Chroma CHR Report Blockfyre

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1. SENTIVATE REPORT BY BLOCKFYRE | PAGE ‹#› BLOCKFYRE
2. Executive Summary • Chromia is both a blockchain and a relational database. This means that decentralized applications (dapps) can be written in a way that is familiar to developers all over the world, whether they work on large enterprise applications, games, or smaller projects. • Chromia is developed by ChromaWay, a Swedish blockchain firm that has been strongly involved in the industry since 2014. • Besides having an experienced Team Chromaway advisers include Charlie Lee (Litecoin), Vinny Lingham (Civic), Correy Voo (ex CTO at UBS, and Yiseul Cho (Venture partner FBG and co-founder of Hashed). Highlights Risk & Concerns • They are facing strong competition in their market. • Chromia is not very decentralized as the service providers, who are needed to create consensus are initially selected by an entity created by ChromaWay who is also the biggest initial token holder, this might change in the future, but it is safe to say, that the dilemma of decentralization vs. scalability is not entirely solved. Ticker CHR Price $0.05 USD ICO Price $0.05 USD Market Cap $3.4 Million Circulating Supply 64.829.352 CHR Total Supply 238.562.896 CHR Token Type ERC20 Mainnet No Website chromia.com Chromia formerly Chromapolis, is both a blockchain and a relational database. They are aiming to help existing businesses to adopt blockchain without disrupting current legacy systems. Overview Source: Blockfyre Research | Chromia whitepaper, Coingecko
3. What problem does it solve? Fundamental Problem: Technological limitations • Smart contract platforms and cryptocurrencies still have not been able to achieve mass adoption due to scalability and user experience issues. There are virtually no examples of decentralized applications (dapps) achieving widespread usage outside of small niche markets with limited amounts of users. • Overall bad user experience as a result of many different factors prevent dapps from going mainstream: High fees - due to the limited capacity of current blockchain platforms, where the transaction fees are proportional to the amount of usage, these fees can rise up to an unsustainable amount and have to be paid for every interaction, making applications simply too expensive to use. Complicated developer experience - due to the use of error or manipulation -prone contract language and no ability to execute contract upgrades at the platform level, resulting in separate layer solutions which further increases complexity. In addition to that, Poor data modeling tools often force developers to rely on centralized third party services. On the user side, Poor security is another big issue, resulting in a higher risk for users and therefore lowering their trust in these applications and systems. • Recent attempts to solve this problem have often resulted in a dilemma of scalability vs. decentralization, where higher scalability always resulted in lower levels of decentralization, e.g. EOS x High fees and no scalability Bad user experience Bad developer experience Lack of security and privacy Source: Blockfyre Research | Chromia whitepaper
4. Chromia’s solution Solution : Postchain and the Relational Model x • Chromia is a new blockchain platform for dapps, the goal of Chromia is to tackle the shortcomings of existing platforms, it is designed to enable a new generation of dapps to scale beyond what is currently possible. In their Whitepaper, the team mentions three priorities: Allowing dapps to scale to millions of users, improving the user experience of dapps to achieve parity with centralized applications, allowing developers to build secure apps with using familiar paradigms. • The main advantage of Postchain is that it utilizes the relational model for database management, it allows for the modeling of complex blockchain data efficiently and flexibly. The relational model is also well known, making it more efficient for developers to implement new applications. • "RELL" the relational programming language ensures that all dapp backends on Chromia are written in a specialized language which is deeply integrated with the relational model. This model increases programmer productivity and ensures application consistency. • Advantages of the relational model become ever more apparent, as decentralized applications deal with increasingly complex data structures, as it makes use of SQL database management systems (DBMS) which have been optimized for decades. Instead of following the more inefficient path of going through the dapp code directly, Chromia sends a query to the DBMS and uses its sophisticated query planning, to carry it out as fast as possible, allowing dapps to perform a large number (100k+) of queries. • This also allows dapps can quickly retrieve the information they need directly from nodes running the application. Source: Blockfyre Research | Chromia whitepaper
5. x Advantages of Chromia First-class decentralized applications 
 On current platforms, all smart contracts (private wallets and multi-user contracts) use t h e s a m e re s o u rc e - m e t e r i n g , a n d programming model is very inconvenient for dapps designed for mass adoption. On Chromia, each dapp has its own blockchain (sidechain), and Fees are paid by the dapp as a whole, not by end-users 
 directly. Each dapp can have its own tokens, its own monetization, its own governance, allowing for a high degree of flexibility 
 Unlimited scalability Chromia promises high scalability up to millions of users via horizontal scaling with sidechain sharding. Each dapp has its own blockchain. Because each blockchain is run by a subset of nodes, it is possible to increase total throughput by increasing the number of nodes. Chromia aims to support 50 million token transfers per day per blockchain in the first versions of the platform. Transfers can be confirmed within 2 seconds, which should be enough to support in-person payments. Sustainable dapps and dapp updates Dapp developers have the freedom to create their own fee and resource use policies. Chromia also allows token economics to be integrated with the fee model. Furthermore, the platform is in line with the dynamic process of dapp development, meaning updates can be queued in the form of a smart contract that will then, at a predefined block height, modify the database structure in a series of codified and deterministic steps. Chromia’s solution Source: Blockfyre Research | Chromia whitepaper
6. System Architecture x CPChain’s solution • Postchain allows multiple blockchains to be hosted in a single database and allows one blockchain to see data belonging to another blockchain when that data is final, the goal is to simplify inter-blockchain interaction. • In order to achieve horizontal scalability, Chromia is divided in multiple blockchains, separated in “system” chains and a number of application blockchains: • Root chain. • Validators : root nodes.
