Analysis of ICO Golden Currency
Golden currency is the first fully functional private currency, backed by gold and powered by blockchain technology. This currency has the following features:
- Cash and non-cash form
- Independence, but complete legality of functioning
- Gold backed; the owners of currency are guaranteed to exchange Golden for gold
- Currency infrastructure is built on blockchain and has familiar banking attributes: ATMs, bank cards, POS-terminals, online banking etc
- Conversion into any fiat and cryptocurrencies; fast and cheap.
Therefore, Golden combines two elements: currency and currency infrastructure.
Initial currency issuance will start after an ICO. Part of funds raised will be used to buy gold and to produce currency notes. Printed Goldens will be distributed through the Golden bank, which will provide customers all banking services. The number of Goldens issued and their compliance with the amount of gold in depository will be audited regularly; audit results will be available to public. Each Golden coin will be backed by a fixed amount of gold: an initial equivalency of gold will be at least $1 (0.02g).
Aside from currency issuance, there is a goal to establish a banking network. To minimize the time of market entry and to acquire client databases/intangible assets, the company will use M&A strategy in every country of its presence. The first stage of network development will focus on EU, USA and China.
The main resources of monetization are:
- Commission fee for Golden issuance
- Fees for banking services within Golden Bank network
- Income from integrated currency exchange platform.
The fundraising will be held in three stages: seed round for attracting anchor investors, pre-ICO (currently running) and ICO.
The WP lists several scenarios for distribution of funds raised after Pre-ICO and ICO. If hard cap target of $5M won’t be reached during Pre-ICO, marketing and PR will see 50% funds transferred; if hard cap will be reached - 60%. After ICO marketing operations will receive 5-7% of funds depending on the final sum reached. After Pre-ICO a public campaign for the design of Golden currency will be completed. ICO PR activities will be launched, including promotion of the future currency.
The team is active on Telegram channel, where numbers of followers are rather high.
Both founders of the project have very solid professional experiences in VC, private equity, project implementation, portfolio management, management of financial and industrial groups. There are also country managers with varied backgrounds and work experience at international corporations. There is only one advisor listed - a founder of Ithaca Hours, the largest currency system in the US.
The Vision of the Market
The team has clear understanding of problems with existing currencies. The WP lists the following issues:
- Volatility of both fiat and crypto money; depreciation of national currencies
- Lack of asset-based fiat and crypto money
- Lack of “independent” currency - a currency which doesn’t depend on “national interest”
- Lack of cash crypto money.
There is a definite need in “trusted” money and Golden Currency offers solutions to address this need.
Understanding of the Target Audience
The target audience is segmented as following:
- Individuals - using Golden currency as means of circulation and saving
- Investors - as an additional passive income: the currency is backed by gold, so investments will as the price for gold increases
- Cryptotraders - as an instrument of hedging cryptocurrency volatility risk
- E-commerce (organizations and individuals) - as a convenient cross-border means of payment for goods and services
- Emerging countries - as a transition currency to battle hyperinflation.
The main competitive advantage of Golden currency is that it will exist in two forms: paper and digital (cash and non-cash), both of them will be backed by gold. There is also banking network and currency exchange platform within a single Golden Currency ecosystem. Other advantages are: reliability (thanks to gold backing), transparency and familiarity of usage (thanks to creation of banking network with usual services).
Strengths: currency has several forms and is backed by gold. The market niche has strong potential. Clear understanding of target audience segments and their needs.
Weaknesses: no competitor analysis. The project may require negotiation of legal and other regulations, this will take time and resources. Marketing strategy needs detalisation; Twitter and Bitcointalk accounts should be more active. Only one advisor although it said in the WP that there is “a team of advisors”.