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CDRX: A Comprehensive, Independent ICO Review

ICO Details

In-depth review

Synergy.: two entities coming together to produce something bigger than themselves. The crypto market is still young, daring and blazing a new frontier. A compelling mixture of decentralisation, anonymity, and immutability; the crypto space challenges the status quo. The market swings and potential - and actual - massive gains entice traders and investors alike. The technology is leading a paradigm shift and disrupting entire industries.

Traditional stock markets on the other hand are well-established, regulated bodies. What they lack in sex appeal they make up for in solidity, reliability and longevity. One would think blockchain technology would serve as a boon to traditional markets. For instance, in many ways, the public ledger is an upgrade to the current share register.

Why, then, are traditional markets not quickly moving to adopt blockchain solutions? Think of the traditional markets like a large ship. This large body, while durable and able to withstand storms, is incredibly difficult to turn. To adopt new policies and implement new technology takes years.

Crypto, on the other hand, is highly adaptive, reflexive, and at the forefront of technological advancement. We, as users, recognise 2018 is way different to the 1950s. We demand real-time solutions for age-old problems. The faster-than-light pace at which crypto moves is what entices so many of us.

If you remove the structure of each system, the two markets work to achieve the same function: the exchange of assets between one entity and another. The problem though, is that traditional market trading is slow, expensive, and, crucially, requires a middle man. Crypto trades on the other hand are near-instantaneous, have minimal fees and can be executed by anyone, anywhere in the world, and at any time of day.

How then, can we bridge the gap? How can we bring the technology of crypto to traditional markets without having to wait years, possibly decades, for governments to adopt? What if we were able to harness the power of the blockchain to deliver quick, inexpensive, and trustless trading to traditional markets? We present to you the Crypto Depository Receipts Exchange ('CRDX').

Product

CDRX is a platform built to handle trading both crypto and traditional assets. Currently in alpha testing, the product is set to launch early 2019. Functioning much like the ever-popular BNB token for Binance, the house utility token for CDRX will be used for exchange fees. We will dive more deeply into the full use of the token later.

The exchange of traditional assets will be handled by what are dubbed CDRs, or crypto depository receipt. These CDRs, functioning much like the already existent ADRs of traditional markets represent a holding equivalent to a traditional share. For instance, using the CDRX platform, users are able to purchase a CDR for Alphabet (Google) that is representative 1:1 the actual value of an Alphabet stock. Now, users are able to buy and trade traditional stocks and bonds with their crypto holdings.

The setup of the product delivers the best of both worlds. Users are able to trade traditional assets in real-time with minimal fees. They are also able to take advantage of dividends and voting. All of this is handled through the embedded smart contracts of the CDR.

The platform will also offer owners of traditional stocks to convert their assets into an equivalent, securitized CDR, or Crypto Depository Receipt. As traditional market traders have access to both markets in the same exchange, it is no doubt their interests will diversify, bringing more interest, capital, and normalisation to the crypto space.

One thing we especially like about the platform is the intended audience. CDRX is aiming to attract institutional money with features such as enhanced security, a high-speed matching engine, institutional grade uptime and API, global liquidity sourcing, and various order type support (market, limit, stop, day, GTC, etc.).

Vision

Bridging the gap between crypto and traditional, CDRX aims to offer a best of both worlds. Crypto traders will have access to traditional markets with the same technology they already know and love. Traditional market traders will have access to trading with the benefits of reduced transaction costs, crypto-speed settlements, and share-splitting. Traders will also be able to explore and diversify their portfolios across both markets.

Reduced transaction cost

One of the major issues plaguing traditional markets is the cost per transaction. The man in the middle needs to eat. Who is it you think is paying for his meal? This has always been the way of doing business. The client goes to the broker. The broker has access to the market. The client pays the broker for his time, service, and access.

The use of blockchain technology eliminates the need of the middle man. Smart contracts allow users to interact directly with the market without a third party. The public ledger of blockchain technology functions much the same as the share register with traditional markets.

Suddenly, the need for large brokerages is gone. No longer is the small-time investor paying someone's salary. No longer are the administrative fees and overheads resting on the shoulders of investors.

Crypto-Speed Settlements

Today we expect everything to be instant - and why shouldn't we? We have the technology. The world is becoming increasingly accessible. It is possible to physically travel to nearly any two destinations in the world in under twenty four hours. Why then, with traditional markets, does it take two days to settle transactions? In this breakneck world we live in it is no longer acceptable to wait two full days for anything. The CDRX platform processes transactions at the speed of Ethereum which moves things in minutes, if not seconds.

Share-splitting

The problem for many small investors is ease of entry and the indivisible nature of traditional stocks. A company like Google is a great investment opportunity, but unless you have at least $1000, you are unable to invest. Additionally, your investment amount is limited to the number of shares you wish to purchase multiplied by the price. If you have $2500 you wish to invest in Google, you will either need to only buy two shares or come up with additional capital for a third. As you can see, this is incredibly limiting.

What CDRX allows for is purchasing of stock in a completely divisible manner. The functionality is exactly the same as trading crypto. You are able to purchase decimal values of any stock or token.

