Iagon (IAG) Rating
IAGON is a platform for harnessing the storage capacities and processing power of multiple computers over a decentralized Blockchain grid.
IAGON is a platform for harnessing the storage capacities and processing power of multiple computers over a decentralized Blockchain grid. Iagon positions itself as a decentralized cloud service platform at the intersection of two influential trends in the field of Big Data security and Artificial Intelligence, which means that it provides a fully secured storage capacity and enables to process Big Data bases through the artificial intelligence and machine learning operations.
Average Scope 0.66
Iagon is aimed to create a super-computer and super data center that could compete with any of the current cloud services providers by offering a decentralized grid of storage and processing. The Iagon’s team explains: while todays cloud services market is burgeoning and well-established players (so called big-4 - AWS, Google Cloud, Microsoft and IBM) have been providing storage services since the emergence of Big Data trend. These providers are running on the central and less secure storage. They further overstate market prices taking advantage of having more investment resources as well as substantial data centers, servers and storage capacities. Iagon proposes that its Ethereum based decentralized platform could compete with these dominated market players by providing companies and individuals storage and processing services at a fraction of the market prices and at a better security level by connecting data centers, business computers and personal users and utilizing their free storage capacities and their CPU and GPU processors during idle times.
McKinsey / GE Matrix
Selective Harvest or Investment
Harvest for Cash Generation
Invest for Growth
Segment &Selective Investment
Selective Investment / Divestment
Controlled Exit or Dis-Investment
Rapid Exit or Attack
Source: ALFA Ratings
We build McKinsey matrix to analyze the strategic attractiveness of the project. In our view, the market segment is strong with the huge growth potential. Indeed, according to the Statista, todays Big Data market size is estimated by USD42bn (for 2018) and will steadily grow within at least 5 – 10 years. The more detailed market analysis is represented on the Market Overview tab.
The business profile of Iagon is also estimated at a high level, considering its competitive advantages in the form of the fully secured storage capacity as well as substantial data processing facilities. We note that at the current stage Iagon does not have comparable with dominated players resources but, in our view, its unique blockchain business model covers all of its weaknesses and it’s able to attract substantial investments, including from the corporates concerned. What is more, the project has already have EUR190000 invested by the founders. In general, the team is going to attract about USD77mln via IAGON token sale, according to its business model.
Thus, we have a “Grow Penetrate” representative as a result. It means that the project is needed to pursue strategies of investment and growth by attracting resources to ensure growth at the fastest possible rate as well as to concentrate efforts on maintaining the strengths of the business. We would consider the traditional strategies for Growth Penetrate as recommendations to focus on the searching of financial sources as well as the developing of its business model, which has already been implementing by the team.
It should be mentioned that IAGON disclosed its business plan on the official website. The business plan represents IAGON’s operational model, its estimated revenue streams, ownership structure and funding. According to this, IAGON is owned by 4 founders and is registered as a Norwegian company. Dr. Navjit Dhaliwal (CEO), Dr. Elad Harison (COO & Chief Architect), Dr. Claudio Lima (CTO), and Bogna Kaczmarek-Dhaliwal (silent partner).
The ownership structure is following:
CanPol AS (Company co-owned by Navjit and Bogna) - 65%
Dr. Elad Harison - 25%
According to IAGON’s business plan the project is going to charge services payments and fees in the form of IAGONS tokens (traded via cryptocurrency exchanges). Users willing to carry out storage and processing tasks will purchase IAGON tokens. IAGON plans to charge 10% commission for each transaction from miners, which is expected to cover its R&D and operational costs. The rest of the tokens (90%) will be transferred to the miners and distributed between them due to the amount of their resources that serves the user’s operations, according to the project’s business plan.
Token – IAG
Platform - Ethereum
Pre-sale minimal price - 1 IAG = 0.06 USD
Price in ICO - 1 IAG = 0.12USD
Tokens for sale - 700,000,000
The IAGON Pre-sale will start on May 27th and end on June 26th. The pre-sale offered 20% of IAGON’s tokens.