 Purpose: keep track of the list of root nodes • Directory chain. • Validators : root nodes.
 Purpose: keep track of all participants and application blockchains. • Token root chain. • Validators : as defined in directory.
 Purpose: keep track of Chroma tokens. • Anchoring chain. • Validators : as defined in directory.
 Purpose: Defend against attacks on a subset of nodes. Chromia’s solution • All modifications to the state of the consortium database are recorded as a sequence of authenticated and deterministic transactions in a blockchain-like data structure. Source: Blockfyre Research | Chromia whitepaper
7. Consensus Algorithm x CPChain’s solution Chromia’s solution • Consensus is achieved with a BFT consensus algorithm, tolerating even malicious behavior from a limited number of consortium members. This means that as long as two-thirds of the nodes in the network are functioning correctly, consensus will be achieved. If a node falls out of sync, it can retrieve the lost data from its peers and rejoin the consensus process. • BFT allows transactions to be confirmed in seconds. When the number of blockchain’s validator nodes is 3f+1, a block must receive 2f+1 “votes” to be approved. Comments • We view Chromia's technical base which allows dapps on the network to run their own blockchain (and nodes), as well as the hybrid structure between blockchain and database as the main advantages of this project. In addition, the Chromapolis relational model allows data to be easily administered and accessed by API. • As the platform is database-centric, it is already proving to be better suited for data-intensive applications, than many of its competitors. • There are many projects out there, trying to solve the issues of current blockchain platforms, most of them focus on sidechain scalability or different consensus algorithms to boost their scalability, Chromia's hybrid model is a unique solution, enabling enterprises to adopt blockchain technology without eradicating existing legacy systems. • However, the relational model also has some disadvantages, which the team admits in their whitepaper, but still, it seems to be a promising approach when it comes to the ability to scale in terms usage and developer activity. • Currently, Chromia is still using a fairly centralized development and governance model. Eventually, existing providers will be able to vote for new providers. The goal is to have thousands of providers, but it is uncertain how long this will take. Source: Blockfyre Research | Chromia whitepaper
8. Industries and Use cases x Land Registry ChromaWay is the first company to have the first Western government exploring blockchain for Land Registry. In June 2016, the first demo was released. In 2018 the first full transaction on the platform was completed. Also in 2018 a partnership with Daimler Grund Services Gmb (DGS) was formed to reduce risk and make lease agreements more transparent. Chromia is a multi purpose blockchain solution, which can be applied to various industires and usecases. We explored four of them. Universal Identity Hub ChromaWay partnered with ABT Associates and Cadasta Foundation to release the Universal Identity Hub (UIH) solution. UIH focuse es on the needs of women and families in fragile contexts. The registry is build on ChromaWay’s consortium database technology, Postchain, and is integrated with Cadasta’s land documentation application. Gaming Green Assets Wallet in 2017, ChromaWay and Stockholm Green Digital Finance launched a platform called Green Assets Wallet. By providing trusted verification and validation infrastructure, the Green Assets Wallet unlocks and mobilises huge amounts of private capital for green projects in both developed and emerging markets. ChromaWay chose Gaming as one of the initial Usecases for their platform. It showcases that Chromia can have complete game-worlds and logic on chain, not just NFT based games and will bring new forms of user controll and flexibility to the gaming world. Source: Blockfyre Research | Chromia whitepaper
9. x Partnerships • The current use cases for ChromaWay technology allowed the team to secure valuable partnerships early on in the development of their platform. • The critical differentiator between Chroma and its competitors has to be adoption. Not many can claim to be in pilot projects with so many organizations and governments. The winner of the blockchain race isn't who is necessary the fastest and cheapest but who is the most widely adopted. • For us, Chromia stands out in terms of their partnerships, and it is clear to see that the team is already taking significant steps towards mass adoption. Industries and Use cases Competition • There are several blockchain projects out there that are aiming to solve the same problems. Even if we narrow it down to projects, who are focusing on solving the scalability problem and are targeting industries and use cases, which require processing of large sets of data and high throughput, such as gaming, there are still many competitors. Recent competition in the scalability space is Eos, Quarkchain, Zilliqa, Icon, Harmony, etc. Source: Blockfyre Research | Chromia whitepaper
