analytical note on the WishFinance ICO whitepaper

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 28/09/17

Eugene, i am grateful for your request! i will do my best to be open and constructive. you can find just

comments and… alternative view in some critical key points – it could be useful as outside observer point of

view, out of the system, out of your areal.

if you put all comments together you will get an alternative model to develop. the model to develop and

launch before someone else will do. it will be a global trend – cutting expenses = cutting margins = cutting

fees. another type of entrepreneurs is coming with quite different view regarding marginality of the business

in particular – that should be taken into consideration strongly.

Slide 4:

it is clear to see the importance of small and medium companies within their national economies. fully support

the statement! just let me make some initial push and upgrade it right at the beginning of the note, provide

you with a proposition…

to make the loan platform as a part of more complex product which e.g. will include remittance

function.

why? firstly, lots of economies (especially developing countries) get significant GDP revenues due to migrants’

activities abroad. some of them reach up to 30% (in Ukraine it is about 6% which is a huge piece of pie).

secondly, there are a lot of powerful migrant communities all over the world and these communities exist

within developed economies with a certain level of deposit rate which tends to go down

(https://data.worldbank.org/indicator/FR.INR.DPST?view=chart). at the same time migrants’ businesses

sometimes do not want to show real picture of their income flow thus they will find additional tool to invest

with no showing its true income statement as a good one. plus they will be able to get a higher rate due to the

difference of capital cost in e.g. US and third world countries – countries these business owners originate from.

plus remittance function will be provided with capital flow inside a certain country as a credit payback flow

improving cost efficiency. win-win))

the tool is the token (or tokens for different countries/nationalities/professional groups etc.) – if we

speak about the platform as a key player; below you will find alternative “exchange type” model –

with a fixed income rate which is issued by WishFinance (WF) or any other alternative credit union

(again, if the platform will provide such a possibility). tokenization disrupts cross-border factor.

bless it.

SMEs represent the world from which they came and from where their future competition will come. will not.

with 24% rate. main weapon of corporates is the capital – the capital costs too high for majority or even is not

accessible due too many barriers including complexity, collateral issue etc.

there is the biggest bank here in Ukraine “Privatbank”. it has the program of a “direct” investing into SME

(bank provides platform and holds “some” fee; loans turnover is USD 40 mln for the first 8 months of 2017

which is not bad for almost dead economy) – investments came from individuals and enterprises, which were

targeted to get their 25-27% pa. And we speak about “wild west” of the world (Ukraine). if we take some

developed countries where we can find tons of already operating and reliable businesses, which need

operating capital, we will face low competitiveness of our product due to 24% rate. is it about following

Gekko’s parting words “greed is good”? the proposition is to create additional possibility to get extra-money

due to the mechanics of the business:

analytical note on the WishFinance ICO whitepaper

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 28/09/17

payment in favor of loan provider OR THE PLATFORM OWNER (with further reinvestment of “other

people’s money”) should be near-real time with possibility to reinvest the income – it means higher

% pa level due to CUMULATIVE EFECT. mechanics you’ve provided – business/borrower pays out x%

of each transaction – let to proceed with such a near-real time payments and make loan and

investments into loan programs far more attractive and far more competitive.

SMEs often represent their first job, the first step in their career. They are also a first step to the world of

entrepreneurship. True. At the same time SMEs can use WF credit line as a source of crediting their own “good

old” staff – great motivation factor for employee! loan decision is taken by business owner but not a bank –

here we cut expenses (no intermediary) and get a tight contact borrower-lender (employee-employer) which

causes a high level of credit quality. just a nice product and marketing feature.

