Luckchemy ICO Review – LUK Investment Analysis

Website: https://luckchemy.com

Whitepaper: https://assets.luckchemy.com/docs/lc_whitepaper.pdf

Overview

Luckchemy is a gambling platform utilizing the Ethereum blockchain and off-chain cryptography to host a full suite of casino/gambling products. This scalable, provably fair, legally compliant platform will also offer White Label, turnkey solutions for different game providers and platforms. The initial focus will be on lottery, powerball, scratchers, sweepstakes, slots, and poker.  Luckchemy only interacts with the blockchain when necessary to keep the games provably fair, while keeping most transactions off-chain to maximize scalability.

Luckchemy Tokens (LUK) can be used on the platform to play games, participate in the Holder’s Draw, vote in the Feedback Polls, grant 3rd parties API access and White Label solutions. The LUK tokens are designed to provide long term utility and value for holders and players. Luckchemy has a demo available on their site and a very detailed roadmap aiming for a Q3 2018 public platform launch with many additions to be implemented in the following months. Luckchemy is registered in Gibraltar and is in the application process to secure a Curacao license. The platform will be fully compliant in this market, including KYC/AML requirements.


Platform

Luckchemy Platform’s functionality can be broken down into two categories, Games and 3rd Party White Label.

Games

Daily Lottery – Players pick five numbers between 1-47 and one between 1-24. A public draw selects the winning combination of 6 numbered balls and rewards players. Luckchemy’s daily lottery will offer the best returns in the industry at a 99% return to player, which is far higher than traditional lotteries.

Scratch Cards – Scratch cards are a prevalent form of gambling because of instant wins. Scratch Cards, as well as similar instant games like slots, dice, etc., can not be reliable on blockchain due to speed limitations, Luckchemy came up with the real-time, scalable and off-chain logic to solve this problem.

Free-to-Play Sweepstakes – Free-to-play scratch cards with the chance to win real prizes. Revenue will be generated via ad monetization with the potential to add in-app purchases in the future. Sweepstakes offerings allows Luckchemy to publish and advertise in additional regions (including the US app stores), due to lower regulatory requirements than real money gambling.

Holder’s Draw – All LUK holders will be automatically involved in a monthly draw, funded by a minimum of 0.5% of wagers placed on the platform during the previous month. Holders will be entitled to 1 entry per token owned, meaning the more LUKs a holder has in their wallet, the higher their chances of winning are. LUK prize pool tokens and vesting tokens for partners and founders will not be eligible for this draw.

And More… – Luckchemy plans to add Sports Betting, Online Poker, Live Dealers, Online Casino, Slots, and Bingo to their platform in the future.

All Luckchemy games are built around replenishing cycles of tickets funding prizes,
while also driving comprehensive marketing campaigns and monthly holders’ draw. The
Prize Pool is initially funded from the ICO and will be constantly replenished through
ongoing bets, wagered on the platform. This will ensure fund sustainability in the future,
even when large jackpots are won.

 

3rd Party White Label

The Luckchemy team will develop API in order to provide provably fair games for
gaming operators with one single API and CMS that allow the customization of games on-the-go. This will be a turnkey solution that can be easily customized when running a legal casino and used by any game operator willing to work with cryptocurrency markets. In the typical white label gambling partnership, there is a marketing partner and a gambling partner.

The gambling partner (Luckchemy) requires an operating license whereas the marketing partner generally does not. Luckchemy will partner up with companies that can market the gambling product using their unique brand and in return, pay the marketing partner a profit share of the generated revenue. This is similar to an affiliate deal. The marketing partner usually has a well-known brand identity, so the new customers are acquired through the brand’s website. In return, the marketing partner is paid a higher amount than an affiliate.


The white label gambling provider (Luckchemy) is responsible for, amongst other things:

  • Registering the customer and conducting age verification and KYC checks
  • Providing the product for customers to gamble on
  • Managing customer funds
  • Securing confidential customer details
  • Providing customer support for the gambling product
  • Holding the appropriate license for the type of gambling product that is made available to customers.


Revenues are generated according to a licensing model based on revenue-sharing with
customers. Customers (the gaming operators) pay a monthly license fee to Luckchemy,
which is based on a certain percentage share of the gross game win that is generated
in the customers’ online casinos. Luckchemy takes responsibility for all technical
operations such as monitoring gaming transactions for its customers, known as hosting,
so that the operators can focus on their core operations.

Luckchemy also plays an active part in the integration work for new customers. Luckchemy will work with gaming operators via smart contract that will validate the agreed shares and instantly deliver them to a gaming operator. And provide assistance with cryptocurrency exchange if required. White-label casinos will operate with LUK in order to pay licensing fees, receive revenues in LUK tokens, and exchange it for the currency inside the platform when needed.


