Eximchain (EXC) ICO review

Review

Eximchain was founded in 2015 by graduates from MIT, Brown and Northwestern. Their project was chosen as the Grand Champion of the 2016 Boston Seagull Entrepreneur ship Contest, the Engine of Innovation Prize of the 2016 Rice Business Plan Competition, and as Finalist of the 2017 MIT $100K Business Plan Competition. They are an official candidate of the Blockchain Regulatory Sandbox Program in Guiyang, China and a member of EEA (Enterprise Ethereum Alliance).

Overview

Eximchain aims to bring visibility to the global supply chain by building a public, permissioned blockchain that will lower the financing barriers for small to medium enterprises. From supplier credit to inventory management, Eximchain’s supply chain optimization tools lets businesses connect, transact, and share information more efficiently and securely.

Traditionally in commerce, supply chain management (SCM) focuses on the material flow of goods and services, it involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption.

The recent global economic downturn demonstrated that managing financial flows within the supply chain is as important as managing physical flows of goods and services. Supply chain finance (SCF) is a set of technology based business and financing processes that allow financiers to fund an organization’s operations through its supply chain relationships. SCF enables buyers to optimize working capital and suppliers to generate additional operating cash flow while simultaneously minimizing risk across the entire supply chain. More specifically, SCF enables buyers and sellers to shrink their inventories, collect money from customers faster and delay payments to their suppliers.

What problems does Eximchain aim to solve?

Shareholders lost over $5.2 trillion in potential revenue last year due to the lack of transparency, connectivity, and agility in the global supply chain.

• The vast majority of SMEs remain unserved by existing financial sources due to the fact that financiers cannot fully asses the risks between buyers and suppliers
• Supply chain finance is expensive and complex, it takes tremendous efforts to integrate all parties with their existing operational flows.
• It is difficult to align incentives among different participants. Suppliers, buyers and financiers are independent decision makers attempting to maximize their own profits. Such independent profit maximizations often lead to poor performance of the entire supply chain.

 

How does Eximchain aim to tackle these issues?

Eximchain’s applications use state-of-the-art blockchain technology to ensure accuracy, transparency, and security. Their platform solves todays challenges by offering seamless integration into the existing workflow of SMEs by enabling developers to create customized tools for specific industry use cases.

• Eximchain offers a platform to implement smart contract based solutions on a permissioned fork of the Ethereum blockchain with support for data privacy. It will enable SMEs to gain access to affordable capital sources by giving financiers visibility into their supply chain and cashflow.
• Buyers and suppliers can automate contracting processes with the Eximchain network. They can carefully design supply contracts to maximize profit on the supplychain with more visibility into demand, inventory and upstream/downstream operations through a trusted and secured network.
• Eximchain allows developers to create variations on supply contracts secured by the network and build solutions that are customized to their supply chain.
• Financiers will get more visibility into the supply chain operations which enables them to better estimate the risk of a transaction.

 

How does the Eximchain blockchain work?

Eximchain is powered by leveraging Quorum, an enterprise-focused version of Ethereum released by JP Morgan. Quorum, and therefore Eximchain’s applications, is designed to develop and evolve alongside Ethereum. Because it only minimally modifies Ethereum’s core, Quorum enables Eximchain to incorporate Ethereum updates quickly and seamlessly.

At the most basic level, Eximchain modifies how the Ethereum client protocol enables consensus and permissions the blockchain. The Eximchain blockchain distinguishes between participants that can validate blocks and participants that can propose blocks. The latter allows Eximchain to both secure private transactions on the network and incentivize developers to participate in the evolution of the environment.

Consensus – Rather than proof-of-work (mining), Eximchain uses a vote-based consensus algorithm that add a few governance rules.

Governance – Bitcoin and Ethereum are not ready for enterprise-grade solutions, the incentives of developer pools, clients, and corporates contributing value to the ecosystem must be aligned at the protocol level. Eximchains proposed quadratic voting model allows for a series of checks and balances between nodes.

