True Flip ICO - Review

Today we'll be looking into True Flip 's ICO using our usual ICO Valuation googles.

What is True Flip ?

True Flip aims to be an ethereum-based decentralized lottery. You choose a game (so far they only have a powerball-like implemented), choose your numbers and wait for the draw. The numbers are drawn using the first Bitcoin's blockchain block that fits a certain technical requirement and creates the draw using their drawing code. The block used must have a timestamp that occurs after the tickets sale, so that you can't know it in advance. Technical details on their video.

Business model

Users buy lottery tickets, 60% of its price are immediately converted to bitcoin and sent to the prize pool, which is available at all times on their blockchain.

According to the degree to which you match your numbers to the drawn numbers there are different prizes. Basically, if you match at least 5 of the 6 balls, you're going for the prize pool. If you've only matched less than that, then you're going for the fixed prizes (which are intended to be far less than the jackpot).

The remaining value of sold tickets is distributed as follows: 10-15% to token holders; 5-10% to operations; 15-20% to marketing; and 5% to the referral program.

These spreads are voted by token holders.

Their draw code is open-source and available on GitHub, which is always a sign of good faith.

The Team

The advisory board seems pretty solid, with names like Eric Benz cryptopay CEO, George Basiladze cryptopay founder, and special highlight to Richard Kastelein whom I'm particularly fond of. Coincidently, I've mentioned one of his talks just the other day.

They seem not to have a CEO. The name that comes first in their presentation is their COO's Nikita Parhomenko whose LinkedIn is not quite clear to me since it is mostly in Russian, but it says he possess a PhD in management.

One of their core developers, Felix Sidokhin has no LinkedIn profile (the site points to a broken link) which is never a good sign. The other one is Nikita Ivanov whose profile is also in Russian, but looks like has a lot of web experience. The third core developer is Vladimir Feoktistov, who also does not have a LinkedIn profile.

Overall, the team's evaluation is medium to negative.

The Market

There is not competitor we're aware of. As far as I'm concerned it's blue ocean.

They also point out in their white paper that the offline lottery global market is roughly 100 Billion euros, whereas the online is about 3 billion, so that they're trying to enlarge the online portion of it.

Token Value Proposal

The tokens basically represent shares of the company. You receive your fair share of 10-15% of ticket sale revenue and you get to vote in future company developments and capital allocation.

They provide the following table, reporting the yields one would receive in different scenarios, considering the ICO price of the token:

This means, for example, that if we voted to distribute only 10% to token holders, and the company sells 30,000 tickets daily, we would receive 10.5% annually.

Dividends are withheld and paid quarterly to investors.

There is one catch though: You have to "lock" in your tokens within the company. This means you can't move them until the locking period is over. They do not comment on how long is the locking period though.

For comparison purposes, they claim to currently have average 18,000 daily sold tickets.

Conclusion

I like the project a lot. The idea of a decentralized provably fair lottery makes a lot of sense to me. There's been so many claims about the world of unfair lottery scams, a decentralized one seems pretty sound.

I love that their project is very investor oriented, with a clear value proposal and even tentative valuation scenarios stressed out in the paper. Also, the business is already running.

Their goal with the token sale is to increase the jackpot and the marketing budget, both of which are crucial to enlarge the business' operation. They clearly state that, which I also like.

The team's lack credentials in my humble opinion. But they make up for it with a hard core board of advisors, who are widely known within the crypto-community.

Being able to be on the other side of the lottery ? Count me in.