Gems ICO overview: or how to kill the potential TOP-20 token just within two hours.
Majority of you have probably heard of Gems ICO: It's a unique project that offers a decentralised Mechanical Turk platform - similar to the one in Amazon but with several competitive advantages. For the past few weeks due to a good communication and marketing, the team behind the project was able to form an impressive and solid community: over 50 thousand active members in telegram, hundreds of reviews and articles all around the internet.
First, when I read about this project I was exited, however when I started to read the white paper of Gems, I didn't find the most crucial element of the project: Token economics and ICO structure. But we will return to this question later.
In order to get whitelisted and receive bonuses participants had to make specific tasks, that in summary could take anywhere from minutes to hours.
Today, Gems has released their ICO structure and economics - and it was enough to destroy community with over 50 thousand active members.
Why?
The total amount of tokens is going to be 8 billions tokens. Out of them, only 2 billion (25%) are going to be on the rest, while the rest (75%) would be retained by the team!
Instead of making token sale, Gems team decided to run Dutch Auction. If you don't know, Dutch auction is a type of an auction in which the auctioneer begins with a high asking price.
So what's the starting price? Well, it's..... 8 dollars!
8 billion tokens supply with a starting bid of 8 dollars per token.
Dozens of people claimed that they completed tasks after they got invited for the project. Which means that
thousands of people did thousands of work-hours for free just "to get listed".The token economics is completely illogical as it offers limited in time token bonuses when the price is not set yet.
Summary: I suggest everyone to check ICO token structure, monetization and business model of any project before you invest in it. Despite having a great technical solution for the market and nicely done marketing, Gems project lost its credibility and community trust just after releasing one statement. I liked the project idea and community, but I didn't invest or apply for listing since it's against my logic to buy tokens without any business model and token economics. I suggest everyone to avoid participating in this project. If you see a project without solid token economics - run away.