2017 was a banner year for cryptocurrencies, with hundreds of billions of dollars flowing into the market. Although the gains have been largely driven by speculation, consumers, businesses and investors are beginning to believe that decentralized payment systems are the wave of the future. While many cryptos have served as great stores of value, they offer limited utility from the perspective payments.

Slow transactions, a lack of fungibility and the ongoing scalability problem continue to impede on mainstream adoption of cryptocurrency. The GoNetwork project believes mobile technology is the key to unlocking widespread consumer adoption, and is developing a peer-to-peer network for Ethereum that can be accessed from your smart phone.  It aims to do this through the GoExchange, a decentralized e-commerce platform for the gaming industry.

GoNetwork is concentrating its efforts entirely on the Ethereum, which is currently the third largest cryptocurrency network in the world by market capitalization. It aims to introduce greater accessibility and interoperability to a blockchain that has served as a great system for ICOs, but less so for mass consumer adoption.

In this vein, GoNetwork has unique first-mover advantage. If it can pull off the project successfully, it will essentially become the first off-chain payment system for Ethereum.

Token

GoNetwork is issuing an ERC-20 token that will be used to create and finalize contracts on the exchange, a process it calls state channels. Conceivably, the token will be used to power GoExchange, which is the first use case provided by the company. A state channel essentially allows two parties to transact with one another off-chain for as long as necessary until they are ready to settle. Once settlement terms have been agreed, they move back to the blockchain where verification and mining can be done quicker and more efficiently. Although state channels have been successfully deployed by Raiden Network, GoNetwork is attempting to bring a similar solution to the mobile arena.

Based on the use case, the GOT token will essentially fuel GoExchange, the decentralized mobile app marketplace to be used by gamers to purchase virtual goods. Users will have the opportunity to convert fiat money into GOT via the Integrated Payment Platform. They will also be able to purchase GOT through their Ethereum wallet.

The crowdraise itself will be used to generate funds for ongoing GoNetwork operations. Twenty-five percent of the tokens will be distributed to the team members, a figure that runs on the higher end of crowdraises we have reviewed in the past. Fifty percent of the tokens will be made available through the ICO.

Team

GoNetwork has assembled a highly reputable team, with CEO Rashid Khan emerging as one of Canada’s leading mobile app entrepreneurs. He founded Infinidy Corp, which is one of Canada’s leading game development firms. Over 15 million people have downloaded Infinidy’s games.

CTO Amit Shah is described as a “blockchain expert,” although the only evidence provided is a line about past experience with “several Ethereum based open source projects.” His core strengthens appear to be R&D, software and IOT.

COO Xun Cai also brings a strong entrepreneurial mindset, having co-founded Infinidy with Shah. Four other people make up the core team, including two former Google employees. GoNetwork has also recruited the services of five advisers to assist in product management and business development.

Although this is a star-studded lineup, there doesn’t appear to be a focus on blockchain technology. This is true both of the core team and the group of advisers. Laurent Bernardin is COO and Chief Scientist at Maplesoft, but there isn’t much information on his experience in blockchain technology.

Verdict

GoNetwork is converging on a highly lucrative industry that has the potential to grow significantly in the next three-to-five years. If history is any indication, the mobile app economy could easily reach the valuations GoNetwork has identified in its whitepaper. The challenge, however, is delivering on this extremely ambitious project. We foresee plenty of implementation risks that investors need to weigh before investing heavily into the project.

Risks

  • GoNetwork offers a large bounty program, which immediately ups the risk of a pump and dump after the token raise. Although this isn’t unique to this project, it is a widely observed phenomenon in the blockchain community. -0.5
  • GoNetwork is an ambitious project, but there are huge implementation issues, chief among them being the ability to disrupt the traditional payment and gaming industries. Even if the GoExchange pilot project succeeds, how will it go about accessing the app ecosystem present on the Android/Apple stores? -3
  • The project is being spearheaded by a strong team of technology and business professionals with ample experience in mobile app development. As far as the author can tell, the same level of comfort hasn’t been extended to the blockchain arena. Although this isn’t the end of the world, the team is proposing to scale the Ethereum platform. This is an absolutely enormous task that has already divided the blockchain community. GoNetwork may need to recruit extra fire power to make this happen. -3
  • The team has provided an ambitious roadmap for 2018. The problem is, GoNetwork has already pushed back the date of its ICO, and at the time of writing, has not provided a new one. Given the enormous work that lies ahead, the team may need to push out its timeline further (the existing whitepaper says the GoExchange open beta version will be launched in Q2). -2

Growth Opportunity

  • As we mentioned earlier, GoNetwork has first-mover advantage in becoming a viable off-chain network for ether payments. The GoExchange use case is a good example of how the project aims to achieve its goal. That GoExchange is a mobile-first platform also offers strong potential given the size and growth rate of the mobile app economy. As the whitepaper noted, mobile apps could generate $6.3 trillion in 2021. If anyone can capitalize on mobile gaming, its the brains behind Inffinidy. +5
  • State channel can and has reduced the cost of higher frequency workflows. The off-chain solution will help the project achieve one of its core missions of  building a cheap network for Ethereum. +3
  • Much of the whitepaper is essentially a use case of how the project will build a fast, cost-effective and scalable mobile network for Ethereum. That’s essentially GoExchange, which means that a similar model can be adopted elsewhere. So, while the project is highly ambitious, it has a clear focus. This also applies to GOT as well (in other words, you don’t have to worry about the token not having an actual use). +3.5
  • There’s a good possibility that the token distribution model will inflict many investors with the ‘fear of missing out’ mentality. There’s only 50 million tokens available, and with the hype the project is generating, could sellout fairly quickly. The ICO will probably succeed from a funding perspective. +3.5

Disposition

Implementation issues aside, GoNetwork is backed by a very talented team. We just wish there was more blockchain experience outlined in the whitepaper. The author is going to take a leap of faith and say there is blockchain experience somewhere on the team given that it won the ETHWaterloo Ethereum Hackathon, which is the largest of its kind anywhere in the world.

On the technical side, we also like the state channel solution, as this provides a tangible example of how the platform aims to reduce the cost of transactions. The size and growth rate of GoNetwork’s online community (Telegram, Twitter, etc.) also suggests this will be a successful ICO.

Against this backdrop, we have assigned the project a score of 6.5 out of 10.

Investment Details

Note: Investment details are subject to change as pre-ICO/ICO dates have not been set. 

  • Type: Crowdsale
  • Symbol: GOT
  • Platform: Ethereum
  • Pre-ICO Date: TBD
  • ICO Date: TBD
  • Available Tokens: 100,000,000
  • Payments Accepted: ETH, BTC
  • Jurisdictions Barred from Participating: United States, China, Singapore, Canada