The next stage of the Token distribution is crowd-sale. The crowdsale offers 50% of the IAGON tokens to the public (offering in total 500,000,000 tokens) according to the Whitepaper is 0.12USD per 1 IAG token for all 500 million tokens. Other 30% of the tokens (max. 300,000,000 tokens) is expected to be dedicated between the IAGON’s team and advisors (10%), bounty hunters (10%), development team (10%).
The project estimates its soft cap at USD5m, hard cap at USD50m. Purchases can be made via all ETH, Bank Transfer or card payment. It should be mentioned that the 70% of team’s tokens will be locked till mainnet launch (Q1 2019). CEO’s tokens will be locked in following way: 30% for one year and 70% for two years.
Figure 1. Proposed tokens distribution structure, %
The cloud services market is expected to grow 21.4% during 2018 to $186.4 billion, up from $153.5 billion in 2017, according to Gartner Research, Inc.
The biggest contribution in the growth will be made by the segment of market cloud system infrastructure services (infrastructure as a service or - IaaS), which is forecast to grow 35.9 percent in 2018 and is expected to reach $40.8 billion as of 2018 year end.
According to Gartner research, the top 10 providers will account for nearly 70 percent of the cloud services market by 2021, up from 50 percent in 2016. The giants will enjoy efficiencies and cost benefits, but the potential oligopoly can create barriers to the cloud services users in the form of unchecked influence over customers and the market. In response to multicloud adoption trends, organizations are expected to increasingly demand a simpler way to move workloads, applications and data across cloud providers' infrastructure services offerings without penalties.
Figure 2. Cloud Service Revenue Forecast (USD bn)
According to the Gartner Research Analytics, software as a service will remain the most valuable segment of the cloud market, with revenue expected to grow 22.2 percent to reach $73.6 billion in 2018. Gartner expects this segment to reach 45 percent of total application software spending by 2021.
Databases platforms is expected to be the largest segment within the platform as a service category, it’s forecasted to reach almost $10 billion by 2021. Hyperscale cloud providers are increasing the range of services they offer to include Cloud business process services. Although public cloud revenue is predicted to grow more strongly than initially forecast.
Figure 3. Compounded Average Growth Rates (CAGR) by Cloud Service Category (2016 – 2020), %
Because of the centralization currently inherent in cloud computing, resources could be shared and the end customer could have much lower costs and higher efficiency and uptime. There’re some giants in the market, who have substantial market shares, thereby they enjoy efficiencies and cost benefits. Their datacenters are divided by some regional parts and files are spread out among them. Currently, the dominance on the market belongs to a very few companies, including famous IT-giants:
1) Microsoft remains the top-1 cloud services provider around the world due to some reasons: firstly, it is fully involved at all three layers of the cloud (IaaS, PaaS and SaaS). Microsoft provides the clients with complex solutions, including helping customers to deploy AI, ML and Blockchain in innovative production environments. It’s revenue estimated by Forbs at $16.7 billion per year.
2) Amazon is category creator and the first-moving paradigm-buster. It currently earns $16 billion cloud revenue from AWS per year, despite it doesn’t provide any complex solutions.
3) IBM plays in all three layers of the cloud — IaaS, PaaS and SaaS — like Microsoft, which is sufficiently important for the top cloud vendors because it allows them to give customers more choices, more seamless integration, better cybersecurity.
Other big players are Salesforce, SAP, Oracle etc. As for blockchain-based decentralized platforms, IAGON has some competitors represented by Filecoin, MaidSafe, Siacoin, Storj, DADI, Golem etc.
Filecon is a blockchain-based digital storage startup, Filecoin, raised $52 million in a pre-initial coin offering (ICO) sale and $205 million in the actual ICO last year – one of the biggest ICO ever.
Midsafe has already launched its safe browser which can be downloaded from its official website.
