Crystal Token: New Proof of Stake paradigm or risky venture?

Crystal Token is a cryptocurrency token in the field of smart investments with the concept of Virtual Staking and different investment plans to satisfy the needs of all investors who desire a solid and constant passive income source. Crystal token is an ERC20 token that works on the Crystal Lending platform, a short-term crypto lending program. The platform combines traditional lending program with a virtual staking program, which creates a hybrid ecosystem for the users to lend, trade or exchange the Crystal Coin (CYL). Trading as a service feature will allow investors to perform multi-currency automated trading exploiting an AI driven trading bot.

ICO information

Crowd-sale start and end date:

April 26th – June 30th

Price per token (Main sale): 0.001 ETH

Price per token (pre-sale): $0.50

Hard Cap: 7.000.000 tokens

Soft Cap: 5.000.000 tokens

Total supply: 28.000.000 tokens

For sale: 7.000.000 tokens

Project is based on the platform which includes: 2 tokens (CYL and VCYL), exchange, trading bot and lending,

Crystal Exchange-the platform’s internal exchange will allow for the trade of ETH and CYL tokens at a specified window period.

What CYL can be used for?

CYL token- as the primary token, CYL is used as a part of Virtual Staking contracts.

VCYL token- stands from “Virtual Crystal Token” and it will pay the daily interests and referral bonuses.

Official
Telegram Channel( Click here)

Official website: (Click here)

Strong sides:

• Allows to earn up to 2% interests daily
• Includes three different plans: Silver plan, Gold plan and Crystal plan.
• Has trading incorporated trading bot.
• Amount of active users: 24 thousand people, with over 5.8 thousand people subscribed for Crystal Token telegram channel.
• Offers daily interests and good passive income source;
• Unsold tokens would be burned;
• After ICO, portion of tokens are planned for burn once the profit is generated;
• Small and limited supply of only 28 million tokens;
• Demo is available for public;
• Small Soft Cap
• Great entry conditions for early adopters of the platform

Negative sides and risks:

• Team is not listed on the website, and it’s hard to evaluate proficiency and competency of Crystal Token core team;
• No partnerships with large network;
• Token is unlikely to be listed on large secondary exchanges like Bittrex, Bitfinex, Poloniex etc.
• Little information about team members and their background;
• Project has low hype
• High risks associated with investments and high returns

Conclusion: Project has some potential for early adopters as it offers passive income source with a solid token appreciation model based on scarcity, limited supply, burned tokens and market factors. Crystal Token implements hybrid concept of stacking. Since this project offers you possible high daily returns the risks involved are high. Additional risks come from too-profitable business model and absence of transparency around the core team.This projects fits those who looks for additional source of passive income and possible short-term returns. I like the concept of the project and their efforts to form loyal and solid community around the project, which indicates long-term goals of the team. To clarify all risks and uncertainties I contacted James, who is CEO of Crystal Token and asked him several questions.

Our interview with CEO of Crystal Token:

• James - CEO of Crystal Token
• Vladyslav - ICO analyst and investor

Vlad (V): A number of unused tokens will be periodically burned. This will increase the value of the token, due to its induced scarcity. Do you have specific strategy or formula which you will use to determine amount of tokens for burn?

James (J): During our ICO, each day, a predefined number of tokens will be allocated, and all the unsold tokens will be burned. As for the token burn policy after the ICO, we still did not plan a specific formula, but the rationale was that, since we are going to perform trading on the internal exchange ourselves, we aim to burn a portion of our tokens which we bought using the profit generated in the platform.  

Vlad (V): Your team aims at developing a marketplace and, in the long term, to distribute debit cards which would allow loyal users to spend their tokens directly in the offline shops. Considering that your team is anonymous, how do you plan to comply with AML and KYC rules. Won’t that be a problem if you want to have your own debit card?

James (J): Marketplace and debit cards are not the priority right now, since they are expected after we design all the main features. Being anonymous is not a mandatory condition for the whole lifespan of the project, but we need to ensure to come out at the right time, once we are legal proof and, thus, we can guarantee the continuity of all our services.

Vlad (V):  In your WP you mention plans to develop your own Trading Bot. Instead of developing a new bot, why don’t you want to acquire existing trading bot? Wouldn’t be that cheaper and more practical?

James (J): The truth is that publicly available trading bots, even those available as a paid service, are simply not performing good over time. Our team includes a few data analysts, so our purpose is to develop from scratch for maximum flexibility, and continuously improve the code. Moreover, developing our trading bot from scratch is necessary in order to integrate the more sophisticated Machine Learning techniques we mentioned in our Trading Leaflet, which are cutting edge with respect to existing trading bots.

Vlad (V):  How do you plan to implement Artificial Intelligence / Machine Learning techniques in your platform? Are you going to use separately developed Ai, scripts or use specific software?