Maker Nodes (Generals) –  Maker Nodes are responsible for proposing blocks and their addresses are registered in the BlockVoting contract.The initial set of Maker Nodes is preconfigured in the genesis block and will initially be comprised by our initial token sales stakeholders, however once the network is established, this will begin to change.

Maker Nodes will have the responsibility of voting in a new block proposer every governance cycle. Nodes can opt to become Maker Nodes if they are KYC approved and voted in by an agreed threshold of existing Maker Nodes.

Validator Nodes (Soldiers) – Validator nodes are also registered in the BlockVoting contract and are responsible for voting on the validity of blocks. The validator role allows a node to vote on which block should be the canonical hash at a particular height. The block with the most votes will win and is considered the canonical head of the chain. Running a Validator Node is required to leverage the underlying privacy layer.

Like Makers, the initial set of Validator Nodes is pre-congured in the genesis block and will initially be comprised by our initial token holders, application clients, and developer pools. Functioning as validators, these nodes help to secure the network and may be voted in as Makers once the network is established. Validators will have the responsibility of voting out a block proposer every governance cycle.

Applications: The smart contract SDK layer will allow developers to build applications from basic components, accelerating development of future SCF solutions.

Developers can build the below mentioned supply chain applications on top of the Eximchain smart contract SDK:

Financing: Through instant and transparent proof of order verification on blockchain, suppliers seize early payment discounts to improve working capital and buyers seize credit arbitrage opportunity.

Procure-to-Pay: Participates can maintain an audit of the final agreed upon contract in each step of the procure-to-pay process in real-time through a trustless network and secured protocol.

Sourcing: Sourcing platforms or rating agents can use the Proof of Existence (PoE) functionality- document time stamping, verifying document integrity, demonstrating data ownership without revealing data, to provide independently veriable reputation data.

Inventory Management: By sharing real-time demand information ross the supply chain, participants can make better inventory plans and automate the reconciliation process across different ledgers and systems to save time and reduce cost.

Supplier Management: Using smart contracts and a token system, Eximchain can help buyers to gain visibility over the whole supply chain by interacting with upstream suppliers but still maintain privacy on each transaction level.

Risk Mitigation: Eximchain enables dynamic, real-time monitoring of supply chain processes to provide visibility into the whole supply chain’s operations. Participates can manage risks in one place.

Eximchain will show developers how their SDK easily supports complex multi party transactions, enabling them to build applications and other supply chain finance products on top of their ecosystem.

 

Team

The Eximchain team consists of six people with backgrounds in computer science, supply chain management, blockchain, security, networking and more.

Hope Liu – Co-Founder & CEO
B.A. from Peking University and MBA from MIT. Hope handled cross-border transactions at UBS Asia for 6.5 years. She is the Lab Lead of the North America Blockchain Association and has been working on Eximchain from the MIT Media Lab since 2015.

Juan Sebastian Huertas – Co-Founder & CTO
B.S. in Computer Science from MIT. Juan started coding at age 13 and worked as a technology consultant for a number of startups. He built a cryptocurrency-enabled game to play and distribute cryptocurrency anonymously during his junior year in college at MIT.

Jian Xu – Business Architect
James worked at IBM for 14 years holding various positions such as Enterprise Packaged Software Offering Manager, Delivery Project Executive, and Associate Partner managing key accounts in China.

Jia Zhang – Business
Jia Zhang has been in the supply chain field since 1994. She spent 7 years in ICBC managing global trade finance and international settlement. After that, she acted as the Chief Representative of MS Textiles in China for almost 10 years, managing local supplier relationships, goods inspection, and logistics arrangement. She is fluent in Chinese, English and French.

Louis Lamia – Director of Engineering
M.Eng. in Computer Science from MIT. Louis worked for Amazon Web Services for over 2 years on the Elastic File System team, helping to launch the service and working on various features, most notably encryption-at-rest. He has also been involved in teaching introductory programming courses at MIT.

Douglas Sanchez – Director of Product
After earning his B.S. in Engineering, Douglas assisted in teaching product engineering processes to senior undergradute students at MIT. Most recently he lead design at a manufacturing digitization startup from pre-seed round through series A. He continues to mentor students in product design at MIT.

