ICO Status: Ended
Utrust is a next-generation payment gateway which allows users to buy things online using cryptocurrencies. The problem that Utrust is aiming to solve is the absence of buyer protection mechanisms within cryptocurrency transactions. Every transaction will be protected by Utrust from payment till delivery. In a similar way to the service offered currency by Paypal, Utrust will provide a disputes service acting as mediator between buyer and seller, and refunding the buyer where necessary in situations where no resolution can be found.
Buyers can pay with any cryptocurrency for a low transaction fee, or with Utrust tokens free of charge. Funds are immediately converted into fiat currency in order to protect the seller from market volatility. The seller then has the option to withdraw their payment to a bank account, keep it in their Utrust account, or exchange it to any other cryptocurrency. The benefit for the seller is that all transactions are final: no credit card fraud and no chargebacks.
Adoption of cryptocurrency by the mass market will hinge entirely on people’s ability to conduct real world transactions. While some cryptocurrencies are focussing on peer to peer payments, services like Utrust are positioned to support an even more pressing need: consumer transactions. As cryptocurrency adoption spreads, so to will consumer need for buying things using it in the real world. The process of exchanging cryptocurrency into fiat currency for subsequent online retail transactions is clunky – something which the Utrust platform will solve.
Utrust compares itself to Paypal and bitpay (include graphic from page 21 in white paper). If Utrust can achieve market penetration similar to that of Paypal, then the potential market size is huge. But this represents both the carrot and the stick: market size will be determined less by the number of users who adopt Utrust, but rather the number of merchants who see the need to provide a cryptocurrency payment gateway and Utrust as being the provider of choice for this.
Part of the fee associated with every transaction is converted into Utrust tokens and burned thereby reducing the overall supply of tokens. As a result, the value of the remaining Utrust tokens increases.
Utrust have assembled a capable team of over 30 experts covering all areas from product and UX design, to blockchain technology, marketing and business. They are certainly resourced to succeed, but are they all full-time on the Utrust project?
CTO Artur Goulão Ferreira was formally CTO at an online payments company called Easy Pay based in Portugal. Artur’s Linkedin profile also lists current employment as Head of Development at a company called ‘PRIVUS – Privacy for the Digital Age’. In a simliar fashion, Utrust’s Head of Sales & Partnerships (a key role in this particular venture) Nick Olender, also lists his current occupation with another company. Utrust CEO Nuno Correia does not seem to have a Linkedin profile.
A key step when conducting due diligence on any ICO should be an assessment of the team. I’m on the fence with this one because whilst the team appears large and has relevant experience, it is difficult to determine whether they are dedicated full-time to the project, or simply awaiting the outcome of the ICO to decide whether or not to go all-in.
Utrust is a classic example of ‘good idea, but no product’. The development roadmap lists Q2 2018 as the timeframe for having a platform available for testing with merchants, Q4 2018 as the date for platform release. This represents a significant risk for ICO investors. Developing any sort of platform is a challenging task – let alone one which relies 100% on adoption by 3rd parties (merchants in this case) for success. Here are some barriers Utrust will face:
The Utrust ICO will start on the 2nd of November, 2017. The total supply of Utrust tokens is set at 1 billion, with an anticipated rate of annual reduction set at 2%. Tokens can be acquired at a cost of $0.065 USD per token, generating a maxium of $49m, with $3.5m pre-sold to investors.
The main problem facing Utrust is competition from other providers. If cryptocurrency really does takeoff as a mainstream payment mechanism, then consider how difficult it would be for a company like Paypal to simply incorporate this option into their existing solution and the relative ease they would have in capturing market share. After all, they already have brand reputation with both consumers and merchants, they have a widespread install base as a payment gateway on merchant sites worldwide, and their team is vast. So the only hurdle for Paypal is the blockchain technology. Surely they could solve that overnight?
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