The wonderful thing is none of this is a new concept. The traditional markets already have in place a similar system known as ADRs, or American Depository Receipts. The new element is the employment of smart contracts to handle the split shares. Again, we see more similarities between the two worlds.

Running to, not from, regulation

The only way a project such as CDRX can flourish is through regulatory compliance. Regulators are slowly warming up to the crypto space. Their scepticism should come as no surprise given the Wild West frontier the space embodies. The distributed ledger aspect of blockchain technology has parallels with the share register system currently in place with traditional markets. However, the publicly verifiable record of the transactions meets and exceeds the current practice.

CDRX is working to show regulators the benefits of blockchain and how it can make market transactions more secure, trustless, and immutable. As blockchain technology becomes more understood, it becomes clear the transition to the distributed ledger is an evolutionary rather than revolutionary step.

 

In the meantime…

While the company is acquiring the necessary licensing and working with regulatory bodies, they will have launched their non-securities exchange, an already proven model. This approach provides immediate value to the token and allows users to acclimatise themselves to the particulars of the exchange as new features and trading pairs are added.

This plan of action also eliminates the murky post-ICO "developmental" phase. A place where investors see little tangible progress and are left hanging on the words of Tweets, Medium posts, and Telegram announcements. There will be a verifiable product available early 2019.

Speaking of social media, how does the project rank up?

 

Hype & Communication

How much buzz does this project have? Is the team communicating with its followers? Is there enough interest to turn this dream into reality? CDRX has opened itself to an impressive array of social media platforms, but has yet to attract a wide following. The most active channel is their Telegram group that hosts a reasonably small but active 2500 members, the least impressive is Twitter with just 1211 followers and very little engagement. The Telegram is kept clean and relevant. All too often with ICOs you see a host of spam and phishing attempts. I have personally reached out to the group with detailed questions regarding how the exchange will function and received intelligent, quick, and thorough responses within minutes each time.

On Medium, you will find engaging, enticing and thought-provoking articles. Each has significant traction. There are interviews with the CTO as well as videos showing the working alpha platform on YouTube. The subreddit is also active. You can also find the project engaging on Facebook and Instagram.

Team

This, to us, is the single most important piece of the puzzle. The team is the glue that holds it all together. So many ICOs are led by college-grads and people with very little or incredibly tangential experience. What a breath of fresh air CDRX is. CDRX has a stacked team full of credentials. It is so comforting seeing team members talk of their experience in decades, rather than months. Further, all of their experience is relevant, transparent, and verified on LinkedIn.

David Ward - CEO

This man alone has enough experience to run the show. He has over two decades of industry experience and the perfect cross-section of quantitative programmer and derivatives trader (equities and credit) at investment banks including Goldman Sachs, Merrill Lynch and JP Morgan. His experience also includes the development of high-frequency trading systems, machine learning and delivery of a global bond issuance and trading platform, integrated with the London Stock Exchange. He is well connected on LinkedIn (a huge contributing factor to overall score, IMO) and overall carries a sense of the utmost professionalism. Beyond his history with traditional markets, his relationship with crypto dates back to 2013.

Matthew Spittle - CTO

Another rock star, Matthew has over two decades experience working with the likes of American Express Bank, JP Morgan and Standard Chartered in London and Asia. This, to us, will serve as tremendous help in developing a high-frequency trading platform. His work dealing with market data, pricing, execution, risk management and automated hedging is all incredibly relevant. What does a new exchange need? Someone who has played the field and has extensive knowledge both in how markets and exchanges operate. One call for concern is in his experience it is listed he "concurrently" handles all of these operations. We wonder if the huge demand required of an ICO would be too much to handle?

Mohammed Hakeem - Head of eCommerce.

Mohammed has over twenty years experience working with banks with responsibilities including infrastructure and architecture design, development and support of high speed trading and market data systems, including multi-billion dollar, real-time forex trading platforms.

Are you noticing a recurring theme yet? All of these guys have experience measurable in decades, and all in relevant fields; most notably banking, trading, and high-frequency systems. This, plus their connected network on LinkedIn, shows me they have all the tools and skills they need to launch a successful product.

Thanh Nguyen - Head of Software Engineering

Past experience includes former head of software engineering for a fintech company as well as crypto-developer. Again, we see experience working with high-frequency systems as he spent six years working on a messaging platform with over 40 million users with a peak messaging rate exceeding 1 billion messages per day. This experience with high-frequency systems translates, to us, these guys know what a difference two hundred users and two million users makes and that they know how to handle the pressure.

Zung Le - Head of Market Microstructure

Zung has over ten years' relevant experience working with networks and ultra-high frequency messaging. As a former network and firmware developer for Broadcom and Ericsson, he was responsible for the development of the ultra-high frequency messaging protocols for ARM chips and data networks. He also has experience in financial markets, specialising in high-frequency trading, tick data, optimised order management and machine learning at quantitative trading firms and brokers. Again, we see experience spanning many sectors of the stock market. This time, Zung brings to the table a wealth of experience regarding the back-end data analysis of trading.

