Important Dates: Q1 2018 – Token sale to begin
Number of Tokens: 100,000,000 GOT
Cap: TBD
Token Type: ERC-20 token built on the Ethereum blockchain
What is GoNetwork?
GoNetwork is creating a low-cost, low-latency and scalable network for Ethereum that it hopes will be used by mass mobile, desktop and web platforms.
What is the problem GoNetwork wants to solve?
Scalability is a huge concern now with the Ethereum network. If games such as Cryptokitties can clog the network, how can applications designed to process 100s of transactions a second be built on the blockchain? That’s where off-chain scaling solutions come in. GoNetwork’s solution solves this problem by allowing off-chain transactions.
An off-chain transaction is a transaction that takes place off the Ethereum blockchain. The reason why this method of making a transaction allows more scalability is because multiple transactions can be aggregated off-chain and then sent on to the block chain as a single transaction. The diagram below from the whitepaper helpfully visualizes how GoNetwork will aggregate transactions.
What is GoNetwork’s Business Plan?
The whitepaper for GoNetwork is full of fluff. What does the paragraph below mean?
What started as a multi-billion dollar platform on internet, is now becoming a reality for the mobile ecosystem and commerce at large. Although we have years of work behind us, there is a long road with clear objectives ahead. We are going through an amazing, transformative period in history — a technological revolution — the opportunities are endless and extremely exciting.
While there is a lot of fluff, I do commend the team for including a sizeable section in their whitepaper about their business strategy. This is something many ICOs wholly lack in their whitepapers.
GoNetwork plans to use its network to start a virtual goods exchange platform for Infinidy mobile games (Infinidy is game developer founded by the GoNetwork CEO). They also plan to launch a debit card that can use the currency. They also plan to ‘evangelize [their] platform worldwideand look at potential partnerships with governments and organizations interested in applying blockchain to various parts of their infrastructure.’
In terms of milestones, according to the roadmap below GoNetwork plans to launch a beta version in Q2 2018 and then plans a global expansion in Q4.
Slow down! While I respect ambition, plans should be simple before scaling up to take over the world.
ICO
Token Utility
Opening or closing a link between the blockchain and GoNetwork’s aggregation service requires a small transaction fee that is paid in GoTokens. As the on-chain fee is shared over multiple off-chain transactions, the fee per-transaction is significantly lower.
The Team
The team is full of hubris after their win at an Ethereum conference in Waterloo. It is displayed very prominently on their website, perhaps a bit too prominently.
I also feel that the team’s qualifications are being overplayed here. For example on Rashid Khan’s profile (the CEO), it says he founded Infinidy Games “one of Canada’s leading game studios.” I’m not sure how we can call a studio with eight employees (as per Linkedin) ‘leading’.
Hype
GoNetwork has over 25000 people in its Telegram channel, which is remarkable. This is likely because Ian Ballina is an advisor. Ian Ballina is widely followed by many in the ICO space and has many followers on social media.
Competition
Sharding: ‘Sharding’ is a technical term for a scalability improvement that is currently being worked on by the Ethereum team. In a ‘sharded’ blockchain, scalability is much higher because the blockchain split to create multiple mini-blockchains that link together. This greatly increases on-chain scalability and makes solutions like GoNetwork redundant.
Raiden: Raiden is a scaling solution for the Ethereum network that has an ICO in October 2017. It uses a similar concept to GoNetwork for scaling transactions, via aggregating multiple transactions off-chain and sending a single transaction to the Ethereum Network.
Risks
While doing due diligence for this project, I discovered some worrying things. There is a group that does ICO due diligence on Gihub, and they uncovered some problems with GoNetwork which I will outline.
- There is a problem with the company registration and the team was evasive in answering questions. Further searching confirmed that GoNetwork was not registered as a company as claimed by founders, but there was another company registered in their name.
- No code committed to Github in over two months (which means that it is questionable whether anyone is doing any work on the project)
- An obsession by Xun Cai (the COO) over earning money
Taken together, the issues outlined above reveal a team that is more concerned with winning and getting rich than building a sustainable business. Dismissing investors and stopping work on a product after winning a competition are not things I want to see in a project.
Scores
Fundamental Indicators
Concept: 4
While competitors like Raiden have already launched similar products, GoNetworks emphasis on mobile payments and gaming is welcome and unique.
Token Utility: 4
Having a token in this business model makes sense and reduces friction in payments. In addition, by not using Ether, they are able to design a token with additional use cases (such as the debit card mentioned in the white paper)
Status: 1
While the roadmap shows that the Alpha has been launched and Beta is expected in Q2, GoNetwork has not updated their Github page since October. What have they been doing since then?
Team: 0
Despite the seemingly good pedigree of the team, I cannot give a positive score to anyone that says stuff like an ICO is “all about MONEY”. No, an ICO is not just about money. It is about supporting your business and building a community where everyone wins, not just the founders.
Competition: 3
Raiden has already ICOd and is further along than GoNetwork. Sharding solutions are also actively being worked on by the Ethereum core team. GoNetwork will need to catch up if it wants to be successful.
Strategy: 3
Too far, too fast. The GoNetwork team should scale back its global ambitions before building a sustainable product.
Technical Indicators
Market Cap: N/A – has not been announced. An acceptable market cap would be around $20-30 million.
Hype: 5
The hype is off the charts for this ICO. It will sell out instantly (assuming the allegations raised above do not make investors have second thoughts).
Investment Horizon
Short Term: Due to the buzz behind this project, it is possible, even likely that this will be a good flip. But buyers need to be aware of the high risks of doing this
Long Term: If an investor buys this, do it for the flip. While I don’t believe GoNetwork is a scam, at the very least the people running the company are reckless and unprofessional and this does not bode well for future company success.
Conclusion:
Overall Score: 2.9
While I like some aspects of this project, there are too many red flags for this to be an acceptable target for investors. Unfortunately, there are many poor ICOs in the crypto space with the lesson being that everyone needs to do due diligence prior to investing.
