The CoinMetro project team is setting out to create a new cryptocurrency exchange and trading platform that also offers crypto-banking services.
Cryptocurrency old hands are aware of the current issues with exchanges: in order to purchase a cryptocurrency or token with fiat, you first need to find an exchange that accepts credit card payments for the purchase of Bitcoin.
You then need to transfer this newly purchased Bitcoin to another exchange that will allow you to pair your BTC with the target token that you want to purchase. Finally, to secure your tokens, you then need to transfer your tokens out of the exchange into a personally managed wallet.
To go in the reverse direction – i.e. to convert your token into cash is equally laborious.
The CoinMetro white-paper asks: what if all of these steps could simply be consolidated onto one platform which also offers crypto-banking services.
The platform also wants to serve as an ICO launchpad. That, in a nutshell, is the proposition.
The white-paper is a business-focused document, providing minimal detail on the technical implementation, preferring to elaborate on the services offered and with a focus on end-user experience.
That focus on end-user experience is inherited from FXPIG, an online forex platform first established in 2011 and which has successfully differentiated itself from competitors through a hands-on approach to account management.
The team behind FXPIG now wants to bring us CoinMetro, a platform that will offer a range of crypto services including:
- Cryptocurrency and Token Exchange
- Crypto-banking Services
- ICO Launch Pad
- ETCFs (Exchange-traded Crypto Funds)
- Personal Wallet Services
The project team appear to be focused on attracting long-term investors only and are doing so through a range of strategies:
- Token vesting for ICO participants to discourage dumping in its post-sale period
- Access privileges for token holders to a range of services on both CoinMetro and FXPIG
- Access privileges for early investors with respect to ICOs launched from its platform
The proposition also incorporates a token buyback program that will see up to 20% of net profits being used to purchase the XCM coin internally within its platform.
No explicit road map is provided by the project within the white-paper or elsewhere on its website at this stage.
The CEO behind CoinMetro, Kevin Murcko is the same CEO who established FXPIG, an online foreign exchange platform which seems to enjoy all-round positive reviews with a client base that currently sits at just under 2500 users.
Murcko’s specific business focus appears to be user experience which, it seems, he believes is key to differentiation. FXPIG account holders appear to enjoy solid, personalised relationships with their account managers.
Whilst it is unlikely that CoinMetro users could or should expect the same level of hands-on service within an exchange context, it does appear that CoinMetro have identified what is likely to be the key element for any exchange that wants to emerge as the leading player over the long-term: a streamlined user experience free from the frustrations and annoyances that plague most exchanges.
The rest of the project team is composed of just over ten individuals, filling skillsets that demonstrate battle-hardened industry experience and strong, transparent LinkedIn profiles – always a good sign for a project’s credibility, but given its relationship to FXPIG, this is arguably less important here.
The advisory board is academic-heavy but also includes individuals with established backgrounds in law and growth hacking. This appears to be an all-round solid team.
The project token’s inherent value appears to derive from one key feature of this exchange which delineates its approach from that of pretty much every other exchange in existence today – the XCM token will be used as the medium of exchange for likely every service offered by the platform.
It is difficult to tell, at this stage, if this strategy will work in the token’s favour or against it. Users currently expect an exchange to carry BTC, ETH and perhaps LTC as their default currencies. This will likely be the case for CoinMetro but, if our reading of the white-paper is correct, in order to enjoy a seamless experience on its platform, users will need to commit to transactions in XCM in order to take full advantage of its services.
By offering both traditional cryptocurrencies and XCM as options, the platform may just find itself gently nudging users towards leveraging XCM as the default currency as user confidence builds up over time.
Unsually, the project team will also be applying vesting to investors themselves. Vesting is the process whereby a certain percentage of minted tokens are held in reserve, usually to ensure that there is an incentive for the project team to continue working on its goals long after a successful token sale.
However, we see in this instance that vesting is also being applied to ICO participants: all investors will see their token allocations locked down for the first ninety days after the sale end. Depending on the investor’s contributions, another 90 day vesting period will be applied to somewhere between 2/3 and 4/5 of an investor’s allocation. The mechanism is designed to combat speculation and volatility on the token in the weeks and months subsequent to its hitting the exchanges.
Whilst details are yet to be fully fleshed out, CoinMetro appear to be determined to operate a token buyback program whereby a portion of its net profits will be attributed to purchasing XCM within the CoinMetro exchange environment in order to “promote a stable pricing environment.”
This aligns fully with the interests of the XCM token which will require relative stability in order for the exchange to be successful – otherwise it may find that users will prefer to stick with Bitcoin as their default currency.
Most ICOs appear to struggle with the marketing aspects of their project. This is generally the case for ICOs which tend to be engineering-heavy and which are often slightly disparaging of the idea of marketing as a skill in its own right, generally believing a good product will market itself.
With CoinMetro, however, we do not notice this problem. If anything, we see the opposite: there are four marketing specialists of various hues – three that form part of the team itself and one that sits on the advisory board.
This is unusual to see within ICO-land, even among larger projects and bodes well for this project’s ability to get its message out there.
With two growth hackers, one general marketing specialist and one social media marketing specialist, this is a project that should have all angles covered in terms of its overall marketing strategy. Marketing now simply boils down to a question of budget and that will likely hinge on the success of the ICO sale itself.
CoinMetro’s two foci of user experience and long-term token stability, along the leveraging of the team’s previous experience with the FXPIG project initiated in 2011, indicate a solid proposition here.
The team presents a low-risk / high credibility profile and is fully transparent. We believe that this is a project that will hinge on two factors – firstly, the success of its token sale; secondly, an exchange model that takes its own inherent token as the centre of gravity for its broad range of services.
The project team has conceived of several mechanisms in a bid to eliminate the inherent volatility of crypto tokens – a token buyback program which leverages a proportion of the project’s profits that will allow for market interventions with respect to the token’s circulation, a liquidity reserve pool and token sale vesting.
The crypto space is littered with user frustrations, particularly in relation to token management and interaction with exchanges.
The fact that someone has identified these frustrations as a clear market opportunity and is seeking to offer a single platform with seamless crypto management should mean that, if production execution is done well, this project will enjoy some success at the very least if its marketing team manages to get its message out to the wider world.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
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