ICO Status: Upcoming
COLU, or the ‘Colu Local Network (CLN)’ is a payment system for everyday transactions based around the CLN cryptocurrency wallet. Consumers are able to pay for things using their COLU wallet with participating merchants. COLU has been in operation since 2012. They released their mobile wallet in January 2017. Since then, COLU has been adopted by over 700 merchants with 100,0000 users generating over 70,000 transactions each month.
COLU’s focus is on communities supporting their local economy by spending locally. In simple terms, COLU users are able to pay for goods and services using their COLU wallet in places where it is accepted by merchants.
The COLU Local Network (CLN) will enable communities to create their own ‘local currency token’ which will be pegged to the parent CLN token. Both merchants and consumers can be rewarded for transacting using this local currency, with future scope for merchants to develop adoption and loyalty by offering local tokens as rewards for usage as well as special offers etc.
One of the coolest things about COLU from an ICO investing perspective is they are an existing company with existing product that is already live in market and being used by real people; and it’s beautiful!
The COLU app has two parts: the Business App and the Consumer App. In addition to wallet features, the consumer app also provides users with recommendations and special offers. This makes COLU interesting and different to other cryptocurrency wallets because these forms of social proof and discovery have already proven to be of value across platforms like Facebook & Groupon. It would be useful to see more detail from COLU around exactly how these features will work, and what their roadmap looks like for building out the social side of the consumer app.
This side of the app is for merchants. It allows them to accept payments in local cryptocurrencies and to use these funds to purchase from other local businesses or to withdraw and convert into fiat currency. The business app also comes packed with an array of marketing and reporting tools.
This team is large with over 40 full time staff comprising the full range of skills and experience needed to make a venture like this succeed. CEO Amos Meiri has run the company for the last 3 years. Prior to COLU, he was the Head of Dealing at eToro. And of course it’s hard not to be impressed by seeing Dan Ariely, famous author and Professor of Behavioural Economics at Duke University listed as a co-founder! COLU scores big points from a team competency perspective.
As an established business with dedicated staff, COLU widens the divide further between ICOs from 2017 and ICOs in 2018; the key difference being that 2018 is seeing more companies join the cryptocurrency space with an existing product, team, and go-to-market strategy – not just a whitepaper and a bunch of volunteers fuelled with ideology. At decrptd we think that ‘when the crash happens’, companies without infrastructure and dedicated teams will die first.
Just when things were going so well…. The roadmap resembles a barren, featureless desert! It never ceases to amaze me that companies pitching their ICO don’t seem to understand the level of detail people want and need in order to reach a postive decision to invest! When assessing an ICO, you need to make predictions based on the real-world use and adoption of the proposition; and a large part of this decision requires detailed information on the roadmap. What barriers lay ahead? How will they be overcome? And crucially, when am I likely to see a return on my investment?!
As you can see below, the COLU roadmap only covers Q1 FY18 and provides nothing in the way of tangible detail to help investors understand what’s coming and when. This is disappointing – especially given the degree of ambiguity surrounding the CLN, the creation of community tokens, network fees, and social functionality. But maybe we don’t “need to know”; after all – the product is live and the plan is pretty clear: spread adoption.
COLU are launching with a maximum of 1.5 billion CLN tokens. The price at ICO is unclear, but is likely to be around $0.10 – although with the increasing price of ETH, who knows!
An interesting feature of the sale is the ‘vesting period bonuses’; COLU plan to reward pre-sale investors with additional amounts of CLN depending on the length of time they commit to holding their CLN. For example, investors signing up to a 6 month vesting period will receive an additional 4% of CLN tokens, while those prepared to commit to a 3-year vesting period will receive a 35% bonus. This is a new twist on ICO bonus structures and will be interesting to see how it benefits price stability in the months after trading commences.
Sure, COLU’s price point isn’t as attractive as others like Bankera’s, and the total supply of 1.5 billion isn’t as enticing as UTRUST at 500 million. Nonetheless, it’s a fair price and given the all points in the positive column.
As far as ICOs go, COLU is ahead of most insomuch as it has an existing platform that is already out in the marketplace and been proven to work and be of interest. They also have an established team (with celebrity endorsement from Dan Ariely!) who seem more than capable of making this a success.
The big question though, is do people actually want it? As interesting as the proposition of having bespoke cryptocurrencies specific to individual communities may be, only time will tell if the market feels this solves a problem for them. At the end of the day, the COLU wallet is just another way of paying for goods and services. Do people want something that only rewards them for purchasing locally, or do people prefer the ease and convenience of having just one method for transacting wherever they go?
On the plus side however, the prospect of features like peer to peer payments amongst local community members, social discovery of new places, and the integration of a reward mechanism (details of which could be clearer) definitely add a point of difference which will be interesting to follow closely.
What would help ICO investors to make a clearer decision is more clarity around how the CLN will operate. How exactly will different stakeholders create and manage bespoke tokens? How will transaction fees compare to those experienced via other payment methods? What’s involved on the merchant side to enable customers to pay with their COLU wallet – after all, every new payment method creates an overhead for merchants in terms of training, infrastructure, and sometimes even maintenance.
Despite any lingering ambiguity, I’ll be going in on this ICO!
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