Token Sale

Matchpool Token Sale (ICO): Curated dating communities with the security of a blockchain

Disclaimer: Matchpool solicited a formal review of their token sale. We were compensated for that private review. We have summarized findings from the audit at the bottom of this report. We do not offer profiles or reports as a paid service, and we disclose all financial relationships we have with projects. 

Update: Matchpool reached its funding target of 125,000 ETH (approximately $6 million) in less than two days. On April 5th, there was also a high-profile departure of Philip Saunders, one of its co-founders: in a slack announcement, he accused Matchpool of removing funds from the multisig address. Matchpool did announce their intention to do this on April 3rd, although by team’s own admission and apology, the funds were sent to a Trezor wallet rather than the announced BitcoinSuisse or Smart Contract Japan. Phillip issued another statement on April 5th, criticising the team’s lack of development expertise and calling on the team to issue a refund or change the core team. The team also issued a statement on bitcointalk briefly explaining the fallout with Philip: after realizing that “his position is deteriorating” and that “others may be recruited,” he asked for “his promised yearly salary today” and when the team refused, “decided to take us all down with him by accusing us of stealing.”

We encourage Matchpool to issue a public statement, not on a forum, informing people of this development. Matchpool has issued a formal statement and explanation.

Project Description

What is the project?

Matchpool is a platform intended to facilitate matchmaking economies in dating communities.

The platform is built around exclusive dating communities called pools. Individuals will be able to create their own matchmaking pools via the Matchpool mobile app, curated along lines of demographics, geography, and interests. Like Tinder, Facebook profiles will be used to verify user identities. Users who fit a pool’s curation parameters are able to join as subscribers using GUP, the native token of Matchpool. The team has described a pool as “a slack group with payment rules.” Users can join multiple pools.

Those who open pools are called ‘hosts’ and they can designate other moderators called ‘helpers’. Hosts and helpers are incentivized to propose matches between members of the dating pool through a rewards system. When successful matches are made, the person who proposed the match earns a portion of fees from the pool.

There are also incentives for developers to create integrations called “dapplets,” e.g. a Tinder swiping feature, for hosts who pay usage fees. These integrations will be available via a decentralized app-registry with a built-in review system. Like demographic, interest and size parameters, the pool fees and rewards systems are customizable.

In the first incarnation, Matchpool will use a collection of Ethereum smart contracts to manage collection and distribution of funds. However, a significant portion of the user-facing mobile application, including functionality such as messaging, data storage and user profile and pool creation, will be hosted on centralized servers.         

Although the first implementation will be dating, the team is interested in exploring social networking solutions for other industries including education, health, and recruitment.

What is the token being sold?

The platform’s native guppy token (GUP) is the exclusive means of paying subscription fees for the various dating pools. GUP is an Ethereum meta-token.

The platform’s native guppy token (GUP) will have supply of 100 million, with 60% released in the crowdsale and 20% issued for the team & advisors. Team & advisor tokens will be non-transferable for 1 year after crowdsale. There will also be irregular emissions totalling 18% of supply for new users over the first two years. Here it is worth noting that controls will be in place to ensure only high-quality users receive newcomer credits. Potential requirements are a female profile with at least 300 Facebook friends. Finally, the remaining 2% will be issued and distributed as bounties immediately following the crowdsale. Details regarding the sale’s bonus structure can be found below.

What is the project status?

The team is in the process of setting up a GmbH in Switzerland to provide formal governance and ensure structural continuity within regulatory boundaries.

In regard to technology, the project is also still in the proof-of-concept phase. They have the code of the crowdsale smart contract available on Github and a draft of the smart contract governing the use of GUP tokens in pools. They also have a demo video that shows off the intended design of the platform.

At time of writing, specifics of the project roadmap, milestones and associated fund-disbursement  conditions have not been released, however, Matchpool has confirmed that a ⅔ MultiSig format will be implemented with Bitcoin Suisse AG.

Who is the competition?

In assessing the competition, we take only the dating implementation into account.

Accordingly, we see the most direct competitors being high-touch dating applications such as The League and OKcupid which use a combination of algorithms and centralized expert knowledge to facilitate matching. The question here is whether pool owners are more skilled and/or perceived as more legitimate authority figures than the available centralized services.

Indirect competition will come in the form of lower-touch dating applications such as Tinder and Bumble where users facilitate matches themselves. These present less of a threat as they attract users who are confident in their ability to choose and connect with appropriate partners, and have the time to do so.        

Who is the team?

The team lists twelve non-advisor members and provides their full names, though they don’t provide links to third-party information.

  • CEO Yonatan Ben Shimon has several years of experience in hedge fund management outside of the cryptocurrency industry and several years as CEO of Decentralized Partners, a blockchain hedge fund based in Israel. The assets under management of Decentralized Partners is unclear.
  • The development team include Phillip Saunders and Or Demri. Phillip is the CEO of Nebulis, a global distributed registry using the Ethereum blockchain. Phillip also founded Pax, a civic network and p2p legal system. His Github handle is Physes, and it includes multiple blockchain projects and 205 commits in the past year.
  • Co-founder Max Richardson is the founder of Bloc Digital, a small creative agency.
  • Most other members of the team are focused on community managers, UX, marketing, and operations. They are working with attorney and Smith+Crown guest author Lior Zysman as a legal advisor.

