Published 25 Jul by CRYPTODIFFER COMMUNITY

 

Bgogo | Mining by trading

The exchange of the community, by the community, for the community

 

co-authored by James Ruocco


Team | 35 Members

Amber Cheung | CEO

Guardians Asset Management Limited | Executive Director

  • Pre-Ipo Deals & Investments in the secondary market

Bingo Group Holdings Limited | Executive Director

  • IP development

Emperor Capital Group | Business Manager

  • Managed 300 securities trading accounts
  • Marketed foreign exchange, commodities and IPOs

Sino-Phil Petroleum International | Assistant Vice President

  • Traded petroleum related commodities
  • Venture Capital team

NYU Stern School of Business | MBA

HKUST Business School | MBA

Nankai University | BsC in Economics & Finance

Nicolas Chan | CTO

Facebook | Engineer

  • Responsible for the security of 2 billion accounts

AMC-ICPC Champion

  • College programming regional competition

Shanghai Jiaotong University | BS

Maximilian Wang | CMO

Facebook | Software Engineer

PINT Inc. | Software Engineer

  • Lead architect and developer of web MVC grid library components

University of California San Diego | Teaching Assistant

  • Advanced software/data engineering
  • Web languages

University of California San Diego | MsC

Fachhochschule Lübeck | Diploma-Engineer

East China University of Science and Technology | BE

Oscar Song | COO

Huobi | COO

Gukebao | Founding member

 

Renmin University of China | BsC in Finance

Ciara Sun | CSO

Boston Consulting Group | Consultant

Grant Thornton China | Consultant

Deloitte | MBA Summer Associate

Winner of 2018 Without Borders Summit Project

  • 2018 Blockchain Consensys

Indiana University | MBA

 

Indiana University | BsC in Accounting & Finance

The rest of the team has not been disclosed. Together, all 35 , included the ones listed above, have experience in companies such as Facebook, Microsoft, Alibaba, Twitter and BCG.

Bgogo is lead by, Amber Cheung, a veteran asset manager and investment banker with vast experience in security and commodity trading. The CTO, Nicolas Chan, is a security expert that was responsible for safeguarding 2 billion accounts. His jurisdiction extended across Facebook, Whatsapp, and Instagram. The CMO, Maximillian Wang worked as an engineer for Facebook (forming a crypto syndicate there) and acted as an advisor/investor to several blockchain projects including Quarkchain (It is surprising to see a technical CMO, we are curious to see how it pans out). The team member with the most hype is Oscar Song. Oscar is a former chief of Huobi, a top world renown exchange. Lastly, we have Ciara Sun, a previous consultant from BCG and Deloitte intern with a specialty in finance; She has worked with funds that managed billions of dollars.

When analyzing new projects, investors should compare the project against industry leaders. By doing so, investors can compare the strengths of new projects against the weaknesses of existing projects. The goal of a new-comer is to disrupt the market and steal market share. Bgogo will be competing with the likes of Binance & Fcoin. Fcoin was the first exchange to distribute their tokens via trans-mining. Binance because, well, they are the most popular exchange. Fcoin’s Zhang Jian is an all star as described on our Fcoin reviewwhile Binance’s team can be found on their whitepaper. If we compare Bgogo’s c-level members from a purely technical perspective, the Bgogo team pales in comparison. However, do not falter, Bgogo is more than meets the eye (and no it is not a transformer).


Investors

Bgogo is a company with a token attached to it, like Binance. Therefore, they have two investor channels.

Equity Investors

Bgogo received USD 10 million in their Pre-A and Series A rounds from VCs like Node Capital, Sky9 Capital, Goopal Digital, and Hike Capital.

Token Investors

These are the investors that we care about the most since they will determine the token’s market cap. The first supernodes will be comprised of 21 investors; each supernode invested 500 eth which adds up to USD 4,914,000.00 at the time of sale.

As you can see from the image above, some supernodes are from extremely well-known organizations, such as: Pantera Capital, DHVC, 8 Decimal, and Node Capital to name a few.

To understand why exchange tokens mean srs business, we recommend reading this article first: https://medium.com/alpha-club/fcoin-an-exchange-for-the-people-58bd735101c6


Why Bgogo?