Slide 5:

card? it is definitely comfortable (and in line with legal-only way of development) to set up some local bank

partner and launch your loans’ flow through it. but will it make your business scalable? local SMEs are fully

able to “insert” money into a turnover – they will need only exchange issue to be settled if we speak about

crypto-based platform with crypto-assets. to solve the issue there could be some third party intermediary

internal market (just temporary one) which makes possible to get loan transfer according to client’s request –

bank account, already existing card, cash payment. these intermediaries will become as solution on “the last

mile”, as additional promo-team or even loan providers.

supporting groups within the business-mechanics – exchange partners, loan providers as a major one – means

multiplying the power of net-effect; these participants are interested to develop the platform utilizing

platform’s competency (mechanics itself, evaluation tool etc.). and this competency could be wrapped in an

alternative way:

whitelable solution or franchise business model will become rocket factor for WF and the sector

in general. the one can use the platform

as a business (to put/collect borrowers and capital owners together having fee as a revenue source)

or to become borrower “hunter” – it depends on the mechanics: to make it possible “to hunt”

borrowers there should be LOAN EXCHANGE developed, where the borrower provides preset data

pool and gets creditor propositions;

as a source of capital (to collect operating capital or small investments through token sales to e.g.

exciting clients – product/service users; there could be a niche product with “expand.me” name for

instance).

it makes business model flexible – more turnover, more benefits and advantages worldwide.

Slide 19:

Our loans vary from $1,000 to $100,000 – page 15 says WF loan bottom line is USD 5 000;

loan amount factor: loan exchange attitude with possibility to tokenize any loan of any size will make it

possible to cut amount factor and let small capital owners to act teamwise, serving more “weight” borrowers

with a lower risk (again. it depends on the way you’ve chosen – is it a TRUE p2p/end2end scheme, or just a try

to build a new way to use corporates’/banks’ capital; definitely the question of crucial importance);

analytical note on the WishFinance ICO whitepaper

author – Andrew Zaichenko (https://www.linkedin.com/in/gnosteek); Ukraine, Kyiv, 28/09/17

both loan providers and borrowers should act through a matrix of preset data (imagine a table with boxes to

enter data on amount, term, payback percentage), while changes within any factor will cause changes within

apr rate (target index); of course client’s history (local credit score) within the platform should be a factor also

and will be inserted into apr formula automatically;

Slide 35:

slide is not correct in terms of visualization: the one can suggest to add “colors” one by one and get a total

sum;

8% P.A. PAYMENTS TO LIQUIDITY PROVIDER – to token holders?

4% insurance – you’ve got your statistics or predictions, ok, BUT why should a client/investor cover each credit

with the same rate? borrowers will have their “karma”(scoring/rating system), will not hey? borrowers with

e.g. 98% “clarity” can claim to pay less then holder of 82% rate – it’s fair play. 0%* - quite good looking digit as

for the total rate (* = 0 insurance fee to be proposed for e.g. +95% accuracy rate holders)! risk will vary from

one country to another, from one ethnical group to another, from one business sector to another. it is flexible.

who is liquidity provider? slide 37 tells us that 65% of ICO amount collected is “lending portfolio”. so as a token

owner will i receive my extra profit of 8%? here is quite subjective opinion but it is not clear how you are going

to pay to your investors (non-institutional) and what will you pay to them for. BTW – it is mentioned that only

SHARES will get profits and dividends.

will TOKENS get the same? seems to be NOPE which is not good. at all.

WF business consists of several companies (or will consist of)… just to share out profits to optimize payouts?

the market will ask itself “is it fair?”. insurance should be near 0-margin part of business (but not a hidden

profits source). will insurance part be transparent also? if the one bought your tokens will he get profits of

crediting activity (8%)? it seems the one should be waiting for 9% part minus expenses…

profitability of the platform/business = 9% + 8% = 17% (gross), which is GOOD + extra-income due to

reinvestment of the flow which consists of live payouts flow form the borrowers.

Slide 37:

Operations in …many countries – what is this about? total mystery. Slide 35 is about HK and SG only (in a

period till the end of 2018)… if “other countries development” is 2019 plan why should investors pay for it

now?

it seems to be all comments for the moment. i would add additional one to the logistics of the process to issue

the loan. assumption is:

1. borrower put his preliminary data to the platform and get preliminary fee according to the provided

data,

2. compliance part takes place (legal docs to check, agreement to be signed),

3. technical part of the process takes place and IT-teams (platform’s, borrowers) proceed with

integration,

4. loan is covered as soon as financial data is confirmed or

loan id put into the platform to make it possible to be invested by creditors (in case of exchange

model).