DateCoin ICO Review: 50 Shades of Why

DateCoin dare to venture into the burgeoning rich-man-meets-pretty-girl industry. We see sparks, but do you smell smoke?

1.ICO Overview

DateCoin operate within the Online Dating sector. Specifically, they have been operating in a niche sector, the casual hook/affair sphere, aimed at successful men looking for young, beautiful girls.

Datecoin want to enter the Blockchain/AI/Crypto Online Dating space, which is already filling up with players like Hicky, Matchpool, Ponder, Luna, Viola.

2.ICO Proposition

Ticker: DTC

Token Type: ERC20

Token Price: 1 DTC = 0.00025 ETH

ICO Soft Cap: $4m

ICO Hard Cap: $20m

Total Tokens: 466,153,846 DTC

Tokens for sale: 303,000,000 DTC

Investor Proposal

Warning: Datecoin have a diagram in their White Paper showing the availability of tokens substantially decreasing when they reach 19m users.

DateCoin state the total size of their User market is 50m - 60m. They aim to capture 40%-50% of this market. That would deliver them a total user base of 20m - 30m users.

I’m not sure, looking at that chart above, whether DateCoin will actually have enough tokens left in circulation to scale to 30m users.

Total tokens left after ICO = 163m tokens

Then the remaining tokens get accounted for like this :

  • 20% team/advisors = 32.6m tokens
  • 4% marketing = 6.5m tokens
  • 1% bounty = 1.6m tokens
  • 10% reserve = 16.3m token

That leaves 107m tokens unaccounted for. This seems plenty to cover adding another 11m users, to reach a total of 30m users but as the table below shows, users need multiples of tokens to subscribe and use DateCoin’s services. 

A lifetime subscription costs 4000 DTC.

Imagine if the last 11m users all want to take a lifetime subscription.

11m users x 4000 DTC =  44 billion DTC tokens.

That’s substantially more than the 107m tokens DateCoin would have left after ICO.

Startup Proposal

DateCoin are using their ICO to fund expanding their existing Dating App, Denim, to include Blockchain, AI & Crypto capabilities.

Industry problems DateCoin intend to address are :

  • Fake profiles and fake photos
  • Data hacks / data leaks
  • Low search relevance

How do they intend to solve the Fake Profiles & Photos?

  • Identity verification

How do they intend to solve the Data Hacks / Data Leaks?

  • Chat encryption

How do they intend to solve Low Search Relevance?

  • Face Recognition Matching using face recognition
  • Semantics Matching - putting people together who talk about the same topics
  • Morphological Matching - putting people together who talk about things, personal preferences, in the same way, with the same approach

3.Feasibility of idea/business model in current market

Feasibility of the Idea

  1. According to DateCoin, this Startup, and thus ICO, is to target ‘’successful men and spectacular girls” because DateCoin believe “in today’s world a lot of women are seeking for relationships with wealthy men capable of solving their problems.”

OK, let’s discuss this, withholding all moral judgment.

Firstly, Denim and by extension DateCoin only KYC females. Maybe it’s because DateCoin believe only females commit online dating fraud (one of the areas they want to tackle) but the other explanation is that they only KYC females because they are filtering women for shaggability (is that a word?).

Ironically, if what DateCoin say is true, that beautiful women are happy to trade themselves in exchange for being financially ‘sponsored’ then it would seem to me the men on DateCoin need KYC-ing a lot more than the women.

Why? Because the men have to guarantee they are successful, and highly financially solvent.

So DateCoin, on behalf of all these women, we would like to see the men’s salary slips, bank statements, property & transport assets, perhaps credit score, details of their wardrobe, where they dine out, where they vacation.

That seems equitable to me!

  1. DateCoin state they don’t KYC men on their platform because men automatically pass the KYC test by being able to afford their expensive premium subscription fee.

Datecoin’s top subscription costs 4000 DTC.

DateCoin state 1DTC = 0.00025 ETH

4000 DTC = 1 ETH = today that’s $700 for DateCoin’s top subscription. It has no expiry date; it’s a lifetime subscription.

Compare this to up-market introduction sites like ‘Berkeley International’, which also claims to represent successful men. Their membership is £6,000 per year.

Think of top London matchmaking agencies, which charge up to £30,000 and represent millionaires.

How can DateCoin state the ability to afford a $700 membership means they don’t need to KYC the men, because it proves the men are successful and financially solvent? Surely that’s a joke?

Think about it, the sort of beautiful girls who use these sorts of dating sites want to be spoilt, pampered and gifted. Normally with Louis Vuitton handbags.

Maybe it’s me, but I don’t think these women would consider the ability to afford $700 as a benchmark of someone wildly successful. That’s the same price as a basic handbag for these women!!!!

Another thing puzzling me is why Datecoin want to conduct the verification of the females themselves.

Why not simply allow females to import their existing Blockchain identity from another supplier? Isn’t that the whole point of Blockchain, that it reduces duplication due to something being stamped once on the Chain?

Datecoin complain in the White Paper about the resources required and expense to verify, so why haven’t they partnered with someone like Shocard?

I’m not sure that leaving it to the community to KYC your users works.

  1. The other issue I have is this startup is not a mass market. It’s niche. Why? There are only a small number of women who are going to be willing to join a site like this.

Even if DateCoin were correct that ALL women were looking for successful men to solve their problems, only a minority of women would be blatant enough to get on a site like this and openly advertise that agenda. Because by default, the site would position them as gold diggers or whores. Sorry, but I base that on the tone and language DateCoin have used throughout their White paper when describing their Denim business.

Then there are the men!

A lot of successful men abhor the idea of gold diggers and any man looking for a relationship based on trust wouldn’t go shopping for his future partner on a site like this.

