Monetha’s ICO Analyzer: The Whys, Whats and Hows
This is a brief introduction to Monetha’s ICO Analyzer. It explores the reasoning behind the product, its purpose, technical underpinnings, and how it relates to Monetha’s Decentralized Reputation Framework.
It Starts with Why
These past few years have seen an avalanche of Initial Coin Offerings, with scores of startups trying to fund their next big idea. Their unprecedented accessibility, fueled even further by the hype surrounding blockchain technology, proved to be a powerful draw. Impressive amount money were being raised month after month–and to be frank, not always discriminately.
During this craze, it was not unusual for projects to embellish certain facts about the crowdsale. After all, verifying all the transactions is difficult, and more favorable data go a long way towards promoting the ICO. Granted, the market has since cooled down; but crowdsales are still being run in one form or another, and the issue of truthful information remains pertinent despite the tightening regulatory grasp.
A few words about us. Here at Monetha, we are building a decentralized reputation framework. It might sound complex–we will touch upon technical details further on–but the purpose is quite simple: to help make interactions between people safer and more trustworthy. As you can imagine, such a project has a huge range of possible uses, subject to the imagination of its developers.
And so, here we are. On the one hand, the ICO Analyzer was built as a problem-solving tool, to let its users verify whether an ICO can be trusted. On the other hand, it serves as a showcase of Monetha’s Decentralized Reputation Framework and its capabilities. We hope that it will manage to fulfill both of these roles and that you will find the Analyzer useful.
What Does It Do Exactly?
Monetha’s ICO Analyzer gives its users a way to estimate how much money a blockchain project has raised during the Initial Coin Offering. It achieves this by checking the wallet addresses associated with the crowdsale and comparing that data with what information the project has made available to the public. The data is then recorded and stored safely on the blockchain in a designated ICO passport. If necessary, the analysis can be rerun multiple times by any person providing additional details that they know about the project. Each run leaves a separate entry in the passport.
We believe that the ICO Analyzer is best used as a tool to form an informed opinion about a project before getting involved in it. A significant mismatch between the purported and estimated amounts raised may signal that there is something noteworthy going on and that perhaps you should be wary. That said, it can be just as well applied retroactively, for example for research purposes, to evaluate the market at a given time.
The Nitty-Gritty, or How It Works
The ICO Analyzer makes use of Monetha’s Decentralized Reputation Framework, namely its Payments and Reputation layers. Let us briefly explore each of the two to see how they tie in with the product.
The Reputation layer helps people evaluate the trustworthiness of one another. It does so by accessing context-relevant information, if needed processing it according to set parameters, and then displaying it in a Reputation Passport, which is a collection of data points wrapped in a user-friendly interface. The process involves several parties, each of them fulfilling a specific role:
– Requestor – this is our technical term for persons who want to establish how trustworthy somebody is.
– Passport Owner – anyone or anything that can benefit from having a portable reputation in the form of a passport. Passports are not limited to representing the reputation of people or companies: items, groups, articles, cars, etc. can also have their own Reputation Passport.
– Facts Provider – entities that fill reputation passports with data. They can provide raw facts or process information according to certain criteria.
The Reputation layer puts great emphasis on data ownership and control. For one, while the Passport Owner cannot decide on what is stored inside the passport, she can choose when to use the data, who enters it and how: in a public or private manner. Furthermore, the Reputation Passport was designed to be portable, meaning that it can be transferred and used across many platforms. And finally, the underlying blockchain technology ensures a strong overall level of security and censorship-resistance.
Giving users ownership of their data presents other interesting opportunities. For instance, it allows treating reputation as capital which can be leveraged for benefit or whose access can be monetized.
Monetha’s ICO Analyzer demonstrates a simplified use case for the Reputation layer. It allows the user to create a Reputation Passport for an ICO and make a data request. Monetha, which functions as a Facts Provider, aggregates (using the websites icorating.com and etherscan.io) and calculates defined metrics and insights. The results are then displayed in the form of a simple pass/fail check, summarising the plurality of criteria involved in the analysis.
You can read more about the Reputation layer here: https://github.com/monetha/reputation-layer
The Payments layer consists of enforceable smart contracts. It governs exchange of funds between Requestors and Facts Providers by means of fast, efficient, and secure cryptocurrency transactions which do not discriminate on a geographical basis and require no intermediary.
By design, the Payments layer resembles the escrow mechanism found in vending machines. The customer’s money is held in an “escrow area” until the user’s request is fulfilled successfully. If, for some reason, a problem occurs and the analyzer cannot process the request, the customer is able to withdraw her funds. If everything goes well, the funds are released to the service provider.
Monetha’s ICO Analyzer makes use of the Payments layer at two points. Transactions are facilitated via the Metamask app:
– upon creating a new ICO passport. The creator is charged a small gas fee for deploying a smart contract on the blockchain;
– upon starting the analysis. The requestor is asked to pay a small service fee held in an escrow account until the process is completed.
The Payments layer can be used separately from the Reputation layer, but they complement each other perfectly. The former allows to incentivize the parties involved and makes the provision of services economically feasible.
You can read more about the Payments layer here: https://github.com/monetha/payment-layer
There you have it. That was our brief introduction to Monetha’s ICO Analyzer: its purpose, functions, and inner workings. If you are eyeing an ICO and are not sure whether to get involved, we urge you to give the Analyzer a try–it may help you make the decision. If not, perhaps you will take interest in Monetha’s Decentralized Reputation Framework. It is open source, so you can implement it in your own project. There are plenty of exciting use cases, and we have just demonstrated one of them.
The ICO Analyzer can be accessed via the following link: https://icoanalyzer.monetha.io/.
Monetha’s Reputation Framework: