Honest Smart Valley ICO reviewKiku
Note: this is an English translation of the Russian article we wrote recently with an in-depth analysis of the Smart Valley ICO.
This review has been prepared by "McAfee Approves" community with the support of the Golden Borodutch Telegram channel. For the convenience of the readers the review structure is divided into five parts: product, advisors, team, legal part and conclusion. We request the project team to answer all the questions in bold in this review with a separate public document.
Smart Valley (SV) is a rating agency, and a labour market, and an internal token exchange, and an ICO financial support fund, and an ICO conduction support services provider, and a database of the startups seeking investment. Yes, that's a lot of work to do, but it doesn't seem to bother the SV team at all. These guys think that, having gathered investors, experts and projects on one platform, they can improve and simplify their coordination with each other.
Let us analyse the services emphasized by the SV team in the White Paper.
- Scoring system — a service for assessing the projects quality. It consists of the decentralized assessment from randomly chosen experts, mathematical algorithms and user voting within the platform. Here are two examples of scoring systems developed by SV experts — Joys Digital and Ukit AI. However, these ones are only prototypes (not ready products) that are promised to be improved.
- Escrow service for the completed work. All disputes arising between the client and the contractor will be settled by the arbitrators randomly chosen by the platform. After a dispute is resolved, remuneration will be paid to the arbitrators depending on the total transaction amount. The weight of each voice will be defined by the arbitrator rating within the platform.
- Experts market — a place to find job for jobseekers and experts/contractors for projects. The main feature of this labour exchange is the transparent rating system that makes monitoring of experience and last projects of any expert possible. The SV team has promised to describe the service in more detail when the token sale is over.
- Investment tools — the database of crowdfunding projects which have undergone scoring and are in need of financial support. Unfortunately, it was unclear from the White Paper what exactly these tools are.
Two more services were also mentioned in the SV White Paper: Financial center and Free Token Place. And this is where you actually going to need Smart Valley token (SVT).
The first service will act like the on-request charity foundation for formation of the Smart Valley platform community. It means that if the project has no money to pay for expert scoring, it can submit a request to this foundation. If the request is approved, in exchange for financial support the project gives to the foundation tokens worth five times the scoring cost.
After that, when scoring and token sale of the project is over, tokens it gives back go to the Smart Valley internal market. And here comes Allotment, the mechanism of free token distribution among SVT holders. Those holders get access to internal market where they place their bets in unburnable chips (SVTs) on tokens of the projects they find the most interesting. When making a bet, SVTs are just frozen for a month in a holder's wallet. The essence of the mechanism is that more SVTs you place on a token, the bigger percent of tokens from the general pool you get. The whole ladder of free tokens goes back to the Financial center which sure won't last forever since it's formed only once and never is replenished.
Before public token sale the project White Paper has been significantly changed and the team has fixed a few obvious holes. But still there is some uncertainty, and we are going to go through these gaps when putting questions to the SV team.
1: Scoring system
- When the Financial center funding will run out, is it going to be closed? Will Free Token Place be closed, too? What will be the point of SVTs then?
- Will projects be able to pay for scoring only in Ethereum?
- What is the average price and time needed for scoring ?
- What will stop the experts from contacting the project team and requesting a bribe for positive scoring?
- How can we assess projects using mathematical algorithms? Tell us about a technical part of these algorithms. What technology stack will be used for its implementation? Who will be doing this and how experienced these experts are in this field?
- Will any user be able to participate in popular votes for the project? How will votes be protected from cheating?
- Will a project or experts have an opportunity to get the name of other experts in scoring?
- If there are several experts in each scoring, which one gets to write the main conclusion?
- How will the experts be verified? What criteria are you going to use?
- Besides email, what are the ways to receive notifications of a project scoring application for experts?
- Will the Financial center provide an opportunity to order a private scoring so it wasn't published? If yes, will this scoring be decentralized?
- What categories of experts are you planning to provide?
2: Secure transaction
- Will the mechanism of secure transaction be implemented by means of the smart contract? If yes, can we see its code?
- In order to use this mechanism, does the payment have to be made in SVTs? If yes, then isn't it too complicated for a client? Trade their fiat for cryptocurrency, get it to the exchange, trade crypto for your tokens, then withdraw tokens to your platform and only then make contract with contractors.
- What programmers are going to work on implementation of this mechanism? What experience do they have crating such systems? Please, specify the links to their last projects.
- Are the arbitrators going to know names of clients and contractors?
- What will stop the arbitrator from contacting the client or the contractor and requesting a bribe?
- What fee from the transaction amount will be paid to arbitrators as remuneration for dispute resolution?
3: Market of experts
- Will the expert have an opportunity to conceal the project which he's working on? For example, due to signing the non disclosure agreement.
- What categories of experts is labour market going to support?
- How will Smart Valley monetize this service?
4: Investment tools
- What exactly does backers toolkit include ?
- In order to pay for scoring, what wallet will the project send its tokens to? Will you register wallets on different blockchain every time? And where will you send these tokens during free distribution among SVT holders?
General questions about products:
- It's specified on the website that the project has gathered applications for $248,182,757. Can you prove this number? How were these applications verified?
- Why did your project set the hard cap to $60,000,000 exactly? Why did you double it after Pre-ICO?
- Can we see any proofs that your ICO has already gathered $3,000,000?
The way MVP Smart Valley looks like right now is the level of the first project for a beginner developer. We can't even call this prototype an MVP since at this stage it doesn't bring neither benefit, nor money. Now it's just an ICO list which makes it unclear in which way the blockchain will be involved in the process. The same is true of its code, that is actually open source. From the code it becomes clear that their MVP is just the database with information on ICO projects and an option to change it by administrators. It's not interactive whatsoever.
- Why do you call a simple list of projects from the database and their poorly done web code an MVP? Doesn't it seem to you to be beneath the project's dignity?
There are seven advisors in the project. We contacted them on Facebook, LinkedIn and Telegram to confirm their participation in the SV ICO and to find out what are they really doing in the project. This review will be updated as we receive more responses from the advisors.
- Mauris Gindi [in|tw] — a sales consultant. We've asked Mauris in LinkedIn what problems does he advise Smart Valley on. No answer was given.
- Anti Danilevsky [in|tg] — the founder and the CEO of KICKICO, advisor of Genexi. He confirmed on Telegram that he is an advisor at SV, but Anti has refused to disclose what is he doing there and what amount of time does he dedicate to the project.
- Kim Khyngi is the founder and the president of ABLE academy. We haven't found any Kim's contacts on the Internet, but what we did find is a number of news articles [1|2|3] about Kim's conviction of issuing false certificates to students. The founder of SV claimed that they have an official contract with Kim. But he refused to show the contract on the grounds of confidentiality.
Are you aware of your advisor Kim Khyngi’s criminal reputation?
- Alex Fork [in|tg] — the founder of mobile blockchain bank for the poor — Humaniq, and the Future Fintech financial technological startups accelerator. Co-founder of IcoLab accelerator. He only confirmed on Telegram the fact that he is really an advisor at SV.
- Grigory Avetov [in|fb] — the organizer of the Sinergia global forums in Moscow and New York. We've contacted him on Facebook, waiting for the answer.
- Juvan Lee [in|tg] — the Founder and the CEO of NexChange. We've contacted him on Telegram and LinkedIn. Last time, when we asked him about DreamTeam, he did not answer. But still, we are waiting for the answer.
- Rob Rappaport [in|fb] — the business strategy expert. We've contacted him on Facebook and LinkedIn, waiting for the answer.
By the way, SV has no technical advisors. Also none of the advisors have specified information about advising Smart Valley on their profiles.
Are these all of your advisers? Maybe you haven't mentioned someone?
Are you going to recruit any technical advisors?
Why none of the advisors wrote anything about Smart Valley anywhere? Do terms of the contract forbid advisor to tell about their activity in the project? If yes, why?
Please, ask the rest of advisors to respond to us.
At the time of writing this review, the Smart Valley team consisted of sixteen people. For starts let's have a look at experience of the most important person on the team: the co-founder and the CEO — Alexey Voronin [in|fb].
- His LinkedIn profile looks kind of abandoned, but Alexey is a quite famous businessman on the Internet. He's also a popular business coach and till 2017 he was the deputy CEO of "Business Youth". It's worth mentioning the skeleton we found in the Alexey's closet: the deleted post on the Pikabu.ru with investigation and appeal against Alexey Voronin for not paying for the work done by the construction contractors.
Have Alexey Voronin seen this post? Is it true? If it was deleted, does it mean the author got paid eventually?
- Let us go through the Russian companies founded by Alexey: in 2002 he has founded an agricultural firm together with the family; in 2007 — the Moscow parking company which in 2011 was liquidated by the tax authority for non-filing of the accounts; in 2013 he's co-founded the Chelyabinsk company Megatek specialized in computer equipment repair; in 2016 he's co-founded three more small companies [1|2|3] which, apparently, don't operate any longer.
Is that true that Alexey has no operating companies from the real sector at the moment?
- Alexey's experience in the world of ICO starts from foundation of IcoLab crypto fund in May, 2017. This foundation attracts large investors for bringing startups to ICO and investing into cryptocurrency. Judging by the roadmap of IcoLab, the website wasn't updated since the middle of 2017. And judging by the disclaimer of IcoLab, the company doesn't undertake any responsibility, and the investor takes on all the risks of investment in the foundation.
Is that true that ICO Smart Valley is financed involving funds from the IcoLab investors?
- In November, 2017 Alexey has founded Zeus hybrid exchange which will allow to buy shares of international companies for cryptocurrency. In the summer of 2018 the project will get to the Pre-IPO, and in 2019 the exchange will be launched. It's going to be an aggregator of cryptocurrency and stock exchanges, but as we all know, the idea of an exchange aggregator has been proven to be a complete failure and legally risky because of impossibility liquidity maintenance at all exchanges at the same time, and limits of fiat currency exchange involving a risk not to close a position for a large investor.
How will Zeus solve obvious problems of the hybrid exchanges?
Is that all the experience Alexey Voronin has?
- Alexander Ruchyev [rc] is a co-founder. We haven't found any of his contacts, but media sure talks a lot about him. Former president of "Morton" developer group. The president of "Osnova" group specialized in three main fields: smart home building in Russia, the Czech Republic, Germany and Austria; commercial real estate management; and also investment into development of hi-tech projects including ICO's. Alexander is the co-founder and an advisor of yet to be started ICO Atum that will act like a platform for carrying out operations between blockchains. Also Alexander is the author of the idea for the Konyukhov's round-the-world flight on a hot-air balloon.
- Sergey Ruchyev [ln|fb|vk] is a co-founder. The director of IT and innovations in the Moscow science and technology park "Fiztekhpark". The vice-president of digital integration in "The Russian association of cryptocurrencies and blockchain". The founder of the "Clever Country" news platform. The executive director of "Rating Agency of Assessment of Digital Economy Projects" non-profit organization. For one year he has been the project manager in the "Transaylnkom" data-center. He worked as the chief of web technical laboratory and the project manager in the "Zhilstroyenergo-M" developer company.
- Alexey Zhurik [in|fb|tg] is the COO and a managing partner. On the website of SV it's mentioned that Alexey Zhurik has more than 20 years of experience in the development of international companies, but on LinkedIn he has only mentioned the experience starting from 2014: he's founded the platform for tourists and hotels — Hotel Face. The website page code and appearance are horrible, a few links aren't clickable, the idea of the platform is unclear, and the traffic is really close to zero. The idea of the platform is based on mobile applications, but their Android application is removed, and the link to iOS version leads to application developed by the AllinQuest company founded by Alexey Zhurik in 2016. AllinQuest is a referral app for attracting customers with discounts. And finally, in 2017 Alexey has held the CEO's position in the 20xManagement company that is specialized in investments and car services development.
Does Alexey still work in all those three companies he worked for 4 years? Where did Alexey Zhurik work for the rest 16 years?
Now, these were the Smart Valley executives. Further we will have a look at the experience of the project developers.
- Valentin Livkin [in|fb|tg] is the CTO and the blockchain architect. Anime fan. He's not active on Github and doesn't have his own fully fledged projects. Just a small headers parser written on Rust. He didn't upload projects on BitBucket neither. It's impossible to evaluate Valentin as the programmer based on the quality of his code from open source. Nevertheless, Valentin's experience is described in detail on his LinkedIn profile starting from 2006. If we are to trust the information he specified, he's worked for five years as the ordinary programmer in three small companies which websites don't even work. Nearly six years he's been holding a position of the team leader in three companies a little bit larger, but we haven't found any confirmation of that. Before he started his work at Smart Valley, Valentin worked as the technical director in the musical marketing company which website doesn't work anymore, and in Voronin's crypto fund — IcoLab.
Does Valentin have any successful projects? Can we see them?
In what company did Valentin get experience as the blockchain architect? Can we see his code and projects where he's worked with blockchain technology?
- Konstantin Zhukov [in|fb|tg] is a senior developer. He's not active on Github and BitBucket or has hidden his activity since he's the one who deployed the Smart contract for SV and frequently contributes to the MVP. His work experience on LinkedIn is described more or less in detail starting from 2011. But we haven't found on the Internet any mentions of Konstantin within the companies specified on his LinkedIn profile.
In what projects did Konstantin Zhukov work with the high loaded .NET applications as specified on the Smart Valley website?
- Maxim Zakharov [in|fb|tw] is a blockchain developer. Pretty active on Github, has his own small projects. Codes on C# and JS mostly. Develops MVP for SV. As Maxim Zakharov specified on his LinkedIn profile, besides work in SV now he works as a .NET-developer in the Stack Group company that provides various cloud services, but we haven't found any confirmation to this.
What blockchain projects has Maxim dealt with before Smart Valley?
- Nikolay Vlasov [fb|vk|tg] is a devops-engineer. We haven't found Nikolay's LinkedIn. There is nothing on his Github except the SV test repository. We also haven't found Nikolay's mention on the Internet as a Devops specialist.
Where, when and how long did Nikolay work before Smart Valley? Can we the see proof of his competence?
In the official Smart Valley Telegram chat investors already asked a question about proofs of the programmers' competences. And here is the answer they got from the former CEO of SV on Telegram:
1. Only Valentin Livkin is googlable (https://www.linkedin.com/in/settlersan/). He is mentioned as a blockchain architect on the website but he has no mention of any blockchain projects on his linkedin, and his experience (if trustworthy) barely account for a usual DevOps! There is no info on other team members. We need proofs of competences.
Answer: the thing is that all of our developers are "introverts". Therefore, they are not public and somebody can assume that it's bad. But we are certain in their experience at least for the fact that we have no need to seek services of non-experts because all of our employees are full-time. This is one of the points. Furthermore, it needs to be noted that one of our co-founders is Alexander Ruchyev. He is the founder of Fiztechpark and a member of the council of the Plekhanov Russian University of Economics, the Moscow Institute of Physics and Technology and actively participates in the life and development of the Bauman Moscow State Technical University. Therefore we have no issues with employees. Also worth mentioning that we have hand-picked our employees using the services of HR-digital agency (not bad as for a Russian HR agency). For instance, one of our specialists — Vladimir Manzuk is the winner of three hackathons as a system analyst, and this is just for the last 5 months. Regarding our CTO, blockchain architect — Valentin Livkin, he has been in the software development for more than 12 years and has around 7 years of the development lead experience. So there is no doubt in his experience and it's not clear why did you assume that he barely accounts for a usual DevOps. Valentin has come to us from the biggest holding company. And we are certain about our team. You can come to us and meet them — it will be our pleasure.
— Vladimir Zhiganov
- Maxim Guryev [in|fb] is a tester. As Maxim has mentioned on his LinkedIn profile, before working at SV he was a tester in two companies: two years in Braintree company dealing with development of online payment in partnership with PayPal, and four years in Zed Plus dealing with mobile applications development.
- Vadim Chupin [in|fb|tg] is a blockchain engineer, a technical manager. Not active on Github, has no projects with blockchain. Judging by his LinkedIn profile, Vadim worked as an analytics, development and planning manager in food trade companies. Nothing technical, except for work at IcoLab crypto fund as a technical manager.
In what projects did Vadim work as a blockchain engineer?
- Vladimir Manzyuk [in|fb|tg] is a blockchain analyst. Before SV and IcoLab he's worked for about 6 years as an analyst and consultant in companies not related to blockchain. In 2017 Vladimir has won in three blockchain competitions: the third place in BlockchainHack where together with the team he's developed the arbitration system, then the second place in LAToken, and he was one of the EthWaterloo winners where he participated in development of p2p platform for the smart contract review.
In what companies did Vladimir work as a blockchain analyst? Can we see his work?
- Andrey Denisyuk [in|fb|tg] is a project manager. He answers the questions in the official SV Telegram chat. On his LinkedIn profile he specified work experience only at IcoLab and Smart Valley. We haven't found any mentions of Andrey's previous work on the Internet.
You specified on the website that Andrey has experience in launching financial startups. What financial startups did he launch?
- Vladimir Marinovich [fb] is a business expert. We have asked him in Facebook if he even works with Smart Valley since he didn't mention them anywhere. He has answered that he isn't a project employee nor partner, but an expert. Yes, that's a weird answer. He is a consultant, a business school administrator, a council member of two small Russian companies.
What tasks are performed by Vladimir Marinovich in Smart Valley?
Next thing, to get a complete picture, we will add the guys who've already left the project.
- Vladimir Zhiganov [ln|fb|tg] is the former CEO of Smart Valley. He has left the project in the middle of February, 2018.
Could you tell us the reason why Vladimir left the project?
- Ivan Karadzhov [in|fb] was a marketing strategy consultant. Ivan has answered to us on Telegram and said that he doesn't work for Smart Valley anymore.
If Ivan doesn't work at SV, then why is his name still on the Team section of the website?
- Rustem Zubairov [in] was a business consultant. On Facebook Rustem told us that he has never worked for Smart Valley and he only helped Alexey Voronin with projects as a friend.
Why did you put Rustem’s name on the SV website?
- Evgeny Fedorov — "Blockchain and fullstack developer with a lot of backend experience" — we couldn't find his tons of experience by googling. He hasn't been mentioned anywhere, except on the Smart Valley website. The SV team has moved him away from the website while we were writing this review.
Has Evgeny Fedorov left the SV project?
How the SV team is going to develop all parts of the product without having sufficient experience and programmers? If there is experience, please provide confirmations in the form of the list of the complete successful projects.
Don't you have marketing and finance specialists, PR managers? If you do, please reveal their names and give the lists of their complete successful projects to the public.
Good thing is that the Smart Valley support gives prompt and, last but not least, adequate answers to the investors' questions in Telegram chat .
The project team claims that Smart Valley is registered in Switzerland under the name "Blockchain solutions AG" with registered address at Gotthardstrasse 26 6300 Zug. We probably have no chance to check this information, but it kind of seems true: the Blockchain solutions AG company is in the Swiss registry, and office building is located at the address specified. The company is registered by two directors: by a Swiss lawyer Dragan Zeljic taking the role of the director under the law of Switzerland; and by someone named Vladimir Perminov, probably a lawyer from Arkhangelsk.
How can we make sure that the name Smart Valley is registered under the legal name Blockchain solutions AG?
Who is Vladimir Perminov and why the company isn't registered by the founders of the project?
It is considered that the SVT token has no signs of a security status and only provides access to the Free Token Place service. In marketing materials the team doesn't promise income due to growth of the token price, doesn't forbid residents of any countries to invest and doesn't comment on token exchange listings. In this regard they did really well.
In SV Telegram chat documents were published on the legal opinion about the type of the SVT token [Detailed conclusion|Explanation to the conclusion] issued by the Crypto Lawyers Corporation law firm. The conclusion looks convincing. It says that SVTs won't be listed at cryptocurrency exchanges, but we didn't see no direct statement about that in Smart Valley's WP.
Is it true that SVT token won't be listed at cryptocurrency exchanges?
Have you got financial license for exchanging tokens in the internal market?
Have you prepared the tools (for example, an escrow-agreement) which would guarantee the return of investments in case of inappropriate use of the raised funds by the team?
ICO's usually mess up the projects by promising whole lot of services, and Smart Valley, unfortunately, is not an exception. It's really hard to understand the indistinct concept of the project because of diverse services and misunderstanding by investors and probably by the team itself: how everything is going to work after all. With fund raising the team was obviously a little hasty, without having thought over the work of the platform and its economy in details.
We've noticed this feature of the project, something we've been looking for a long time ago — database of the ICO projects where everything is going to be specified: whether ICO has a legal basis or not, is the token of Security or Utility type, is there a legal paper from the regulator or not. This, something that the SV team didn't place emphasis on, will actually help our search of legal ICOs. But SV is still not the product we're ready to pay for.
The good part is that Smart Valley itself has got to observe the majority of recommendations made by SV experts in their first scorings. In particular, about improvement of marketing, team and LinkedIn profiles. Or, take this, for example:
...not to try to make a platform uniting the services provided by competitors, each of which takes serious positions in the niche, but to concentrate efforts of developers on one internal product/service giving the maximum advantage over competitors, perhaps a product which implies blockchain integration.
— scoring of Ukit, social and economic influence, expert 1.
Great advice, followed by very few people. But, we will hope that the Smart Valley team will answer all questions from this review. We wish you all the best!
And here goes the editorial note from Nikita Kolmogorov:
Indeed, creation of scoring service by SV could simplify our work significantly — bad thing they won't make it to launch because they don't have any good programmers.
As for this project I would call: the change of the project CEO without explanation, the lack of legal bond between the company and founders, refusal of advisers to tell about their involvement with SV, refusal of some so-called workers to cooperate directly with SV — the most common red flags. I'm starting to get this feeling that the demonstrated MVP has been made just so that it is out there to fool investors, the advisors are just selling their names (at least not for SV tokens, I hope), and they've hardly scraped together some programmers on the website so that they don't look like a total shame. Anyway, we can see simple marketing nonsense without any technical background. With such technical team all they're going to achieve is fiasco, and the tokens are going to crash in the long term.
As frustrating as it might be for me, it's kind of worth mentioning Anti Danilevsky's reaction. I thought that KickICO are serious guys, but their cooperation with the IT company which has no programmers with sufficient experience forces to call into question both KickICO's, and Anti's professionalism in particular. Also, Anti threatened to call the lawyers on us for slander — my lawyers are always ready to take any action as well, they read reviews carefully, and make sure I always write: "All of the above mentioned is my personal opinion". And we don't deal with slander at all, only with real facts from public space.
Anyway, personally I recommend to not work with SV if you look for the long-term investments — but from the speculative point of view, something may work out. They have good marketing — but they've got no product. A classic financial pyramid as it is.