Nebulous, Inc launched its Sia Storage Platform in 2015. Based in Boston, Nebulous is funded by Raptor Group, First Star Ventures, Fenbushi Capital and INBlockchain. Sia is a decentralized cloud storage project that aims to be the storage layer of the internet. The project’s audience has grown by 2,100% since the beginning of the year, reached 110,000 community members across Twitter, Reddit, Facebook, and Discord.
Nowadays a lot of scientific computational projects harness idle resources of personal computers to run distributed resource-intensive algorithms. The most notorious framework for distributed scientific computations is BOINC – Berkeley Open Infrastructure for Network Computing. The framework was developed at the University of California, Berkeley, and originally was intended as a backbone for search of extraterrestrial intelligence. Later, the framework was adapted for other domains.
BOINC and similar projects do not provide any incentives for users to share their resources. Some cryptocurrencies, e.g. GridCoin, FoldingCion, aim to tackle this problem by (at least partially) replacing Bitcoin Proof-of-Work with novel approach that takes into account some specific computations for scientific projects. Like in PoW mining, these computations serve as a protection against double-spends and DOS attacks on the system. However, extending such approach for arbitrary computations is, to our knowledge, an open problem.
IAGON examined its competitors on some criteria like an aviability of Continuous optimization of the grid, storage of file fragments on the grid, CPU processing grid, Multiple platform support etc. and have a lethal advantage over any other project.
Common problems of the field
We see several issues that prevent mass adoption of distributed computational services:
- Lazy miners. There is no general way to determine the amount of work done by a particular node in a decentralized network, thus the miners have incentives to be lazy. IAGON solves this by proposing a tiered architecture and a Proof-of-Utilitarian-Work algorithm that provides ratings of the participants. According to the team, the specification of this protocol is under development, thus it is impossible to assess its possible flaws and overall applicability.
- Privacy. There is no straightforward way to perform arbitrary computations on the data without losing privacy. IAGON splits the data into multiple chunks, which lowers the risk of public exposure, but (as the team members confirm in private conversations) IAGON nodes perform computations on open data. This can be undesirable and even illegal for businesses in certain jurisdictions.
- Malicious miners. The results of the computations can be tampered with, e.g. in order to get competitive advantage over the party that requests the computation. The problem of secure multiparty computation is solved for particular sets of tasks. However, we are unaware of schemes that allow to solve this issue generically. According to the project team there will be no block validation in IAGON.
We conclude, that there’re some sizable competitors, including blockchain - based projects with fully established platforms and a collected funding, as well as significant problems of the field, but the market estimated growth rates as well as its potential create conditions for the emergence of new players, primarily blockchain-based storage startups. It is also worth noting, that the project has a unique competitive advantage in the form of combined decentralized data security services with the data processing, which enables to process Big Data bases through the artificial intelligence and machine learning operations.
Dr. Navjit Dhaliwal – founder and CEO of IAGON. Navjit Dhaliwal is an expert in medicine, specializing in dentistry. He is an acting doctor at Mjøsa Tannklinik, founded by himself. According to his LinkedIn page, Navjit Dhaliwal is the founder and co-founder of several more companies in the field of dentistry. Thus, he has a succsessfull experience as an entrepreneur and businessman. Navjit Dhaliwal studied at McMaster University and obtained Bachelor’s degree in the field of Medicine. Then, he graduated Poznan University of Medical Sciences (D.D.S, Dentistry).
Dr. Elad Harison – Chief Architect and COO of IAGON. Elad Harison graduated Universiteit Maastricht (Doctor of Philosophy (PhD), Economics) and Technion – Israel Institute of Technology (Master’s degree, Industrial Engineering). He has a substantial experience (about 8 years) as a lecturer and researcher in Industrial Engineering and Management Department, Shenkar College of Engineering. Design. Arts. He has about 6 year experience in the business consulting (ICT firms and startups with focuses on the space of information systems, economic consulting, industrial engineering & management).
