand since many associate the acceleration of the market trend in

cryptocurrencies with increased risk.

4.2. Competitive analysis

The market for global marketplace appeared a long time ago; as a result there are many

successful market giants, but settlements on such platforms are of course carried out in

fiat: AliExpress, Amazon, Ebay and many smaller ones.

Among the main blockchain competitors for Ubcoin, we distinguish the following

projects:

Cryptaur3 — a decentralized Ethereum-based ecosystem which is a platform for a

potentially unlimited number of specialized P2P services (dApps), through which

3 https://cryptaur.com/home/

suppliers and consumers of a wide variety of products and services can interact directly

thereby increasing economic efficiency for all transactions within the ecosystem.

Features of the Cryptaur ecosystem include:

➢ The universal means for mutual payments and rewards is the Cryptaur (CPT)

token.

➢ Cryptaur Pay (CPP), a multifunctional payment platform.

➢ A Global Users’ Rights Protection System (URPS).

Operations within the Cryptaur ecosystem are to be implemented in proprietary crypto

tokens - CPT. Another function of this Cryptaur token will be to reward participants for

active use of the ecosystem and for contributing to its development (several types of

crypto payback, sharing grace, etc.).

According to information from the website, Cryptaur tokens have been traded on crypto

exchanges since April 2018.

Storiqa4 – a marketplace platform with a completely self-sufficient ecosystem designed

to create stores with all the innovations of e-commerce, including an ability to pay for

goods in cryptocurrency and platform tokens (STQ). The concept of the project involves

two ideas; the first and the main one is to unite producers within a single global platform

providing them with tools to bring their unique products to the global market, while

avoiding financial boundaries, intermediaries, complex bureaucratic delays and minimal

transaction costs. The second idea is the integration of cryptocurrency for all operations

and blockchain to ensure all processes are transparent and fair.

The project’s ICO is completed – the hard cap of $25 mln has been achieved.

Vestarin 5 – a platform that provides marketplace services based on a mobile

multifunctional application, that aims to create a single community for all crypto market

participants:

➢ Investors;

➢ Crypto specialists

➢ Startup founders

➢ Entrepreneurs

➢ Cryptocurrency holders

Vestarin will unite several segments of the ICO market on its platform. The project’s ICO

is over; information on the ICO results has not yet been published in official sources.

We think that the Ubcoin platform could be in demand among a growing number of

participants in the crypto industry. The founders consider users who wish to become

investors in UBC tokens or use these tokens as a means of payment, as their target

audiences. A unique distribution model, a pre-installation for Samsung and Fly

smartphones, will help increase Ubcoin’s share in this market segment. We also note

4 https://crowdsale.storiqa.com/ 5 https://www.vestarin.io/

that according to the founders, anonymity will be guaranteed to all crypto holders on the

platform; this is also a competitive advantage for the project.

5. Team and stakeholders

The Ubcoin team includes 6 core members and 4 advisors. Key positions are occupied

as follows:

Felix Khachatryan (linkedin) – Founder and CEO of Ubcoin.

Entrepreneur with a master's degree in political science and government from RAU

University. The creator of Ubank, a universal free payment solution for smartphones.

Has worked for Ubank since 2011, founded inTAXI in 2010, has experience in finance

and financial services, as well as creating uTalk.

Education:

RAU University 2006

Mazhar Jan (linkedin) – Founder and Investor in Ubcoin Market.

VP Product Development and VAS at FLY Mobile.

Education:

Moscow State University of Instrument Engineering and Computer Sciences (MGUPI)

Alex Putilin (linkedin) – CTO and chief blockchain developer of Ubcoin.

A software developer with 15 years of experience.

Education:

Moscow State Technological University (Stankin)

Stan Danysh (linkedin) – Financial industry professional.

Has worked for Ubank since September 2016. Stan was deputy chairman of MDM

Bank. He has 10 years of experience as a financial director, and has experience of

creating a business and its subsequent sale.

Education:

University of Alaska Anchorage

The advisory board has the following key members:

Yama Bassam (linkedin) – an American businessman with more than 10 years of

experience in the banking sector. A member of the regulatory body for the US financial

industry.

Maxim Filin (linkedin) – a network specialist with many years of experience.

Thus the Ubcoin team has gathered specialists with extensive experience in relevant

fields. The team has strong experience of teamwork. An advantage of the team is that

the founders already have experience with launching startups and selling ready-made

businesses.

6. Tokens

A smart contract repository is available on GitHub6:

Token name – UBCoin

Symbol – UBC

Decimals – 18

UBC – an ERC20 Ethereum blockchain utility token intended for mutual settlements

within the Ubcoin marketplace.

Platform participants buy UBC using cryptocurrency. Tokens are credited to the wallet

linked to a user’s account. The user selects goods via the application; the necessary

number of UBC tokens for payment of the goods is blocked on his balance; this

reserved amount is transferred to the seller's wallet after confirming purchase by the

buyer. The platform’s smart contracts function only with UBC; other currencies are not

accepted.

