Should You Invest In COBINHOOD?

Should You Invest In COBINOOD?

COB is an ambitious project, looking to offer us what seems to be the best exchange platform that the world can offer and they are making some bold claims.

“COBINHOOD will become NASDAQ and Goldman Sachs in the cryptocurrency market.” 

“COBINHOOD features ZERO trading fees to maximize traders’ profit and market liquidity. It has the ability to process more than one million orders per second, achieving the true “real-time” trading experience, and rendering it the world’s first cryptocurrency exchange capable of high-frequency trading.”

That’s great and all, but how exactly are they going to do that? Let’s take a look at what their white paper has to offer:
COB is looking to solve multiple problems, these include:

• Increased profitability for individual traders, they do this by eliminating the maker and taker fees that other exchanges have  which average around .2% per trade. The COB exchange promises to offer zero transaction fees, this will increase profits of regular trades in the long term.
• Increased security, they do this by storing approximately 98% of crypto assets in an offline multisig wallet, while only having 2% actively traded on the exchange. If the exchange gets hacked only a maximum of 2% of their assets can be stolen. 
• Insurance backed crypto, which is an incredibly important feature that I’m excited about, however I wasn’t able to find details as to who their insurance provider is. But if they do actually have an insurance company backing them this should ease the mind of the user base in case the exchange ever gets hacked. 
• Support for multiple FIAT currency: This opens the potential for a highly liquid exchange, the convenience of having everything in one place is a great selling point. Just think of how much volume multiple currencies will bring in. They currently offer support for these currencies: USD/EUR/JPY/KRW/CNY/HKD/CAD/GBP/
  AUD/NTD
• Customer Service & Languages Supported: If you’ve ever had to contact customer support for any exchange then you know why this is important, Cobinhoods goal is to have 24/7 support in multiple languages. (Chinese/Japanese/Korean/English/Russian/ French/German/Spanish/Portuguese/Arabic). If they are able to attract different regions of the world on one exchange that would also contribute to high volume exchange which means a more liquid exchange.
• Higher liquidity for ICO tokens, they do this with the use of their underwriting service (more on this later). 

COB will support 17 coins (more to be added in the future):Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Zcash, Monero, Ripple, COB, Neo, OMG, Tether, Dash, IOTA, EOS, REP, GNT. 

Decentralization: COB aims to launch their decentralized exchange around Q2 of 2018. If they deliver in a timely manner and it all goes smoothly we could see some price action with COB token. 

So at this point you’re probably thinking, how are they going to make their money? Cause they aren’t going to be able to support this platform if it’s all for free. 

COB will be offering an ICO underwriting service, this is where the majority of their revenue will be coming from. I look at this is a win- win situation for both the user as well as the ICO project, COB will receive x% of tokens in exchange for being listed on their platform, this helps with the low liquidity problem that new ICO tokens and traders face after the ICO is over.  
If the COB underwriting service proves to be useful and high quality this will provide the user base with high quality tokens and offer highly liquid ICO markets. A win-win situation. 

Another way they are able to earn revenue is through their margin trading service. “COBINHOOD will automatically determine the interest rate based on margin trading loan supply and demand. A portion of earnings generated from interest payments will be collected by COBINHOOD.” 

And finally they offer COBINHOOD Prime. Original right?
This is an annual subscription that offers members higher leverage on margin trading, lower latency ticker, and higher trading API rate limit. Also, COBINHOOD Prime subscribers will have escalated customer assistance, dedicated phone support, and a committed customer success account manager (not exactly sure what this means). 

The team consists of 6 people, these include: 

CEO  Popo Chen 

CSA - Tonny Scott

CTO - Mao Pu - Chen
They also have a technology team listed which include former employees from google, Microsoft, Lenovo, Cheetah Mobile and other companies. However, no pictures of the individuals within that team are shown. I’m a little confused as to why there wasn’t images of the technology team individuals listed in the whitepaper, it would make more sense to show exactly how many people are working on this project. 

Use of Funds:

40%  Product Development - Recruitment of top talent and new financial products and services.

20% Operation - Costs for servers and customer service

20% Marketing - For rapid increase in market share

10% Auditing & Security Compliance

10% Legal Affairs

I like that they have recruitment listed as a priority, if they’re going to pull this off they’ll need a big team and bright minds.
As you can tell they have a lot to work to do but they have a lot to offer. Only time will tell if this will be the ticket to the moon. 

My Thoughts: Currently this project has A LOT of “ifs”. IF they manage to pull it all off it will be one if not the the best exchanges to trade on. The zero trade fees alone is a great selling point, if they deliver everything else on top of that? The current exchanges are going to have some major competition. However, I plan on waiting until they have their exchange online and see if they can deliver some of their promises before I think of making an investment.

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