Airswap ICO Review – AST Investment Analysis

 

https://www.airswap.io/

ICO Details

Symbol – AST

WhitepaperLink

When – October 10th 2017

How to Participate – ETH will be accepted in the sale.

Soft Cap – None

Hard Cap – 42’000 ETH

Total Max Market Cap At ICO – 150 Million USD

Exchange Rate: 1 ETH = 1’000 AST

Total Tokens in Circulation At ICO – 500 Million AST (300 Million Circulating)


Overview

AirSwap is a token exchange platform primarily used to convert and trade Ethereum based assets between parties. 2017 seems to be the year of decentralized exchanges, and with AirSwap, we have yet another entry in what seems to be the staging of a move away from current exchanges such as Bittrex, Poloniex, and others.

AirSwap’s goals are to do as much of the trading as possible off-chain in regards to negotiation of prices and deciding with whom to trade, while settling these trades on-chain with atomic swaps between tokens. AirSwap is faster than a blockchain-only based exchange due to the fact that orders and values don’t need to be put into Smart Contracts on the network before being able to be executed. You don’t need to broadcast to the network that you’re looking to sell some Swarm City tokens (thereby paying a gas fee), but instead do most of this work off-chain and only use Ethereum to finalize the trade.

AirSwap offers advantages to traditional trading on exchanges such as Etherdelta in that it lowers gas prices overall, as you don’t need to pay a fee to list, cancel, or change orders, as well as providing faster updates when compared to the Ethereum network.

AirSwap’s closest competitors could be considered Kyber Network (as they have a very similar concept) and 0x (who already have a platform up and running).

We present a peer-to-peer methodology for trading ERC20 tokens on the Ethereum blockchain.

First, we outline the limitations of blockchain order books and offer a strong alternative in peer-to-peer token trading: off-chain negotiation and on-chain settlement. We then describe a protocol through which parties are able to signal to others their intent to trade tokens. Once connected, counterparties freely communicate prices and transmit orders among themselves.

During this process, parties may request prices from an independent third party oracle to verify accuracy. Finally, we present an Ethereum smart contract to fill orders on the Ethereum blockchain.


Team

airswap-don-mosites

Don Mosites

Don is a serial entrepreneur, product designer and full-stack engineer with more than a decade of experience building products for companies small and large including Google and Zynga. He is a graduate of Carnegie Mellon and originally from Pittsburgh.

JoeLubin2

Joseph Lubin

Joseph is the co-founder of Ethereum and is the founder and CEO of ConsenSys. Prior to Ethereum he had a career in computer vision and finance. He holds a Bachelor of Science in engineering, electrical engineering, and computer science from Princeton University.

Sam460px1

Sam Tabar

Sam has 17 years of experience in the finance industry. He was a partner to FullCycle, a private equity social impact fund. Before that, he was Head of Capital Strategy at Bank of America Merrill Lynch based in Hong Kong. He helped build Sparx, the largest asset manager in Japan. He started his career in New York as a lawyer for Skadden, Arps, Meagher, Slate & Flom. He is a graduate of Columbia Law School and Oxford University.
AirSwap-Bill-Tai

Bill Tai

Bill is a veteran venture capitalist and entrepreneur. He has invested in over 100 start-ups and was a board member of 7 publicly listed companies he funded. He is the Head of the Strategy Committee and is a lead investor & board director of BitFury, the world’s largest Bitcoin Blockchain company. He is a graduate of Harvard Business School.

Positives

 

air2

AirSwap has a great concept, and this can be attested to by the amount of competition that has come from world-class teams as of late in the decentralized exchange space. The ability to trade tokens more quickly and efficiently makes plenty of sense, and is one of the main things holding users back from outright abandoning centralized services and web sites.

The Ethereum network has proven itself to be an economy all its own, and while it may not necessarily be as large as Bitcoin, it has mountains of dapps, tokens, and services that all exist on the network – creating a service specifically catered toward the Ethereum infrastructure is sure to get use by the many third parties and interests that use the network.

Finally, AirSwap itself has a world-class team that should not be discounted. Joseph Lubin and Bill Tai are the real heavy hitters of the AirSwap project, and it’s a rare pleasure to see a team with such a stacked number of experienced and successful professionals undertaking a project of this scope. They truly are in league with such projects as Kyber with regards to the strength of their team and their ability to create results.