Advisors include Dr. Gavin Wood, Jake Brukhman of CoinFund, Joe Shapira of JDate, and Ned Scott of Steem.

S+C Commentary

Below is an excerpt of findings from our audit with Matchpool.

Pros

  • Matchpool has assembled a competent non-anonymous team with experience across business, marketing, technical and legal fields. The involvement of Dr. Gavin Wood and Joe Shapira suggests the initial implementation will also be appropriately supervised in regards to smart contract development and entry into the dating industry.
  • The team has been transparent in terms of the work done so far, with smart contract source code being available for review on Github. It has also been receptive to criticism, as illustrated by their ongoing revision of the whitepaper, originally released in January.
  • Due to the threat of a crowded market for dating services, the project has a ready list of alternative use cases to pursue. One example is recruiting: matchpool could try to become a distributed platform for professional headhunting and talent acquisition. There are likely other markets that could benefit from “matchmakers,” and it isn’t uncommon for teams at this stage to expand or pivot.

Cons

  • The fee economics may be insufficient to incentivize matchmaking behaviour. If a pool has 100 members, each paying $10 monthly subscriptions, monthly pool revenue is $1000. Assuming 10 successful matches and a 50/50 mutually exclusive split between owner and matchmakers, that’s $500 for pool moderation and at most $50 per successful introduction. Both of these appear to be time-intensive activities warranting better compensation. The obstacle will be how to consolidate this with limitations on group size while keeping subscriptions affordable.        
  • We believe that the estimated user acquisition price of $5 per user is too low. Liftoff, a mobile app marketing and retargeting platform, estimated that the cost to acquire a paid subscriber on a dating app was $304.78, with a install-to-subscribe ratio of 1.1%. Matchpool wants the pool operators to recruit user to their pools, lowering Matchpool’s centralized marketing costs, but the fee economics will probably need to be higher to encourage pool operators to undertake marketing.
  • There is tough competition to provide value in the industry. For example, Tinder premium costs $10/month, providing access to millions of potential matches. Meanwhile, a Matchpool user would likely have to subscribe to multiple pools for the same opportunities. The argument is that the quality of potential matches is higher, but this is not necessarily proven and may not justify significantly higher costs. There are premium matchmaking services that charge thousands per year, but they are in a different category of service than the dating apps to which Matchpool is commonly compared.

Token Details

Role of token: April 2nd, 2017 to April 30th, 2017
Token Supply:  Distributed immediately; however, tokens will be frozen until May 21st, 2017
Distributed in ICO:     60 million
Emission rate: 18 million tokens released over first two years
Blockchain: Ethereum

ICO Details

Sale period: April 2nd, 2017 to April 30th, 2017
Token distribution date:   Immediately distributed; however tokens will be frozen until May 21st, 2017.
Minimum goal:None
Maximum cap:$5 Million
How are funds held:2/3 MultiSig escrow Bitcoin Suisse AG, and Matchpool legal advisor Lior Zysman as signatories.
Mainnet release date: Third quarter, 2017
 Bonus schedule:
Period          Bonus
First hour          33.33%
First three days          22.22%
First two weeks          11.11%

Update: A previous version of this article said that MME was slated to serve as an escrow signatory. MME has confirmed they are not an escrow signatory. Lior Zysman, who serves as Matchpool’s legal advisor on their Advisory Board, is serving as a third escrow signatory.

6 Comments

March 18, 2017 at 1:41 pm, J Rensen said:

Do all these figures remain accurate – is $4.2 million US still the ICO max limit?

Reply

March 20, 2017 at 4:07 pm, Matt Chwierut said:

Good catch J Rensen. The max now appears to be $5 million US: “The Matchpool crowdfunding campaign…will last for 4 weeks or until our CAP of Ethereum equivalent to 5million USD will be reached. ETH price will be adjusted to the current market USD price.” We have updated this in our listing.

Reply

March 28, 2017 at 6:02 pm, Lee said:

I cant see link where to invest?

Reply

March 28, 2017 at 7:30 pm, Andreas Weiler said:

> Hi Lee, thanks for your inquiry. If you’re interesting in participating in the token sale, all the relevant information to do so can be found at https://matchpool.co/crowdfund.

Reply

April 06, 2017 at 7:34 pm, diana said:

can I get a refund from Match pool for transfer made from an exchange wallet, since I realised I couldn’t have used an exchange wallet too late?

Reply

April 06, 2017 at 8:38 pm, Andreas Weiler said:

> Hi Diana. If you sent Ether from an exchange, the relevant data would not have been included and the token sale contract would have rejected the transaction. First, use the relevant transaction ID provided in your withdrawals history to check if this was indeed the case via https://www.etherscan.io. Second, contact your exchange asking where the reimbursed Ether is being held. Best of luck!

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