Bgogo’s website and whitepaper are a bit misleading. It does not represent the full spectrum of benefits associated with being a BGG HODLER. The secret sauce can be found on their reddit AMA.

Bgogo Exchange

It will be a digital trading platform with a token, BGG. The transaction fee is 0.10%. It will have no FIAT support, similar to Binance and Fcoin.

BGG Token Metrics

Total Supply: 10 billion tokens.

  • 50% will be mineable; unlocked via trans-mining.
  • 20% will be reserved for Bgogo’s daily operations and to support the ecosystem (unlocked at the same rate as the trans-mining tokens).
  • 20% is allocated for the team & is vested over 4 years (25% per year)
  • 10% is reserved for the supernodes (50% unlocked/50% vested for 5 months)

Trans-mining means that all fees incurred on the exchange will be repaid in the form of new exchange tokens (that is until all tokens are created). Bgogo will initially offer a 105% rebate (This rate may change, but they have promised the minimum rate will always be at least 100%). Basically it is an ICO, but you get tokens by paying fees instead of sending Ether.

Fcoin introduced the first trans-mining token and CZ explained why their method is not sustainable. Let’s take a look at the Fcoin model:

  • 49%: The team, private capital, partners, foundation
  • 51%: Trans-mining (community)
  • All tokens are unlocked on the same rate

For every 1 Fcoin mined by the 51% community, 0.96 Fcoin is unlocked from the 49% reserved for the team. On top of this, there is a bonus for referrals of ~20%.

Let us walk through an example. Please assume that 1 FT = 1 BTC.

Jose trans-mines 100 BTC worth of FT through trading. So now Jose has 100 FT, the team also unlocked 96 FT and the referrals received 20 FT. So jose invested 100 BTC and 216 BTC were injected in the supply.

Think of this in terms of an ICO, you pay 100 BTC but create 216FT. Since the supply growth outpaced your investment, you actually lost money. In this example, your investment instantly loses 54% (assuming a total of 216 FT) of its value because of the increase in the supply.

For investors, this means that FT will keep losing value until the supply has been completely mined. It is hard to say if the dividends will make up for the difference in lost value, especially if you are not mining for new FT and you are just a HODLer.

In addition, once all tokens have been mined, the volume on Fcoin will decrease (normalize) and FT will change in price to reflect the transaction fees charged. Volume follows the exchange with the lowest fees.

Bgogo alleviates this issue by implementing the following:

  • 100% of the fees incurred (yes 100% as opposed to Fcoin 80%) are used to burn BGG tokens, instead of paying dividends to the holders.
  • 20% of the tokens that will be used for operations/community are released in tandem with the trans-mining tokens.
  • 20% of the tokens for the team are vested for 4 years.
  • The top 21 HODLERS (the supernodes), have their tokens locked during their tenure (more on this below)
  • Bgogo placed a limit on how much BGG can be mined per day to ensure that it will take 4 years to unlock all tokens. The “unlock rate” can be found on the whitepaper, as it changes every month. Fcoin on the other hand, will have all its tokens mined in less than 6 months.

It is true that 50% of tokens from the first supernodes are unlocked right away. We will explain why that might not cause selling pressure on the token.

If they do not implement a referral bonus like Fcoin, BGG will hold way more value than FT because as shown above, the supply is inflated at a much slower rate.

 


Super nodes | “One Vote, One Listing”

Bgogo prides itself on the way coins get listed on the exchange. As you noticed, 10% of the supply was sold to 21 entities (we referred to them as token investors). They will be the first 21 super nodes on the platform. Why does an exchange need a supernode, you say? Supernodes have the following characteristics:

  • Tenure lasts for 90 days
  • The richest 21 Accounts become supernodes
  • Supernodes are elected based on their daily balance
  • All supernodes will have their tokens locked during their tenure!
  • Each supernode gets to list one coin during their tenure!
  • Each supernode gets 20% of the trading fees incurred for the token they listed!

As you can see, being a supernode in Bgogo exchange is awesome! Anyway, you probably noticed that supernodes rotate every 90 days. Therefore, the first supernodes are an exception to the holding rule and will have 50% of their tokens released right away. The Bgogo team justified this by saying it provides liquidity. But…let’s take a closer look. The first supernodes have an incentive to hold their BGG if they wish to run for a second tenure. Because if they dump their tokens, a whale can scoop them up and become a supernode in the next tenure. On top of this, supernodes will be KYCed to ensure that they are legitimate. Hopefully, it will be a fair assessment so that all BGG holders will benefit.

