What is it?

From their website we are told:

Ethorse is an Ethereum Smart Contract based DApp for betting on the price of Cryptocurrencies and win from everyone who bets against you. Users bet on a coin/token that performs the best among all the other competing ones in a specific time period. Bets are placed and rewards are claimed using Metamask plugin for Chrome/Firefox or the Ethereum based Mist browser. Being completely secured by the blockchain, no one has control over the race or user funds once a contract is deployed and a race is announced.

So basically it allows you to bet on the future price of various tokens or cryptocurrencies. It looks something like this:

Team

We don't actually know anything about the team creating Ethorse other than by observing what they have done. That is because they have chosen to remain anonymous since obviously, this app could have legal and personal safety consequences for them if they publicly own it.

So based on that I'd say what they have built is definitely above average and the devs are doing all the right things with website, whitepaper, source on Github, active communities on Reddit, Telegram, and Twitter, and already having an app up and running on the Ethereum testnet (Metamask required).

Vision

The vision is a relatively simple idea I think they are being very gutsy tackling this contentious area that will surely ruffle feathers all round the world. Gambling empires across the world should be taking note - this will certainly not be the last race horse in town to challenge their greedy empires. I think this app may also provide an interesting channel for prediction markets to get info. I'm sure there will be insiders who cannot resist making a bet on Ethorse to profit from their knowledge. Market analysts take note!

Product

The product so far I think is definitely way above average for an ICO - pretty much as good as you can get without having a launched product. As I have mentioned on code, test app, community they are rating highly. My only concern on product is if the use of Oraclize for determining price is a weakness. Can a single source of price be gamed in some way? Maybe a DNS hack of their source API causes a huge payout thus placing a huge bounty on anyone who can do such a hack. Compare to Wagerr who will have up to 2000 validators independently publishing sporting event results and then forming consensus.

Should you invest?

Well the economics of this coin for investors are:

1. 100% bonus if you buy HORSE in stage one of the ICO. That could give you a nice advantage over later investors.
2. Future increase in the value of HORSE (see calculations below)
3. Proportional share of the 5% house take on each bet.

Let's dive into 3) a bit more...

There will be 100M tokens total in the public sales, 125M total. If you put in 1 ETH and get 20,000 HORSE tokens in the round 1 public sale that means you have a 0.016 percent stake of the 5% house take.

If you assume there are $1M worth of bets per day then that's $50k take for the house and 0.016% of that is $8 per day. Therefore over a year of such volume, your 1 ETH investment will net you earnings of $2920. At ETH/USD=1000 today that's a nice return even ignoring any appreciation of HORSE tokens that might occur. With predictable earnings like that everyone will want to buy in driving the price of the HORSE token up considerably. As volumes on Ethorse increase so will the price (compare to bond market prices relating to the interest they earn).

Can Ethorse get $1M of bets per day? Well, for comparison just look at Coinmarketcap data and you'll see there are 450 coins/tokens each with over $1M volume today. Over the last 24 hours the combined market volume was $46 billion. As we know the cryptocurrency markets are highly speculative - many people are essentially betting on them. It seems reasonable that people will be making similar "bets" as literal bets on Ethorse. They might even use it as a hedging mechanism.

So even if we imagined only 1/1000th of that total $46B daily volume moving to betting on Ethorse that is actually more like tens of millions per day, not just one million. Can you imagine the price of a HORSE if there was even $10M per day?

At the ICO Public sale 1 price they are selling HORSE for about $0.05 each. (1ETH=$1000 and 20,000 HORSE). As I calculated above 1ETH worth would net you $2920 per year per $1M of daily betting volume. So at $10M daily volume we are talking $29,200 per year. I would say that easily means 1 HORSE is worth 29200/20000 or $1.46. More realistically I think people seeing it as a predictable income would actually price it at multiples of that since at $1.46 price you're getting at 100% return after one year. People would KILL for such a guaranteed return elsewhere. In the crypto market people are more greedy and because there is risk expect higher returns but something between 2 to 5x that amount representing 20 to 50% annual return might be more realistic.

Even at $1M daily volume you're still talking a price of $0.146 or multiples thereof - so I reckon this ICO will quickly give a 10x to 100x return for early investors. At $100K daily volume that is $0.0146 earnings per HORSE per year or 29% of the initial price.

I wonder if the creators have ever wondered about using Ethorse to bet on the price of HORSE itself? That is pretty meta but I guess might have a destabilizing effect on HORSE pricing. Only time will tell I guess.

As ever, only invest as much as you can afford to lose! Aside from that... may the best horse win!