Dr. Claudio Lima – CTO of IAGON. Claudio Lima is a former CTO of Huawei. He has a relevant work experience in the field of blockchain, machine learning, artificial intelligence and internet of things. Claudio Lima is one of the BEC (Blockchain Engineering Council) founders, which develops specializes on advanced Blockchain technologies and projects. He get an executive MBA in Fundação Dom Cabral. Claudio Lima also studied at Stanford University (Strategic Management, Corporate Strategy, Business Model) and University of California, Berkeley HaaS School of Business (Venture Capital Executive Development, HaaS Business School, UC Berkeley).
IAGON attracted 14 advisors with the solid experience:
Dr. Rohit Gupta - Director Technology at Expedia Group, Founder of HealthGini, an expert in computer engineering (PhD). Rohit Gupta worked in Amazon as a software development manager.
Jason North - CEO and Founder at SUMO Scheduler. Jason North is a serial entrepreneur from Silicon Valley specialising in SaaS and Blockchain.
David Drake - Chairman at LDJ Capital. David Drake, through his family office LDJ Capital, has acted as GP and LP investor with his partners in fund-of-funds, realty funds, venture capital funds, and hedge funds.
Dr. Nezer Zaidenberg - Founder and CTO at Truly Protect, Entrepreneur and Researcher. Nezer Zaidenberg is a docent in the field of trusted computing and virtualisation from JYU and faculty member in software engineering faculty, Shenkar college for engineering and design. He is also seasoned technology executive with over 15 years of executive experience in Technology startups.
Phillip Nunn – CEO of Wealth Chain and advisor of several more companies in the blockchain sphere. Phillip Nunn specialises in wealth management, angel investment, commercial property investment and financial technology. He has become a well-known, online influencer in the blockchain and crypto space.
We highly appreciate IAGON's team and their experience. In our view, the team has all the necessary competencies.
There is information about the strategic partnership with companies working in the cloud computing industry. Although, there are no partnerships with potential users of the services offered.
The project doesn’t disclose its marketing needs and strategies, despite the fact that the business is a highly competitive. Nevertheless, we estimate the potential success of its marketing campaign at a high level, considering the lineup of the strategic advisors team and the volume of a proposed funding.
Social activity of the project in Telegram, Youtube, Facebook, Twitter, and BitcoinTalk is at a sufficiently high level.
Number of subscribers of the project in social networks and on other resources (as of May, 8, 2018):
Facebook - 32725
Twitter – 3741
Instagram – 457
YouTube videos have over 1000 views and counting.
The project has a solid bounty program. 8,333,333 tokens are expected to be allocated through the following activities:
YouTube, Blog posts, Articles Bounty – 20%
Twitter Bounty – 15%
Facebook Bounty - 15%
Reddit Bounty – 10%
Telegram Bounty - 10%
Bitcointalk Signature Bounty – 20%
Translation – 5%
Linkedin – 5%
We conclude that the project is exposed to the strategic risk, financing risk and technical risk. In our view, the most extensive are strategic and technical risks, and while first could be mitigated by enhanced business strategy, the second should be carefully drafted.
Strategic risk is represented by the risk of possible loss arise from the pursuit of an unsuccessful business plan by making poor decisions, from the substandard execution of decision etc. In our view, IAGON is exposed to the strategic risk because of the lack of marketing strategy, while the market is highly competitive with the presence of large traditional players as well as some successful blockchain-based platforms. We expect that this risk is able to be mitigated or to be eased by strong technological advantage, if it’s realized, otherwise barriers to entry may be too high.
IAGON is exposed to financial risk, which is in the form of the possible lack of funding. This risk applied to any other startup, which enters into ICO market. We believe that IAGON is able to raise funds respective to its business plan and cover all of its needs.
Technical risk is a risk associated with the possible impact changes could have on a project when an implementation does not work as anticipated. We estimate technical risk for IAGON at a medium level, considering its unique technology and the resource limitation.
The overall risk level is medium. Considering both the solid expertise and experience of the team members as well as strong business model, we expect all of the risks will be mitigated.