The team is supported by an advisory board with extensive experience in fintech and startups.

 

Token distribution:

Category                                Percentage   EXC

Investors                                40%              60,000,000

SMEs / Early adaptors        20%              30,000,000

Team / Advisors                  20%              30,000,000
Hedging/Reserve                10%              15,000,000
Bonus                                   10%              15,000,000

Team, bonus and advisor tokens are vested for a period of 4 years.

Use of Proceeds:

Platform Development: This includes maintaining competitive salaries for top talent in China and the U.S. paying for software hosting, accelerated development of legacy system integrations and acquisition of hardware. The hardware and hosting will be offered to anchor buyers and that will need stand- alone computers to manage their respective supply chains on a global scale.

Build the Supply Chain Ecosystem: This includes efforts to onboard SMEs through incentivizing early stage users and on-going business development to onboard suppliers, buyers and financiers. Eximchain will reserve a proportion of tokens for this purpose in a secured wallet to ensure fair distribution.

Operational Expenses: This includes basic operational costs such as office space, legal costs to pursuing and obtaining required licenses, and security measures for the value of the token including hedging mechanisms.

How are the EXC tokens used?

Eximchain will be offering Eximchain Platform Native Tokens that will be used to pay network fees, validate state changes, and execute governance. The native tokens will also be used to access applications built on the Eximchain network, such as SourceAssist and solutions developed with the Eximchain SDK.

Token Structure EXC tokens are ERC-20 compatible tokens. These tokens will be distributed on the Ethereum blockchain pursuant to a related ERC-20 smart contract, they are redeemable for Eximchain Platform Native Tokens on the Eximchain Platform upon network launch.

Following the close of the Token Generation Event, the EXC Tokens will become fixed (non-transferable) on the Ethereum blockchain prior to our Mainnet Network Launch in Q2 2018

Opportunities

Efficiency improvement: Small and medium sized businesses contribute up to 60% of employment and account for 40% of GDP globally. An increase in productivity through efficiency improvements in the supply chain will have a positive effect on employment and global gdp.

Working product: They have a MVP with mainnet release expected in Q 1 2018
Highly customizable product: Their solution is sector agnostic and highly customizable through their SDK layer

Established Expert team: Experienced management team with lots of academic experience in building infrastructure platforms and supply chain solutions.

Concerns:

Technology Risks: In some cases the technology is immature and unproven, including the Ethereum blockchain platform and various open source software applications and libraries. If those core technologies do not perform according to Eximchain’s Platform’s needs or expectations, they may be required to change the specifications and to reduce or eliminate features on the platform

Smart Contract risks: Certain key features of Eximchain will be implemented in smart contracts on the Application and on the Ethereum blockchain platform. The nature of smart contracts makes them difficult to change and to fix bugs, improve performance, or add features and functions.

Regulatory Risks: The regulatory status of Eximchain, and the Token Sale is unclear or unsettled in many jurisdictions. It is not known if, when, or to what degree different jurisdictions will interpret existing laws and regulations or adopt new laws and regulations that could adversely affect Eximchain.

Lack of Market Penetration: This project depends on attracting users at the intended level or at a level sufficient to become or remain useful or viable. Any such lack of use or interest could negatively affect the development of Eximchain and/or the value of Eximchain and/or EXC.

 

Conclusion:

Overall we are bullish on this ICO, the team behind Eximchain has received valuable mentorship and guidance from the MIT Media Lab Digital Currency Initiative, MIT Center for Transportation and Logistics, and Plug And Play Fintech Accelerator. Their project won several contests which shows that they offer a real solution for real existing problems. The team also has a vesting schedule of their team/bonus/advisory tokens of 4 years which shows that they are committed to the project.

Our Rating based on our pointing system is as follows:
Eximchain gets a rating of 85 %

We are investing in this ICO!

This is not investing advice, we merely show you in what ICOs we are investing in. As always do your own research!