10. Tokenomics - CHR Token Information Symbol CHR Decimals 6 Contract Address 0x915044526758533dfB918ecEb6e44bc21632060D Type ERC20 Network Ethereum Supply 64.127.230 238.562.896 Total supply Circulating Supply x 27% 73% Source: Blockfyre Research | Chromia whitepaper, Etherscan ICO Token Allocation Promotion Budget Locked Automatic conversion contract Team Advisors Public Sale System Node Pool Private Sale Bonus 38% 25% 5% 5% 4% 3% 3%
11. Tokenomics - CHR Utility • CHR tokens are used by dApps to pay hosting fees and to peg dapp tokens. Additionally, nodes running the Chromia system (a mega dapp in a sense) are also rewarded by part of the dApp hosting fees. • CHR tokens provide the mechanism for creating incentives within the Chromapolis ecosystem. Nodes must stake a certain amount of Chroma tokens to participate in the network. x • The unique approach Chromia takes toward the token economy of the ecosystem means it is mostly dapp providers themselves who reward nodes for participation. Dapps which deploy native tokens have the option of backing their tokens with Chroma, to increase liquidity and allow for easier exchange of value between other dApps within the ecosystem. • Most promotional tokens are locked and slowly released over five years: At the start: up to 30 %, after one year: up to 53 %, after two years: up to 71 %, after three years: up to 89 %, after 4.5 years: 100% Comments Current Token Allocation 70% Promotion Budget ChromaWay Reserve Automatic conversion contract (ETH - CHR) 15% System node compensation pool 3% 2% Source: Blockfyre Research | Chromia whitepaper, Etherscan
12. Tokenomics - Wallet Analysis CHR ownership Circulating supply • The circulating supply is around ~65 million CHR • The ownership of CHR is unevenly spread over 926 wallets • The top 5 Wallets are holding over 64% of the supply. • The 2nd biggest wallet is held by Kucoin, who are holding nearly 14% of the supply. x Source: Blockfyre Research | Etherscan, Exchange websites • Most the top adresses belong to the team, including the promotional token allocation, which is still locked, and will be unlocked on a yearly period. • The token distribution is highly centralized with 10 addresses holding 88% of the total supply Rest 36 % TOP 5 64 % 943 addresses in total Team Wallets
13. Exchange listings x Type CEX Trading against BTC, ETH, USDT Fees - Withdrawal 10 CHR - Trade (maker) 0.04% - Trade (taker) 0.04% Website bitmax.io Bitmax • CHR is traded on KuCoin, Bitmax and Bithumb Global. • Daily trading volume for CHR is around 5M USD • The volume is relatievly evenly spread between these three exchangest • CHR is also listed on Hotbit but the trading volume is not substentail enought to play a role in this report (<1% of total volume) • The wallet analysis in combination with the low trading volume indicate that CHR is mainly held by a relatively small number of long term investors. Comments Source: Blockfyre Research | Coinmarketcap, Exchange websites 29% 36% Reported 24h volume (11.07.2019) < 1 Million USD Type CEX Trading against USDT Fees - Withdrawal 10 CHR - Trade (maker) 0.15% - Trade (taker) 0.15% Website bithumb.pro Bithumb Global Type CEX Trading against BTC, USDT Fees - Withdrawal 10 CHR - Trade (maker) 0.1% - Trade (taker) 0.1% Website kucoin.com Kucoin 35%
14. Price analysis • CHR was listed on exchanges end of May 2019. Since reaching an ATH mid June, the price decreased in value from over $0,11 to its current price of just above 0.05$, which is a price decrease of around 37% over the last 30 days. Comments x Source: Blockfyre Research | Coincodex • The price depreciation is mostly attributable to the fact that CHR was launched during the bear market. So CHR price action was strongly correlated to BTC & ETH movements • Although the market shows a bullish turn more recently, CHR still didn’t recover. In our opinion the main reason here is the lack of marketing, overall awareness and the strong correlation to the overall market. • However, given the highly promising technology Chromia is developing, we believe that CHR is currently a good buying opportunity, as it’s bottomed out and we expect more marketing soon.