Of all the markets DateCoin play in, China is probably the best match for this type of proposition if they are going to port the Denim concept (rich guys, beautiful young girls) onto Datecoin. Why? China creates a new millionaire every week. It has the highest per capita of billionaires anywhere in the world.

Like India, China is traditionally a dowry market. In China, the price to secure a bride, through gifts and money, has added two percentage points to China’s GDP (according to Peking University). In China, women’s top three non-negotiable requirements for dating are 1/ Property ownership, 2/ Nice car, 3/ Good salary.

In China the biggest dating operator is Baihe.com (not Momo as Datecoin states). Baihe.com was the mobile leader and it merged with Jaiyan, the market leader,  a couple of years ago.

Baihe includes credit scores against profiles. As of 2016, 10% of China were using Credit scores for dating on Baihe.

Then there’s Luxy in China. It’s a dating app for people earning over $200K a year that has built in identity and wealth verification, and it accepts cryptocurrency.

So if China is DateCoin’s best match, market-wise, but it’s already got players doing what DateCoin plan to do, I don’t see the point in funding their ICO.

 4. Datecoin plan to tackle the fake profiles and data leaks.

In 2015 Ashley Madison, the dating site for married people wanting affairs, had a enormous data leak. In 2017, the US government ordered Ashley Madison to pay $11.2m in compensation to Data Breach victims.

But the no.1 problem in Online Dating isn’t data hackers, it’s conmen. It’s people creating fake profiles in order to deceive or defraud unsuspecting members of the general public.

In 2015 alone, the Chinese Government shut down 193 Online Dating sites because of this problem.

In 2016 the FBI reported it’s Internet Crime Complaint Center received 15,000 romance scam complaints ― a 20 percent increase over the previous year. Reported losses exceeded $230 million, but the FBI puts the true number much higher, estimating that only about 15 percent of these crimes are even being reported.

So, DateCoin tackling fake profiles is excellent. However, they aren’t the only Dating App doing this.

Competitors

Datecoin deliberately omit from the White Paper other Online Dating companies using Blockchain, Crypto & AI. So they give the impression, in their White Paper, that their competitors are the legacy players like Match, eHarmony, Tinder, etc. Competitors who don’t use Blockchain or Crypto.

However, DateCoin does have some direct competitors, some of whom, like Matchpool, have over 12 month headstart on them to capture users on the Blockchain.

Feasibility of the Business Model

  1. DateCoin positions itself as a successful team with an existing successful business model because “Denim app is the market leader of mobile dating in Russia”.

 OK, let’s verify that.

 

Clearly, Denim is not the market leader in mobile dating in Russia today.

  1. DateCoin is asking you to invest in their ICO because they are experts in their industry.

OK, let’s verify that.

Datecoin have valued the Global Online Dating market at $6 billion by 2019.

Techinasia.com report in 2015 the Indian Online Dating Market was worth $27.4 billion, based on 115m Online Dating users, spending an average amount of $239 a year.

Now in that same year, the USA market was only worth $2.3bn ( compared to India $27.4bn) yet in the White Paper DateCoin clearly state the USA is the world’s biggest Online Dating market.

2018 Techinasia forecast the Indian Online Dating market will grow to $82.4bn.

The Chinese online market will be $5bn in 2018 according to iResearch.com.

So clearly, the global online dating market cannot be $6bn by 2018 (as DateCoin state) when India and China will be worth $87.4bn on their own.

4.ICO Team

Founders

1.Nikita Anufriev: I don’t really see this guy as a core technology person. He is a digital marketer who built websites, did SEO for clients. He doesn’t have a track record of working inside Tech companies, of developing stuff.

I think he jumped into Online Dating purely as a cash cow. I think he sees DateCoin much the same way.

2.Alexey Sinitsyn: This guy looks like he has 30-40 years of business experience judging by his age. Sadly we can’t verify any of the claims in the White Paper about his background because he hasn’t bothered to fill in his LinkedIn profile.

3.Maxim Kozlov: 9 months experience as a bitcoin miner.

Senior Team

CMO - can’t find any data for her on Linkedin

Product Director - good for UX but he’s never even been a product manager.

Traffic manager - claims to have ten years experience but didn’t fill in his LinkedIn profile.

PR director - 3yrs previous experience

5.SWOT

Strengths:

None, given the things they solve are already being tackled by their competitors.

Weaknesses:

Tacking DateCoin onto Denim’s Hookup app. This restricts the startup from being scaled to ‘mass market’.

Opportunities:

China and India are huge opportunities for Datecoin. Yet in DateCoin’s roadmap, neither country is listed as a first-stage country they plan to enter.

Threats:

There are already companies doing what DateCoin, with Denim, want to do and these competitors have up to a year’s head start on DateCoin development wise.

6.Conclusion

Datecoin’s product ambitions aren’t bad, they are the right solutions to solve problems in Online Dating, the problem is other players have also thought of the same solutions and have a head start on DateCoin.

Other players also aren’t limiting their user base to a niche section of the population ie. wealthy men. These players are targeting everyone.

Lastly, DateCoin clearly are local players because they haven’t sized or valued the online dating market properly. They have also clearly ignored product opportunities in their niche that would come through verifying the men’s financial data. So the impression I have is these are local Baltic guys, trying their luck with very basic business skills.

Would I take a punt - no I wouldn’t. They lost me as an investor when they started generalizing about women and basically sounding like pimps with an IP address.

7.Score 0 – 5

  • Idea/Business Model 2
  • Scope/Potential 2
  • Team/Advisers 2
  • Token Economy 2
  • Marketing 1
  • Community/Communication 1