I, Jim (the noob who edits these articles), thinks that there could be a risk of insider trading. They can choose to list shitcoins to temporarily boost their price. Anyways…back to Jose.

That is a fair point Jim, but all supernodes are legitimate parties and have their names on the line. In addition, they have their tokens locked during their tenure. Such actions could cause their BGG to lose a lot of value! Think of their locked tokens as insurance of honesty.

Let’s recap:

  • 21 richest accounts will have their tokens locked
  • 100% of fees are used to burn the BGG token
  • The team has their tokens locked for 4 years

As you can tell, the BGG token is designed to hold value and not depreciate like FT. But hold on! Is something wrong here? Bgogo’s exchange does not make money from fees… and does not decide what coins get listed, so no listing fees! How do they stay in business??? hmmm…

This is where Bgogo gets really interesting. The exchange is just a vehicle to build their ecosystem. Bgogo aims to profit through other arms of their company; Blabs, and a “decentralized VC firm”.

It should also be noted that the $10M USD raised from their equity investors will keep them running for 4 years. They’ll be around for a while!


Blabs & Decentralized VC

Bgogo will incubate Initial Coin offerings and help them grow from the ground up; From ideation all the way to listing on an exchange. The cool part? BGG HODLers will get a pre-sale allocation for all projects incubated by Blabs based on their holding. But wait, there’s more! If you take a look at the first 21 supernodes, there are big VCs among them, DHVC, Pantera cough. Yes! Those VCs will give some of their allocations to BGG HODLers again based on their holdings! BGG is meant to be held, guys!

This is pretty smart if we think about it. Exchanges have the KYC of all their customers, wallets, and means to distribute tokens! Exchange + ICO Incubator + VC idea is quite synergetic.

But why would VCs share their precious allocation? Well…if they work with Bgogo, they get to charge listing fees ($$$$), they also receive 20% of the trading fees generated by the coin they listed while their tenured (more $$$$).

Community


Verdict

New exchanges are seeking to add value to their customer base so they can steal market share from Binance. The latest fad is a mechanism called trans-mining. It brings massive volume to an exchange during the mining period. The first person through the door always gets targeted by competition. Fcoin had a great idea, the issue was that they did not account for human malice and their exchange reached godlike volume levels (Fcoin had more volume than all other exchanges combined at one point) through wash trading/bots. Their implementation causes high inflation, which harmed late investors.

Bgogo tweaks the Fcoin model by making it more attractive to HODL its token. They do this by offering incentives besides dividend payouts (in their case burning BGG).

In Fcoin’s case, the dividends will reduce greatly as soon as all tokens are mined because their volume will normalize. The volume follows the exchange with the lowest fees and lower fees = fewer dividends. Bgogo is playing the long game. They ensured that it will take 4 years for all tokens to be mined, they lock the 21 richest accounts, they burn the BGG token supply and the team has a long vesting period. To top it all of, they are planning to provide a pre-sale allocation to BGG HODLers based on how many tokens they hold. Together, these incentives give the BGG token more utility than BNB, FT, and all other exchange tokens thus far.

The current team does not have much experience in building trading platforms. Their forte is in making investments, which is directly linked to Blabs and the “decentralized VC” concept. The CTO is a security expert, which is the number 1 concern for exchanges. The UI/UX of Bgogo could be better, but that is easy to change. Remember, the success of Fcoin and Coinbase can be attributed to the design & functionality of their UI/UX.

Altogether, it is a strong project. The additional value of getting allocations from VCs like Pantera, DHVC, 8 Decimal, and Node Capital is nothing to scoff at. As always, please read their whitepaper and check all their social media before even pondering on investing! Thank you for very much!


Useful links:

Official website: https://bgogo.com
Telegram(EN): https://t.me/Bgogo
Telegram(CN): https://t.me/BgogoChinese
Facebook: https://facebook.com/BgogoExchange
Twitter:
https://twitter.com/BgogoExchange

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