ICO Analysis: Signals

Bitcoin and other cryptocurrencies have witnessed an unprecedented growth in volume over the past one year. Although cryptocurrencies were created for purely transactional or utility purposes ,their rapid price appreciation, growing volume and high volatility has rendered them the status of speculative trading assets.

Trading mechanisms like the algorithms found in trading bots are now being widely used to trade cryptocurrencies. Trading bots are computer programs that use various indicators to recognize trends and automatically execute trades. While algorithmic trading software has been used by hedge funds in the equity, commodity and currency markets, they are quickly making their way into the crypto asset market.

The Signals platform is a place where anybody can create fully customizable trading robots with no advanced technical knowledge required. Signals helps users create trading bots by providing them the data (foundation of analysis),indicators (lens to view the data) and strategy (how and when to apply the indicators to the data set).

The Signals platform offers the following functionalities:

  1. Data Marketplace: The fundamental building block of any strategy, data is an essential part of creating powerful analytical tools. With Signals, users and external vendors can monetize their unique data sets in the Data Marketplace. Live trading data from third party exchanges is provided using APIs. Data from social networking sites like Facebook and Twitter can also be shared on the platform.
  2. Indicators Marketplace: Users have access to simple indicators based on technical analysis, advanced data science indicators or even indicators based on prediction markets and crowd wisdom. Traders can also create custom indicators and sell them on the marketplace.
  3. Signals strategy builder and marketplace: Users can directly copy strategies of successful traders or build their own trading bots by selecting data and specific indicators. Even third-party bots can integrate themselves into the platform. Optimal strategies can be backtested before deployment.

Once a strategy is created, users can connect their model to the crypto exchanges and start trading using the Signal Network’s cloud-based solution.

The Signals roadmap is divided into six milestones, which extend till Q4 2019. All the three major components discussed above will be tested extensively with both private/public beta versions and the final version of the platform will launch during Q3-Q4 2019.

The Strategy Builder Framework private alpha is available for testing; you can check it out here.

Token

The Signal Token (SGN) will be an Ethereum blockchain based ERC 20 token. All paid features available on the Signals platform will be accessible exclusively using SGN tokens.

Each purchase on one of the Singal marketplaces (e.g. data stream purchase, or copy trading user made strategies etc.) will be charged and paid for by using the SGN tokens. The Signals platform will charge a fee for each purchase in the marketplace.

Team

Signal’s team comprises of data scientists, experts in algorithm trading, and a machine learning specialist. CEO and co-founder Pavel Němec is an experienced algorithmic crypto trader and machine learning evangelist. The other co-founder is Pavel Volek a software architect, UX designer, and front-end developer who serves as the project’s CTO. There are nine team members in total.

With that in mind, we have three important observations about the Signals Network team which need to be considered:

  • The co-founders do not have much entrepreneurial experience. However, this factor may not hold much relevance in this type of project as this is a simple tech-based platform.
  • There are no advisors listed.
  • After going through the LinkedIn profiles of each of the team members, I noticed that almost all of them apart from the co-founders, are actively working in other ventures as well.

Verdict

Cryptocurrency trading bots in existence today can generally be classified as those for beginners (but have limited features) or those made for more advanced users who typically require coding experience. The Signals platform aims to provide complex functionality but can be used by beginner traders with no coding skills.

The Signals platform faces competition from already operational trading bot platforms, many of which are free to use. Platforms like Gunbot, Haasbot, CryptoTrader, Zenbot have thousands of users and are already well integrated with exchanges. The advantage of Signals is the ease of use and the marketplace feature, which gives it a lot of flexibility. However, until Signals platform is fully developed, other platforms can introduce ease of use. At the same time, it’s hard to see the marketplace feature succeed unless it attracts a signfiicant user base.

Growth Potential

  • Trading bots in cryptocurrencies have not yet received mass adoption because of the complexity involved in operating and integrating them with exchanges. As millions of traders get introduced to cryptocurrencies in the future, an easy to use a platform like Signals might become the preferred destination for algorithmic trading. +4
  • The copy trader feature and the marketplace provide a lot of flexibility to users in terms of choosing their preferred investment strategy. Existing platforms do not have these features. +3
  • Trading bots can easily turn out to be scams. A bitcoin trading bot called Hexabot first halted withdrawals from its platform and then shut down its website in what appears to be an exit scam by the platform’s owners. Traders can buy trading strategies of successful small traders on Signals without worrying about trust. +4.5

Risks

  • Signals Network faces competition from many existing trading bot platforms, many of which have thousands of users and active integration with multiple exchanges. -2.5
  • The roadmap stretches a bit too far. A final working product will only be available in Q4 2019 and by the time Signals get fully functional, there will be hundreds of trading bot softwares in existence. -2
  • As mentioned before, almost all of the team members apart from the co-founders are actively working in other ventures as well. There are no advisors listed on the platform. -2
  • Signals Network faces regulatory risks as many countries are evaluating options on banning cryptocurrency trading or at least limiting it. -1

Disposition

We arrive at a score of +4 out of 10 for Signals Network. Concerns around the team, the extended roadmap and a sector with high competition and limited differentiators lower the score.

Investment Details

  • Token Type: Utility
  • Platform: Ethereum
  • Symbol: SGN
  • Initial value for public sale: 1 SGN = $0.30
  • Pre-sale: Sold out, $500,000 raised
  • Public Sale: Feb. 26th, 2018
  • Country: Czech Republic
  • Hard Cap: $18.5 million for 50% supply
  • Jurisdictions Barred from Participating: U.S., China
  • Website: https://signals.network/token-sale
  • Whitepaper: Click here.

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