Negatives

One of the negatives of the AirSwap project is their use of oracles for their system of deciding token prices – while this is an optional feature, I expect this will be one of the cornerstones of the AirSwap service that will simply make it far more robust that it already is. The main issue here is that AirSwap is rather vague with specifics in regards to what oracle solution they will implement, and looking over their Whitepaper gives the impression that not even they are exactly sure of how they will tackle this problem. With all of the benefits of these kind of systems, AirSwap gives no mention to the drawbacks of oracle bribing and the possibility of altering price data to give a more advantageous trade to a third party.

One of the benefits of moving negotiation off-chain is to make sure that miners aren’t privy to trade information (bids, asks on etherdelta for example) before other traders thus giving a first mover advantage; however, I personally have never heard of this kind of story, and even if it was true feels to me like an edge case. AirSwap will have to demonstrate that their system truly is superior to current solutions today, as well as existing solutions (such as 0x) that are already up and running compared to AirSwap. Put simply, they don’t have a first mover advantage for their concept.

The indexer is stated to be one of the services that gives AirSwap it’s special sauce – the ability to take many bids/asks and match them accordingly, as well as sorting them out and forming an orderbook of sorts. While this is a great service, AirSwap has stated that you won’t require any kind of purchasing of AST tokens in order to use their indexer – if the goal of moving transactions offchain is to equalize information to all parties and give everyone a fair go, why not simply use the AirSwap indexer and not bother with AST tokens at all? They also don’t mention many use cases for their AST tokens other than funding their project.


Conclusion

I’ve saved the final negative for the conclusion here, because I think it’s worth mentioning and absolutely destroys this project – with 0x we had a crowdsale that was capped at around 50 million and Kyber capped at around 60 million. With AirSwap, it seems the boundless greed of their project has given the AirSwap team the impression that their project is somehow worth more than their competitors combined. They are looking to raise something in the neighborhood of over 150 million dollars, which is absolutely insane considering there’s literally no need for this amount of money when other teams have done it with far less.

I can’t with good faith buy or recommend a project that is looking to raise such an inordinate amount of money when other projects in the space exist (that are production ready no less) at much lower price points. It doesn’t matter how good your team is if you’re this willing to burn investors and buyers of the hype. A definite skip.

Investment Grade: 50%

11 thoughts on “Airswap ICO Review – AST Investment Analysis

    1. Presale buyers got a good discount for the tokens – Put simply, AirSwap is selling 150M Tokens for 150K ETH. Their total tokens is 500M which would mean at public sale prices AirSwap will be worth 500K ETH.

      500K ETH = 150M USD

      Like

      1. Definitely always several different ways to look at the funding and valuations of ICO’s – no one guess is really accurate until coins are trading and in circulation

        Always a challenge to find the proper medium between valuations of projects!

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  1. you’re wrong about the market cap and what they’re trying to raise as has already been pointed out to you. its not a matter of perspective but, rather, just basic reading and math.

    Like

  2. your math is still way off there buddy

    listen i don’t care one way or another about this ICO but you have a responsibility toward being intelligent if you’re going to run a site like this otherwise it amounts to FUD

    Liked by 1 person

  3. I’m a pretty huge fan of this site and I have agreed – for the most part – with most ratings provided on this site, but I was really surprised to see Airswap graded at 50%. If Airswap ends up performing really well, it’s going to make this site look bad. I think the rating was a bit harsh. Just sayin.

    Like

  4. Dear all,

    Please, bear in mind that the AST neither represent the the stake in AirSwap business, nor does it give the voting voice to the holder. The AST’s value doesn’t represent the value of company. The AST is just “the membership ticket on the trade exchange”. This is just a utility token, isn’t it?
    Similarly, when you go to a casino – you exchange your cash for chips to make bet. But, the amount of chips distributed amoung the crowd of gamblers (who can use the chips for making bet solely) doesn’t represent the value of the casino.
    Based on the nominal value of the AST (not counting pre-IPO discounts) AirSwap proceeds from the IPO = 150kETH, or 45mUSD.
    40% of the 500M total supply is frozen for 6 months and there is no info how it can be used.

    Like

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