Gems ICO Review – The Protocol For Decentralized Mechanical Turk

Important Dates: Q1 – Token Sale

Number of Tokens:  TBD – announced in January

Cap: TBD – announced in January

Token Type: ERC-20 token built on the Ethereum blockchain

Token Symbol: GEMS

Whitepaper: https://gems.org/whitepaper.pdf

What is Gems?

Gems is a protocol for contracting workers to perform micro tasks. Workers stake tokens in order to prove validity of their tasks and earn a reusable computed trust score, enhancing the cost-efficiency of the network while democratizing access to scalable micro task workers.

Micro Tasks are described in the whitepaper as: Micro tasks are small tasks that require human judgment, can be completed independently over the internet, and are part of a larger united project. Micro tasks aid organizations that need humans to complete tasks computers otherwise cannot.

A good example of a micro task would be tagging photos for specific content. This is a task that is still beyond the capability of AI, and thus requires human intelligence to perform.

What is the problem Gems wants to solve?

According to the whitepaper, Gems aims to solve the following issues with the microtask industry:

  • Removing the middleman taking a large fee: Current middlemen take fees of up to 25% for each task.
  • Verifying accuracy of results from crowdsourced tasks: Currently this is done by having up to 15 people perform the same task in order to verify accuracy
  • Supplying and building reusable interfaces: Currently requesters have to build their own under interfaces
  • Removing the need for existing banking infrastructure: Those without bank accounts are unable to receive payment for tasks, thus limiting the supply of workers

What is Gems’s Business Plan?

As far as I can tell there is no business plan for Gems. The whitepaper is very academic in nature and does not touch or marketing, partnerships or any plans for attracting customers. The team did publish a roadmap on their blog which indicates the project is currently in alpha and that the full product will be released after completion of the token sale. Presumably this would be in Q1 2018.

ICO

Gems is only whitelisting people for its ICO who have contributed in some way to the community. There are plans to publish full crowd sale metric in mid-January.

Token Utility

Payments will be made in Gems tokens to miners (those who complete tasks) and verfiers (those who verify the work completed by miners is accurate). In additional miners and verifiers will be required to stake some token when doing their work. This ensures they have an incentive to do a good job. Requesters will also stake tokens. Those that do bad work will both lose their stakes and suffer a reputational decrease, which will make it more difficult for them to complete work on the Gems network.

The Team

Gems is run by a team of two brothers who both went to Harvard. One of them is a Thiel fellow. These are obviously very smart people, but they are also very young and a team of two needs to expand for a business to develop.

Hype

Gems has over 10000 people in its Telegram channel, which is a very good number, especially as there has been zero marketing for the project.

Competition

MTurk: MTurk is a marketplace run by Amazon for work that requires human intelligence. Tasks can range from clicking a link, going to a webpage and annotating an image, to completing a survey.

Crowdflower: Crowdflower is more geared towards enriching AI data. It uses humans to perform micro tasks and compare human completed data versus ai completed data. This helps improve machine learning algorithms.

Risks

Team: This project is a team of two college dropouts. More people with more experience are need to make this project a success.

Strategy: There is no information on how the team will market its product and create partnerships.

Scalability: This always comes up on any Ethereum based ICO. When transactions cost about $0.60 each for small amounts the economics of using the blockchain for payments don’t look so good. The Gems team should seriously look at alternative blockchains for their project.

Scores

Fundamental Indicators

Concept: 5

I am not aware of any other projects that are looking at the exact same problem as Gems. In addition, the problems with current microtask platforms are well-suited to being solved by a decentralized platform based on the blockchain.

Token Utility: 5

Gems has innovative use cases for its tokens that ensure that its platform will remain decentralized. The Gems model is unique and represents a great model for how decentralized platforms can cut out middlemen.

Status: 4

The project seems to be quite far along with a useable product released in the next few months.

Team: 3

Clearly the two brothers running Gems are brilliant, but there is not much of a support team at this point. The good news is that Gems is currently hiring engineers to build the platform. However, there will need to be some further hires in order to get this project off the ground.

Competition: 4

The only real competition here is from established players such as Amazon. If Gems is able to build a platform that does what is promised, it should be in a strong competitive position

Strategy: 0

As there is no information on strategy, I am unable to score this category.

Technical Indicators

Market Cap: N/A

The team has not indicated how much money will be raised. Anything under $30 million is acceptable. Anything over and I would steer clear.

Hype: 5

Despite having basically no marketing, Gems has attracted a high amount of interest in its project.

Investment Horizon

Short Term: As the hype for Gems is very high, I am consequently very bullish for the short term potential of this project (subject to final token metrics such as the market cap being reasonable). In projects such as this, investors are only able to invest a small amount of money in the project, thus creating unmet demand that can only be met on the secondary market.

Long Term: The long term view is more mixed. While I absolutely love the project concept, the lack of a business plan is worrying and I doubt that two recent university dropouts from can execute this project on their own. They will need serious help, and there is no information on how this will happen.

Conclusion

I really like this project and it has tremendous potential. However, there is complete lack of business plan or road map and it is unclear how long this project will need to generate income. That being said, the crypto market is irrational and rewards potential. This project certainly does have potential.

Overall Score: 4

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