Adel ICO: Due Diligence

Cointelegraph has conducted a review of the ongoing ICO campaign of Adel, and we are now making it available for our readers.

ICOs are a new paradigm of fundraising, in use with many young Blockchain-based startups. During one, the company in question releases a cryptocurrency token and sells a part of the total supply to its intended audience.

ICOs do not have any specific legal regulations associated with them, and as such can be a risky thing to participate in for the investors. In order to not fall prey to a fraudulent campaign, one should conduct due diligence and stay on the lookout for any possible red flags.

Cointelegraph has performed its own review of the ICO campaign of the project called Adel, which is currently underway. We have decided to make it publically available, for the consideration of potential investors.

While reviewing a Blockchain project undergoing an ICO, the two primary goals are to evaluate the chances and the extent of its potential success and the risks associated with investing into it. As you are doing that, it is important to pay attention to several key factors. Let’s divide them into several groups: the project, the team, the company, and the technical details of the ICO.

We will go over the specific aspects of each of these categories, looking for the positive and negative factors, as well as red flags pointing to possible mismanagement or fraudulent activity.

The project

Adel is a global community built on the NXT Blockchain, focused on facilitating the development of various Blockchain-based projects into real-life use cases. The project encompasses a wide range of features, and can be described as a “Blockchain-oriented business incubator.”

Among Adel’s features are:

• The Board, comprised of several people, who are experts in various aspects of business. The proclaimed purpose of the Board is to direct the development of the community and provide guidance to the Blockchain-powered projects whose development will be facilitated by Adel;
• A thoroughly developed and described process, which Adel will use to help the new Blockchain-based companies throughout their early existence, from the stage of an idea to a fully functioning use case;
• Adelphoi, a cryptocurrency token which will be used to power the inner workings of Adel’s ecosystem. It provides an easy and transparent way to exchange value between the participants.
• Three planned projects, whose implementation is set to begin right after the end of the three rounds of funding of Adel. Their descriptions and implementation plans are available on Adel’s home page as project 01, project 02 and project 03.

On the positive side:

In the pre-Blockchain industries, business incubators have proven themselves as an excellent tool for facilitating economic and technological progress. The idea of creating a similar organization oriented on the Blockchain projects is very relevant, given the fact that the field is mostly comprised of very young companies, a lot of which are looking for support and guidance.

Not merely looking for profit, Adel focuses on the deployment of working, real-life use cases of the Blockchain technology. This approach is expected to be highly beneficial not only to Adel but also to the industry as a whole.

Transparency is proclaimed as one of the core values of Adel, and the availability of Adelphoi, a cryptocurrency token, ensures the necessary openness of all transactions inside the project.

There is a negative side to the project, however. The idea of a Blockchain-oriented VC fund/business incubator is not a new one. There are several other projects, which may be different to Adel in many aspects, but are quite similar in their mission, which is to fund new Blockchain-based projects, help them grow, and make a return at a later stage.

One example of such project is Blockchain Capital, which has already managed to secure $10 mln during an ICO in April. So, ultimately, while the idea behind Adel is very relevant, the project is going to face serious competition. Its ultimate success will depend on the team, the Blockchain projects it will take on, and the power of the community it will build.

The team

Information about the team is available on the homepage of Adel. It includes many professionals of business, marketing, software architecture, law, etc. Their claimed specialties and prior working experiences make them sufficiently qualified to implement the project.

There is, however, one negative aspect associated with the team, specifically the Board: there is not a lot of info available about the Board members.

The cryptocurrency community values transparency incredibly highly and for a good reason. If the founders of a project are transparent about their names, identities and past experiences, they have a reputation to lose in case of mismanagement or fraud and are as such stimulated to perform as best they can.

Conversely, in the case of Adel, not much is known about the Board members, so they stand little to lose when it comes to reputation if something goes wrong.