15. Team Description • The team has been in existence since for many years, with a wealth of experience developing blockchain projects in the private sector. All founders and leading roles within the team have been in the crypto space since the very early days, being resposible for a number of investions, that we are still benefiting from today. Henrik Hjelte Alex Mizrahi • CTO of ChromaWay • graduated from Donetsk national university, he got into crypto in 2011 by building the first ever decentralized exchange which he never launched. • Alex was one of the sidechain concept inventors, did the first implementation of Bitcoin 2.0 and invented coinjoin. • He led the open source colored coins project from 2012. • Author of several academic papers about Bitcoin. Or Perelman • CEO of ChromaWay and Chromapolis • 25+ years experience as a developer and 10+ years as an entrepreneur. • Henrik co-founded the coloredcoins project which was the first way to issue tokens on the blockchain. • Worked at many top companies in Europe such as Eniro, Nasdaq, Kambi and more. • Henrik is in crypto since 2012 and Alex and Henrik work together before crypto in a company called Stix, founded by Henrik. • COO and co-founder of ChromaWay • First person to be interviewed by TechCrunch on bitcoin in 2011. • Co-founded one of the first use-friendly bitcoin wallet in 2011 (Safebit) with Stefan Thomas (Ripple's CTO until 2019) • Co-founded the coloredcoins project with Alex and Henrik • Finished LLB in Law from College of Netanya x • However, in the furture, the team wont be able to rely on their skills, connections and experience alone. Even if we asume they developed a supirior technology, the project itself lacks recognition and marketing efforts, this is were the team show its wekness and needs to improve. To be succesfull in a crowed market, this will be an essential step for Chromia. Source: Blockfyre Research | Chromia whitepaper
16. Conclusion x General opinion about Chromia We are very optimistic, that Chromia has the team and partnerships to realize their vision. One aspect about Chromia that we really like is the fact, that the team isn't positioning their platform as just another “Ethereum killer” in a way, that they are rather focusing on their strengths and strong real world usecases, aimed at business orientated dApps that need to use lot of data. High upside potential If we assume a growing adoption of blockchain technology by businesses and organizations will take place in the coming years, and considering the proven track record of Chromia due to their wide-ranging use cases, we are convinced, that the project is well-positioned, to capture a significant market share. In terms of potential upside as an investment opportunity, considering that the market capitalization is still very low relatively, CHR is undervalued. Long-term investment Chromia's success and growth rate are highly dependent on the overall adoption of blockchain technology. This is a factor, the team has limited control over. Although we already see real-world implementations, this process might take several years, to fully develop into widespread adoption. Therefore we have to mention that CHR should not be seen as a short term trade but rather as a long term investment. Risk & Concerns Chromia has several limitations in terms of being truly decentralized, and it remains unknown if they will ever be able to achieve that. Furthermore, we have to mention that, while Chromia might be well-positioned, the risk of better competitors entering the market in the future, is still there. However, we also believe that the market is big enough to accommodate a few players. !
17. Chromia Rating Product 11/15 Community 10/15 Traction 9/9 Team 7/9 Trading 9/12 Network 6/15 Whitepaper Competition Speed Value Roadmap Website Social Media Communication Advisors Influencers Development Status Number of txs Partnerships Background Team Profit (1 month) Profit (1 year) Exchanges Token distribution Google Trends News Mentions Twitter Follower Telegram Follower Reddit Follower Total score: 52 / 75 = mediocre short term, very good long term investment x Dev engagement Contribution Speed
18. Blockfyre Jonathan Habicht Simon Dedic Disclaimer We have been compensated in CHR for this report. We have not been in contact with the team If you like this review, don't forget to share it! Follow Blockfyre x