(+) ICO Analysis: Adel

Adel, on the surface at least, is a highly-polished, well-thought-out project. The token called Adelphoi is but one part of the project’s goals. The project is to be spearheaded by a Board of Directors, as opposed to the usual “foundation” model. According to them:

Adel is a global cryptocurrency community that is self-regulated, self-sustained, and offers its own economic ecosystem with the Adelphoi token. Our community focuses on creating, developing, and implementing use cases involving blockchain technology that covers a wide range of digital and physical industries. Projects are chosen by the community and successful ventures are either re-invested in for further growth or issued as rewards to Adel’s stakeholders.

So it’s a decentralized Kickstarter? So what!

The above is a reasonable reaction. But let’s consider that Kickstarter’s worth is estimated by some to be as high as 1.5 billion. Kickstarter is a closed, centralized platform, which means its growth is limited by such things as staff requirements – you need someone to review the projects submitted and, worst of all, you need third-party payment rails. Kickstarter has never integrated Bitcoin.

This is to say, crowdfunding is an important part of the economy, and it has become more common than VC funding. There have been notable problems with it, such as devices never actually happening and firms going bankrupt before launching a product. But overall, it is a more approachable way for both investors and entrepreneurs. It’s wide open, and on the incline.

Adel has several whitepapers available. Overall, the types of projects it wants to fund with its platform are blockchain-centric. This can mean projects that will interact with Adel itself, or it can mean projects for other blockchain-based currencies. Accordingly, it is capable of interacting with Ethereum, NXT, and a host of others.

The idea seems to be to have a vast community, an actual community, of people interested in investing in new blockchain projects. Those with good ideas will be able to go to the website and propose them. If they pick up traction and are funded, presumably they will have to convert their Adelphoi into Bitcoin, and then into USD, to actually build out their projects. How that will be done is a little vague, as Adel makes little to no mention of moving in and out of Adelphoi.

In any case, the method they are using to build a community is by gradually building up to it. They have a detailed roadmap/plan, which involves creating the website (which exists and is beautiful) and then hopefully growing a community of interested parties through three rounds of an ICO, the first of which starts today, May 1^st. More on that near the end of this article.

Three prospective projects to invest in have already been listed on the website. One is a blockchain for medical records. A prospectus about the medical record blockchain says:

Another idea they are floating is the ability to turn one’s smart phone into a two-way Bitcoin ATM. It’s essentially taking the LocalBitcoins approach but making it more casual, and perhaps easier to use with potentially GPS location and the like. Security is always a risk with such transactions, so it may take a long time for such a project to gain traction. However, this article is not an assessment of individual plays being floated on the Adel platform.

A third project wants to bring blockchain technology to the important aspects of any business, such as keeping track of goods, funds, even personnel. All three projects will be available to invest in when Adel goes live, and presumably others will be added as the community grows. The fungible exchange rate of Adel will therefore be important, which plays into the relative safety of the project as a whole for investing. One example of how this could be bad would be if you made an investment at a time that Adelphois were exchanging for, say, 30,000 Satoshi each, but by the time your investment matured the coins were down in the single thousands. This would essentially mean that even when you won, you lost. It’s a problem faced in other peer-to-peer lending sites like BTCJam, as well. Borrowers give themselves 90 days to repay and do, but the lenders see a significant drop in the value of Bitcoin during that time, for instance.

And with crowdfunding, there really are winners and losers. Traditional VC and angel investors typically go for a chunk of the whole pie, so when the rare unicorn firm flourishes, they continue to be enriched by their wise decision-making. Many times with crowdfunding, a piece of the pie is just not in the cards for the investor. Thus, you make your money back and hopefully some profit, but then if the firm takes off, despite never having been able to take off without you, you’re left grounded, searching for another investment opportunity. On the positive side, most of these problems are not unique to Adel.

Who is Behind Adel

As a self-regulating and self-sustaining macroeconomic ecosystem, Adel will utilize the benefits of a decentralized technology and community. The decision making process will capitalize on the community’s knowledge to collectively make the best decisions possible while maintaining strong integrity, ethics and business principles as overseen by the Adel Board.

Founder Michal Vavrek has worked in a number of financial capacities, including FOREX.com in multiple capacities, since he graduated from Indiana University with a degree in International Finance in 2007. His profile says he is “an active cryptocurrency entrepreneur seeking new opportunities that maximize blockchain technologies.” It appears he came up with the idea of Adel in order to have more opportunities to invest in blockchain stuff. It’s a new reality that people with no in-depth technical background are founding, funding, and building cryptocurrencies and crypto-related projects. This is the nature of dealing in technologies that are centered around the transfer of value: all kinds will come. One problem with this, of course, is that Mr. Vavrek may oversell the product at various stages or be unaware of problems with it that may exist at launch. In a moment, let’s see who is in charge of development and weigh that against the large number of non-technical people also on staff.