The White Paper mentions the possibility of connecting additional services (premium

ads, placement s at the top of ad lists). Prices for these services will also be quoted in

tokens.

Given that the project has a tool to reduce the risk of exchange rate fluctuations in the

form of a reserve pool for reducing the volatility of the price of goods at the time of

6 https://github.com/ubcoin/ubcoin/tree/master/contracts

transaction, in our opinion this approach offers an advantage for using tokens on the

platform as opposed to other cryptocurrencies.

7. Analysis of factors affecting the future value of the token

The contract for issue of UBC tokens is structured in such a way that the number of

UBC tokens in the reserve fund, as in all other allocations, depends on the number of

tokens sold in the pre-sale and the ICO. This is illustrated by the following scenario

analysis provided by the founders:

The size of the reserve fund is proportional to the size of the ICO, and in this case it

functions like a market maker in the classical market. If the market price of UBC tokens

falls below its intrinsic value, the company will buy them, thereby maintaining the level

of token demand. If the market price of UBC tokens rises above the intrinsic value, the

company can either sell the available UBC tokens from the reserve or continue to hold

them.

As a result, to stabilize the market price of UBC token, the founders propose a strategy

determined by factors such as the availability of funds for buying up UBC tokens, the

need for funds for the company's requirements for the sale of UBC tokens, and pre-set

price volatility triggers for UBC tokens. This mechanism for controlling short-term

volatility is also necessary for the successful functioning of the marketplace in order that

transactions can be correctly carried out, that rate changes do not lead to the disruption

of concluded deals. According to the founders, such a mechanism should create a

balance between the interests of users in the sale of goods and the interests of

investors in investment income. We note that in using this strategy, the speed of the

team’s decision-making will be important for stabilizing the token exchange rate in

already concluded deals.

According to information provided on the website, the team is planning to implement

their buyback program to the amount of 10% of the operating profit when the project

enters positive operating cash flow, expected no earlier than by 2021 according to the

business model. We also note that 5% of UBC tokens received from commission

income are planned to be burned as from 2021, and we think that these factors will also

contribute to the future growth of the market price of UBC tokens in the long term.

share of max Scenario 1 Scenario 2 Scenario 3

Raised at pre-sale & ICO, $ 10 000 000 25 000 000 40 000 000

Average token price, $ 0,0365 0,0375 0,0391

Maximum supply, number of tokens, inc: 548 000 000 1 332 000 000 2 550 000 000

investors 50% 274 000 000 666 000 000 1 023 000 000

team 12% 65 760 000 159 840 000 366 480 000

bounty & advisors 4% 21 920 000 53 280 000 122 160 000

community 3% 16 440 000 39 960 000 91 620 000

reserve pool 31% 169 880 000 412 920 000 946 740 000

Valuation, $ 20 000 000 50 000 000 80 000 000

8. Investment risk analysis

We have identified a number of risks inherent in the project:

The rate for UBC during the ICO period is pegged to ETH. Given the high volatility of

cryptocurrency, this creates an additional risk, since in the case of an increase in ETH’s

rate, the price of one token becomes more expensive. At the same time, in the event of

the fall of ETH, UBC clearly becomes cheaper.

A beta version of the platform will be launched in September 2018. According to the

roadmap, a full launch for the platform is expected in early 2019. This factor incurs risk

of an outflow of ICO participants in order to fix profits to the amount of the bonuses

received for the ICO, if the listing of UBC tokens on exchanges takes place before the

launch of the platform.

Since platform prices will be set in UBC, the price of goods may change during the

period for blocking tokens in the buyer's wallet until goods are received from a seller

(end of the transaction) due to the high volatility of cryptocurrency. This fact could

reduce the number of planned transactions.

The reserve fund consisting of 31% of funds received during the pre-sale and the ICO is

managed by the founders. Tokens belonging to the team and commissions for covering

current expenses could be sold on the market, which will affect the exchange value of

the UBC token. The project takes this into account when making decisions but this risk

is still present.

It will be individuals that will firstly be integrated in the Ubcoin tokenomics mechanism.

The involvement of legal entities in the project will begin one year after the ICO. The

use of tokens by legal entities is problematic in many countrie,s and it is not known how

the regulation of utility tokens will develop, including in those countries whose legislation

is currently supportive of the use of cryptocurrency.

At the time of writing, the Ubcoin hard cap is $46 mln. Such an amount has not been

collected by any ICO for a marketplace project. According to the founders, the project

will be launched regardless of the results of the ICO; the hard cap value is not

substantiated in the documentation.

The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication. Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud. We appreciate feedback with constructive comments, suggestions and ideas on how to

make the analysis more comprehensive and informative.