Luckchemy Token (LUK)

LUK will use Ethereum ERC-223 token standard, having increased security, efficiency and utility compared to ERC-20. The distribution of LUK is designed to be equitable and scalable. Maximum of 1 Billion LUK will be issued. All unsold tokens will be burned. The sale of LUK will be used primarily to fund the lottery and drive marketing & user acquisition to Luckchemy platform.

The system assigns a unique identifier for each token. All transactions within the platform are virtual, which means players won’t have to pay gas for transactions while playing games. As an investor, you will not lose anything when making small and frequent transactions.

As a user, you can use LUK tokens to play games on the Luckchemy platform. By holding LUK tokens, you are automatically selected to participate in Holders’ Draw lottery. Tokens can be exchanged for ETH at any moment. Your reward will be paid out to your wallet right after the game round is finished.

LUK Tokens will grant 3rd party White Label users access to the Luckchemy API once it’s released, granting the ability to implement games on other platforms or websites.
LUK tokens will be used for transactions between partners. In addition to that, some extra services of the platform can be paid with LUK token.

One full LUK equals one vote. Holders sign a message containing their preference (e.g. Slots), hashed with their private key to prove custody of the LUK address and rights to the corresponding token votes. All customers will be able to send their suggestions and feedbacks to the Luckchemy team via a form on the website, and all hashes will be publicly available and verifiable by such services as https://etherscan.io/verifySig.

Tokens are multifunctional; they can be used to play any game within the Luckchemy
platform, or kept aside to participate in Holders’ Draw and Feedback Polls. Tokens are backed by assets; one of the essential assets is bankroll, which will be constantly replenished and eventually grow in size. By using LUK tokens, the 3rd parties get access to technical solutions and benefit from them on their own platforms. White Label solutions will enlarge the Holders’ fund, which will increase interest and turnover of the LUK token in general.


Token Sale

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The Team

Company LinkedIn

The Luckchemy is a team of product development and gamification enthusiasts. They met through collaboration on a variety of products that gained fame in the ad and gaming space. They combined their talents to build Luckchemy. They started shaping the Luckchemy product in February 2017.

The team is rather large and seems to have a lot of experience in the gaming industry. There are members of the team experienced in game design, marketing, and software development. They leadership positions have had leadership experience, although not at any blue chip companies.  I could not find any real All Stars that stood out, but they all seem very capable of pulling off what they intend to accomplish. Not a strong team by any means, but they have proven themselves in the past.

 

The Advisors

Adam Krejcik

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Digital and gambling industries expert

  • 10+ years experience of market and equity research in the global interactive entertainment industry
  • One of the top “40 under 40” by Global Gaming Business Magazine in 2015
  • Adam is a highly experienced professional, defining the vector of development for digital & interactive gaming industry. He is one of a very few persons, who is widely recognized by the whole gambling community.
  • Serves as a trustee of the International Association of Gaming Advisors (IAGA)

 

Patrick Roberts

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Blockchain technology and cryptocurrencies

  • 5 years experience in cryptocurrency and blockchain technology
  • 10 years experience in Intellectual Property and innovation
  • Patrick has a deep knowledge and experience in crypto and blockchain technologies, markets and communities.

 

Chris Grove

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Gambling industry strategist

  • 10+ years of experience in the iGaming industry
  • Publisher of two trade publications, OnlinePokerReport.com (regulated U.S. iGaming) and LegalSportsReport.com (legal online sports wagering)
  • Owner of iGaming consultancy GroveIG
  • Regularly cited by mainstream media, financial institutions and policymakers

 

Todd Eilers

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Principal & Head of Gaming Equipment Vertical

  • 15+ years of market and equity research experience primarily covering equipment and technology providers within the casino gaming industry
  • Created and developed the gaming industry’s largest slot survey in partnership with Fantini Research, which serves as highly valuable and actionable tool for both gaming investors and industry professionals
  • Todd helps Luckchemy team with market analysis in order to get deep understanding of industry trends.

Roadmap

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Conclusion

Luckchemy is an interesting take on gambling on the blockchain, which is becoming a fairly competitive market. By using off-chain cryptography, and only using the blockchain when absolutely needed, this platform has an advantage in scalability.

I like that Luckchemy has a wide range of customers and tries to appeal to businesses and consumers alike. The White-Label turnkey solutions side of Luckchemy could amplify adoption of the platform and use of the LUK token. The incentives to hold, the velocity of returning 99% of tokens to users, and the ability to use the token to vote on future plans for Luckchemy create great tokenomics.

It is always nice to see a project selling 70% of tokens. The roadmap is detailed and loaded with many milestones in a rather short time-frame, public launch in Q3 2018 could possibly create quick returns for investors. While the team does not stand out as an all star team, I believe they may have what it takes to accomplish their goals with the help of the strong set of advisors.

The success of this project will rely on the fruition of their marketing strategy and ability to establish partnerships, expanding the business-facing side of the company.

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