Firstly, Jan Lamser seems to be the only Board member who has had prior experience in the blockchain industry. It’s claimed on the website that he is a “Fintech entrepreneur and leading spokesperson for Blockchain innovation in Central and Eastern Europe.” However, not much information can be found online to back that claim. The few things which are available are Mr. Lamser’s LinkedIn profile, and several speeches in an unknown language (presumably Czech), which, on the surface, do not seem Blockchain-related.

Similarly, not a lot of info is available on Gabriel Dusil. There are two blogs available, authored by him. One is supposed to cover all aspect of his professional activities but only Adel-related posts can be found on it, which raises unanswered questions about his prior business experience. The home page of his other company, Eurostartups.tech, is also not very informative, conveying little about both the business itself, and Mr. Dusil’s person.

This seeming lack of proof of the Board members’ identities, qualifications and prior experience is a significant problem, which makes the investment into the project more risky. The claims made on the site are almost the only source of information about the Board members, and one should consider whether they are sufficient enough, before investing into the project.

The company

The legal entity behind Adel is ADEL ECOSYSTEM LIMITED, an LTD registered under the laws of the Isle of Man, under the registry number 131257C.

The records are present on the official registry, and no legal charges are present against the company as of the time of writing.

The legal entity is very young, having been established on March 17, 2017. However, that fact alone does not represent any cause for concern.

The technical details of the ICO

Adel plans to secure funding via three ICO rounds. During each of these rounds, 33,333,33 Adelphoi tokens will be sold to the public, totaling 100 mln across all three. The first round has already begun on May 1, and within the first four days, the campaign has managed to bring in more than 140 Bitcoins worth of contributions. The current round of ICO is planned to last until May 31.

The company has implemented a strict AML policy and requires investors to submit their ID’s before participating. Any person who invests more than one Bitcoin during the ICO will become a stakeholder, with full voting powers in regards to Adel’s future decisions.

As we have said in one of our previous articles, there are several important things, which are expected from a Blockchain project conducting an ICO.

Firstly, a project has to provide a range of documents which describe its idea, product, business model and its long-term goals. These documents are primarily a Whitepaper and a Roadmap. Adel has covered the former with a significant degree of redundancy - there are nine whitepapers available on its homepage, describing in thorough detail everything associated with the project’s vision, management structure, decision making and so on.

However, an explicit roadmap is unavailable, which is unattractive from an investor’s standpoint, as it makes the project’s goals unclear and its future uncertain.

One of the most critical aspects of an ICO is the availability of an escrow wallet for contributions. During an ICO, investors’ contributions are usually collected in a special kind of wallet, protected by several keys, which are held by different persons. In order to access the money, one needs to use a certain number of those keys.

As covered on the FAQ page of Adel, its ICO employs a five out of six escrow wallets. This means that there are six people holding their secret keys and five of them are needed in order to access the stored money.

Cointelegraph has got in touch with Bas Wisselink, one of the key holders and also a known member of the Advisory Board of the Nxt Foundation. He has confirmed the fact that he, and Yassin - another key holder - are indeed involved in the ICO and are holding the keys to the escrow wallet.

This approach provides a high degree of security for the investors’ funds. The Board members of Adel will be unable to take the contributions out of the escrow wallet without the keys of the aforementioned people, making any fraudulent activity highly unlikely.

Conclusion

Overall, Adel’s ICO seems to have good potential for success. There are not a lot of security concerns - the primary one being lack of publically available information about the Board members. However, the escrow wallet with confirmed key holders outside of Adel’s team ensures that fraud is not an issue.

The absence of a roadmap leaves some ambiguity in regards to the project’s specific goals. It is up to an investor to evaluate the project’s chances of success. But given the highly relevant idea, Adel is based on, the thorough way in which the whitepapers describe its vision and business model, and a highly qualified team all indicate that the people behind the project are serious about what they are doing.

If you are interested in participating in Adel’s ICO, feel free to conduct further research on their website, and on any other sources available online.

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