James (J): Although we will exploit state of the art frameworks and existing low level programming primitives, our focus will be custom development using our data science expertise. The final product is likely to feature different modules developed in different languages, which execution will be orchestrated as a workflow. Additional details on the algorithms we want to implement in the advanced version can be found in the Trading Bot Specifications leaflet on our website.

Vlad (V): According to your White Paper, the actual percentage of interest can reach up to 2% daily. While it sounds impressive, I have some doubts regarding this claim. Such a high interest returns are typical for Ponzi Schemes. For example, Bitconnect also offered high daily returns

James (J):  Up to 2% daily is just the upper limit of the interests received. It is not guaranteed, and it will surely oscillate, as already shown in the platform. Our “pure reinvest” feature compounds daily interests, but up to 2% daily overall, as stated in the whitepaper. We do not provide a multi-level referral scheme and, differently from Bitconnect, we have a real trading bot which activity is publicly shown on our dashboard. Moreover, our project plan includes the introduction of multiple business models and every initiative is taken to guarantee the long-term sustainability of the project.

Vlad (V): Could you tell us more about Virtual Staking principle and how will it work on your platform? Provide at least one, real-life example

James (J): Virtual Staking is a smart investments program inspired by the well-known Proof of Stake (PoS) concept. Differently from pure staking, which rewards over time an amount of the same tokens staked by the users, our Virtual Staking program features a virtual meta-currency (VCYL) tied to Ethereum (ETH), which value is equivalent to 0.001 ETH. Users can stake their CYL and VCYL tokens for a specified amount of time and they will receive a variable daily interest in VCYL based on the revenue generated by the platform with trading operations. Overall, Virtual Staking plans satisfy the needs of investors who desire a passive income source. This service is similar to investing in a hedge fund. Investors without an expertise of the stock market give their assets to a specialized company, which in turn invests in a well-diversified portfolio of cryptocurrencies, ICOs or speculative trading and arbitrage operations. An example scenario could be a user who opens a virtual staking contract with 1,000 CYL worth 1.5 VCYL each, leading to a contract value of 1,500 VCYL. Everyday, a variable interest is credited in VCYL. In order to withdraw daily interests, the user needs to convert VCYL to CYL tokens and then sell CYL tokens on the internal exchange, to obtain ETH. As an alternative, VCYL tokens can be directly converted into ETH at the rate 1 VCYL = 0.0005 ETH. At the end of the contract he will also receive the capital back (1,500 VCYL).

Vlad (V): Considering anonymous team, won’t that scare away large exchanges like Bittrex, Bitfinex etc? How do you plan to get listed on large exchanges?  (NOTE: By the time of article publishing, James already revealed his identity)

James (J): We didn’t ever mention any intentions about being listed on Bittrex and Bitfinex. Our whitepaper mentions a few exchanges which are feasible based on the acceptance of previous projects in our category. Moreover, we want to put emphasis on our internal exchange, which is slightly different from usual exchanges, since it is based on time windows. Users can perform trades at any time of the day, but the final price per token for a time window will be determined by the amount of ETH offered during the time window. Users will be able to see in advance the updated estimated amounts, before confirming their trades. We will also perform buy trades ourselves on the exchange, based on our revenue. Additional details are provided in our whitepaper and a demo is available on our dashboard. We believe that our exchange and its related automated mechanisms will help in sustaining the price of the token, consequently protecting ICO investors.

Vlad (V): Since your team is anonymous, how can people trust you and make sure that you are not scammers?  (NOTE: By the time of article publishing, core team members already revealed his identity)

James (J): The choice of being anonymous relies on the consideration that regulations are unpredictable and constantly changing in this environment. Especially considering the staking service, anonymity is quite common for other projects as well, since institutions opposed themselves against platforms and services for passive income. Therefore, our main goal was not giving to anyone the opportunity to shut down the service, now or in the future. Our vision is that we can build up a reputation with facts rather than names and faces, which absolutely do not guarantee the good outcome of the project. In fact, there is an endless list of ICOs with a declared team which already exit scammed. Anyway, since our community asked for it, our CEO (James) showed himself in a face interview. Our platform has been built from scratch and it is already functional. From this point of view, we have worked for months before approaching the market, differently than many other ICOs that collected funds and put people on hold. These facts should guarantee that our team truly has the expertise mentioned in the white paper, and that the realization of what is mentioned in our roadmap is feasible. We have put a major effort in the backend, where you will find that the core functionalities of the platform are already designed and working.

Vlad (V): Thank you for your time and answered questions

James (J): You are welcome!

If you want to get more information about Crystal Token, I suggest you to watch this YouTube interview with James:

https://www.youtube.com/watch?v=kJCQUmnTH6c

Analysis was done by Vladyslav Antonov (click here to subscribe): investor, entrepreneur and ICO analyst.