Analysis of DENT ICOAnalysis of DENT ICO
What does the project do?
DENT’s goal is to create a global exchange for mobile data where the world’s mobile data is sold, bought or donated, just like other commodities are traded today.
A lot of people have unused mobile data but those data will not be rolled over to the next month, so DENT can be a place for these people to sell their unused mobile data.
How advanced is the project?
The project is just starting out. DENT Wireless LTD, based in Hong Kong, was founded in 2014 as Commando Coder Ltd when Tero Katajainen decided to develop an automated FOREX trading system with built-in risk management functions. In 2017, the other founders invested in the company.
DENT has a roadmap but it doesn’t specify the timeline for its milestones.
Phase 1: Development and DENT user acquisition
- Organize mobile operator customers into a collective power by acquiring members with the help of the DENT token sale and other incentives, such as sign-up data bonus of operator partners
- Launch the DENT Exchange on Ethereum blockchain for buying, selling, and donating mobile data packages
- Partner with telcos to offer mobile data packages and enable user-to-user data transfer
- Lobby with public bodies, such as EU regulation and governments of key countries to discuss rules for data liberation for their citizens
Phase 2: Enrich domestic offering via the DENT Exchange
- Grow DENT community and operator partner base to allow their users to transfer data packages even across networks
- For multi-national operator partners, the DENT exchange represents an ideal platform to facilitate international data transfer for their user base
- Enable users to donate excess data as DENTs, e.g. to people in developing countries
Phase 3: Provide international data offers via DENT exchange
- Continue adding more users to the network, start interconnecting domestic DENT markets to create the international DENT exchange
- Allow users to internationally sell and buy data packages
- DENT Token is the standard instrument for world-wide mobile data exchange
How can token holders make money?
DENT Tokens will be the global currency for the exchange of mobile data packages. The possibility of exchanging a package to a more suitable one, especially in the advent of eSIMs will allow the use of multiple operators on a single phone will drive telcos to compete.
As DENT powers the platform, the more usage the platform has, the more valuable the tokens should be.
DENT has a small team of 5, 3 of whom are co-founders.
Tero Katajainen, Founder and CEO – co-founded several Internet startups in his 20-year career. He holds a Master of Science degree in Electrical Engineering from University of Tampere, Finland. Tero was also one of the first developers ever to implement direct mobile operator payment systems to consumer applications. As a specialist for transactional systems and Blockchain, Tero is the mastermind of all tech at DENT.
Mikko Linnamäki, Co-founder – serial entrepreneur with a track record of founding successful Internet businesses since 1994. Mikko is Cofounder of DOVECOT Oy, the company behind DOVECOT, the world‘s most popular IMAP Server.
Andreas Vollmer, Co-Founder – 12 years’ experience developing Mobile Apps, from Symbian in 2005 to iOS and Android today. Andreas is Co-Founder of leading German mobile app development company TDSoftware, which is developing apps for companies such as Mercedes-Benz, Audi, Deutsche Post, GLS, and others.
- One of the advisors has strong experience in the telecommunications space and may help DENT to bring partners on board.
- Network effect exists for this project – if the project reaches a critical scale, value of DENT should appreciate substantially.
I see many holes in the business model:
- If this model actually works and the price is competitive, I imagine people can just use DENT all the time – not just for traveling but for their home country as well – this is not something the telcos want.
- The cost of mobile data on the DENT exchange has to be lower than the same package directly from telcos, otherwise arbitrage opportunities exist. For example, if a telco package for 5 GB is $50 a month, then the price for the same package listed on DENT has to be cheaper, otherwise people can just buy the plans from telcos and sell them on DENT for instant profit. Hence, people can just rely solely on using DENT to buy data plans without using a plan from telco. Telcos are not going to be ok with that.
- Because larger plans are cheaper on a per GB basis, people can just buy the largest plan that’s offered by telcos and then sell it piecemeal on DENT – telcos won’t allow this to happen because no one would buy smaller plans from them anymore.
- Telcos might not want to join the DENT platform because it is going to reduce customer loyalty. Users can use different service providers easily on DENT.
For this project to work out, it is imperative to acquire a large base of users. This is a huge task but the whitepaper didn’t address how it will do it other than saying “we invite and unite users in the DENT community”. The whitepaper then says “assuming a start with even just a few million customers … reaching quickly billions of USD at stake for a telco”.
It looks to me they skim on the most important part of the game plan. Moreover, even if they can acquire a few million users, if those users are scattered across different countries, it is probably not large enough for the telcos to do anything.
I’m also not sure how user-to-user data transfer works. If a user is using mobile data provided by company A, can he/she can just transfer their spare data to someone on another network? Seems like it is very difficult to function technically.
DENT’s plans include “lobby[ing] with public bodies such as EU regulation and governments of key countries”. This seems like too ambitious a goal to me.
The project is nothing but an idea now. They don’t even have a timeline for its development roadmap so we really don’t know when the project will start generating revenue.
I don’t see the benefits of using blockchain technology for this project. DENT can use a centralized service to do the exact same thing. Hence I don’t really see the point of issuing tokens on blockchain.
The fundraising goal of $46 million is on the high side. This increases the chance that the project would not attract enough funding. This is not good for flipping.
From the LinkedIn pages, it looks like all the co-founders are working part time on this project. It doesn’t give too much comfort as to their commitment to this venture.
- Project Name: DENT Coin
- Token ticker: DENT
- Website: https://www.dentcoin.com
- Whitepaper: https://www.dentcoin.com/whitepaper
- Hard cap: 152,000 ETH (ICO contributors own 70% of total token supply if hard cap is reached)
- Soft Cap: 15,000 ETH
- Conversion rate: 1 ETH = 400,000 DENT
- Maximum market cap at ICO: US$65 million at current ETH price of $300
- Bonus structure: Presale contributors receive a 20% bonus
- ERC20 token: Yes
- Timeline: July 12 to July 26 (please refer to DENT’s crowdsale page for most up-to-date information)
- Token distribution date: not specified
Overall, I don’t like this ICO. The idea sounds exciting and that’s the reason why I decided to analyze the ICO. However, after looking deeper into it, I have serious doubt that this project can succeed.
My thoughts on buying the token for flipping and investing for the long term are as follows:
Not good because of the large fundraising amount of $46 million assuming ETH price is $300. The high fundraising amount makes it harder for the project to be filled quickly, leaving no unmet demand.
For long-term holding
Not good. As mentioned above, I just see too many problems with the business model and doubt this can work out.