Also serving on the board of Adel is co-founder Gabriel Dusil, a salesman by nature who recently built this cool computer:

Dusil has an engineering degree from McMaster University in Canada. From the looks of it, he has trademarked the words “Oak Case Mod” in regards to the above computer, and runs a company called Euro Tech Startups which helps European technology startups with recruiting and managerial issues like business plans.

Rounding out the three-man board is Jan Lamser, a banker and technology enthusiast who advocates for cryptocurrency in Eastern and Central Europe. If you are from that region, you may recognize him from giving a speech at the Zlata Koruna (Gold Crown) conference a couple years ago, as seen here:

That website has one post about Bitcoin that comes up from 2013, and unlike many traditional financial advice websites of that period, it’s very positive:

In the long [run] Bitcoin makes sense. Individuals can now only watch currency wars and the weakening of local currencies due to the monetary policies of central banks. Through inflation, the devaluation of savings of the population on which the expense is ultimately funded by the state. About Bitcoin or other virtual currency in the event of their growing success in the future will bring fight. [Translation by Google.]

Heading up the integral backend development of Adel is NXT veteran Daniel Backman. Backman’s Github profile offers several NXT-based innovations, including a C# implementation of the NXT application programming interface. This experience with NXT is vital to the creation of the Adel platform and should be comforting to potential Adelphoi investors.

Perhaps a red flag is the addition to the development team of “Robert,” a “a full-stack software professional with a solid academic background” without a last name and therefore no previous work history to go on, who allegedly graduated from Carnegie Mellon at some unknown point. This weird little bit of information is problematic, but could simply be an oversight:

Leading security is one Dr. Jiří Bartoš, who has spent a long time in the IT security world and is well-published as such. Here is one free example we were able to uncover, authored with two others regarding “Mandatory Access Control Policies Based on Vague Requirements.” Security is of almighty importance in cryptocurrency, and it is good to see they’ve got a solid leader in that category, at least.

Much of the rest of the team is either lawyers, salesmen, or financial people. This is disheartening because what we want to see is a lot of developers, code monkeys, and people who have a very strong technical grasp on what they are doing. Otherwise, problems are more likely to arise. One hopes that if the project is at all successful, this situation will change. It takes all kinds, sure, but when you’re launching an extremely complicated software platform, you want to ensure that the bulk of your talent is aimed in that direction.

Investment Details

The first round of the ICO is about to begin, on May 1^st. A total of 33,333,333 Adelphoi tokens will be issued during the first round, and an additional 66,666,666 tokens will be issued during the following two rounds. Interestingly, the price in the second two rounds will be determined by the value of the first round. Other details are relatively unclear, such as how purchases are to be made. The author attempted to sign up for updates, but was informed that his three valid Gmail.com e-mail addresses are in fact invalid:

Nonetheless, there is good information in the terms and conditions. Minimum investment will be the equivalent of .03 BTC (~$40) and can be done with any cryptocurrency that Shapeshift or Changelly accept. The actual investment will take place through the NXT platform, with users being able to generate NXT addresses to fund once the ICO launches at noon UTC on May 1^st. A special section of the website will then be apparent.

The Verdict

Adel and Adelphoi are getting a 4.9. For all the polish, fancy whitepapers, and the like, there are a number of significant drawbacks to Adel which lower its rating.

1. It is far from alone in this market of cryptocurrency crowdfunding. Those with interesting Blockchain ideas might be wiser to go with someone like BTCJam, and are likely to continue doing such for quite some time to come. At BTCJam they would not have to worry about the stability of the Adelphoi token, only the stability of Bitcoin, which is a significantly different worry.
2. This “Robert” issue outlined above needs attention. You’re asking people to throw millions at you. It’s hard to reconcile that this lack of a last name or any real information about the man was a mere oversight when so much attention to detail is displayed elsewhere. Crypto pioneers likely remember “Big Vern,” of Cryptsy fame, who mostly went by that name. His actual name was Paul Vernon and he exited that exchange with a lot of people’s money in hands – though he claimed it was all stolen months before. We must be cautious with these new opportunities, and issues like this are not to be taken lightly.
3. What they are doing can be replicated by a much leaner team. One simply would need to fork a platform like NXT or, really, any crypto platform, and build a “community” around it plus allow for the submission of ideas. In a way, because the asset itself is totally new, it’s reminiscent of Chuck E. Cheese – you come in and buy your currency, but you most likely would have to play a long time to get your money’s worth in prizes. Issuing an Ethereum or NXT asset directly, instead, might have been a more legitimate approach, because then investors would have an easier exit.

None of this is meant to say that Adel is necessarily a bad investment. The author feels as if he is a traditional banker looking down on Bitcoin in the early days. It would be wise to keep it in mind, but potentially unwise to invest at the outset. Allow them some time to develop the platform, and perhaps some real money could be made from some of the projects that are going to be getting their funding through it.