Thomas Sandberg – Head of Sales and Structuring

More than 15 years' financial markets experience designing, structuring and distributing derivatives and cash solutions at international investment banks including JP Morgan, Citigroup and Bank of America Merrill Lynch. Experience spans all major asset classes and product types.

I'd like to take a quick moment and talk about language i.e. how does the team carry itself and how do they communicate? One thing I like most about the CDRX project is the level of professionalism expressed on all fronts. In reading the white paper, watching their videos, and speaking with them directly, it is quite clear CDRX is being run by successful business people. They are targeting institutional-grade investors and traders and this mission is made quite clear across all channels.

Token Metrics

What drives the value of a token? Unless you are purely speculating and trading on hype, this question should be at the forefront of any investor's research. CDRX adopts the already proven model of 'exchange token'. Similar to Binance and Huobi, the CDRX token will be used to drive transactions on the native platform. The tokens will also be used for conformance and embedded smart contracts in the CDRs/cryptoshares.

By investing in CDRX, you are investing in the success and adoption of the exchange. CDRX has the heavy-hitters in mind. The platform is built for institutional usage and their token incentives are reflective of this as well.

As you can see by the alpha preview, the platform runs smoothly, beautifully, and carries with it an institutional feel.

The company aims to keep employee and token holder incentives tightly aligned, with plans for token buy-backs in the open market. To further drive the value of the token and incentivise supply reduction, the team offers a tiered incentive for token holders.

With a clearly defined use and plans to drive the token's value in place, let's break down the token allocation. There are to be 400,000,000 CDRX tokens minted. These will never be destroyed or burned. As stated above, the team does intend to buy back tokens on the open market.

50% of the tokens will be allocated during the pre-ICO and ICO. 40% of tokens are to be allocated to the team and second round investors. To incentivise the team to keep the value of the token prioritised, they will be paid in tokens spread across a ten year period. The remaining 10% of the tokens will be allocated to first round investors and ICO costs.

This spread is respectable and the allocation of the tokens makes sense. Paying the team in tokens, keeps their values in line with the success of the project. Given the verbiage and intent of the token, the team is working to incentivise Big Money to use their platform.

The first and second round investors have already locked in and include:

Proprietary Trading House - a trading house spanning all major financial markets, including a dedicated crypto trading desk.

Asian Family House - establish fintech investor since 2010 with entry into crypto in 2014. Crypto interest includes two exchanges and four crypto startups.

Private Investors - private contributors who support the project.

The differentiation between second round investors and founders' shares is unclear, and it should be noted the combined percentage of proprietary investors could potentially be upwards of 50%. To help abate this high percentage and fear of a dump, the project's plan is to release these tokens over the span of a decade.

Investment Opportunity

Do you believe in intuition? When you see something, an opportunity, do you get that feeling in your gut? Like everything just makes sense. The frequency and vibration just sits right with you. This sense of "right" has been with us since the moment we opened the CDRX whitepaper. The deeper we dove, the more in love we fell with this project. Intuition aside, this project screams success from many angles.

First, the exchange token model has already been proven to be successful. By offering access to traditional markets, CDRX brings a whole new level of depth and value to the concept. The team has made the intelligent decision to launch a non-securities (i.e. crypto to crypto) exchange almost immediately after the conclusion of the ICO. This will give the token traction and immediate usage. Many projects get stuck in the regulatory grey area, unable to progress without legal clearance.

Next, the project's team has relevant, extensive experience and deep connections in the industry. Each member has decades of experience with the industry's largest firms. With each word of the website, white paper, and social outreach, it is evident these guys know what they are talking about.

Thirdly, the team is targeting heavy investors by providing an institutional grade exchange. Big money brings high liquidity, an integral component to a successful exchange. They also offer the service of converting pre-existing traditional stocks into CDRs. This move will bring a large market of traders on board who already hold stocks and bonds.

Finally, CDRX isn't doing anything revolutionary. Rather, they are delivering an evolutionary product. Oftentimes, especially with crypto, we see projects trying to change the world. CDRX strives to take the power of blockchain and the public ledger to evolve the systems already in place. The public ledger is the share register, only 2.0. Smart contracts are trustless, quickly executing, negligible fee-charging brokers. CDRs function the same way as ADRs, only more quickly and efficiently.

Whilst Bitcoin certainly began as a revolution, we are now in the evolutionary stage and, in that respect alone, CDRX fits in quite nicely. Otherwise it looks to be a stand-out project. Let's see what they bring in the months and years to come.

 

Product9
Vision10
Hype5
Team9
Token Metrics8
Investment Opportunity9
CDRX is a project that has serious potential. The project makes sense, its use of blockchain is tightly in line with the pre-existing practices of traditional markets, and the team has a vision to roll out their product in phases. The initial phase is not dependent on any new regulation and will be available Q1 of 2019. The team is stacked with business insiders who have a broad and deep knowledge of what needs to be done to get the job done. The hype of the project is slightly under par what we're used to seeing, and hopefully as we approach ICO we'll see that increase.
8.3

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