Attrace ICO Review

Good day, crypto-enthusiasts! Today I want to introduce to you a new ICO called a Atrace. What Attrace is doing is creating a decentralized affiliate marketing platform. I’m going to explain this all to you, tell you about the ICO, how it works, what the token does, and details about the token sale.

But before we go any further I want to state my usual disclaimer that this should only serve as an introduction to Attrace and should not supplant your own due diligence. Moreover, nothing I say should be considered a recommendation to buy or sell.

Industry Overview
Ok, so let's take a look at the overall affiliate marketing industry, which is quite interesting. Its size has been estimated at $13 billion in 2018 in terms of expenditures; the overall online marketing space is worth $260 billion. But affiliate marketing is the only pay-for-performance model in the whole online marketing space. What I mean by that is that publishers only get paid if the lead they send to the merchant converts to a sale. This model is highly favorable for merchants because they only have to pay for this type of marketing if they get paid themselves.

However, there is a disconnect here because 16% of all ecommerce revenue comes from affiliate marketing. Looking at the figures you have 5% of overall online marketing expenditures but roughly 16% of the revenue. That's a big discrepancy. So analysts argue that affiliate marketing should have a larger share. But there are many problems with existing systems that keep it from doing so.

In the video I post a graphic that I got from the Attrace website about how current affiliate marketing systems work. I won’t go into this in full detail but on a high level you can see that the publisher who owns a website, for example, shows an ad from a merchant. If the customer clicks on the link of an ad then they're sent to the merchant site via a tracking link created by an affiliate network. So the affiliate network is kind of like the middleman in this scenario. The customer makes a purchase, the affiliate network records the purchase details, and the merchant can approve or reject the sale. The purchase is ultimately recorded in the publisher’s account on the affiliate network, at which point the publisher finally receives a commission from the merchant via the affiliate network. Of course, the affiliate network takes a pretty big cut of the profit. As you can see, this whole system requires a middleman.

Pain Points
So what are some of the pain points here? Well, to list a few:

1. High affiliate network fees
2. Accurate tracking and attribution. Sometimes merchants decide to underreport sales and there's no remediation or way to audit their accounting.
3. The payment process is often inefficient. It take a long time late and publishers complain about late payments or missing payments.
4. There are very rigid, static rules regarding the value of leads. Publishers can differentiate between different leads that may offer different customer lifetime value, for example.
5. Publishers and merchants can't communicate directly. They have to communicate through the affiliate network or maybe just not at all so they can't work together to get better placement and rearrange the site, for example, to make the ads perform better.
6. There are also restrictions on who can become a merchant. This limits the size of the market considerably.
7. Publishers may try to trick the system to do cookie spamming, etc
   So what is Attrace’s solution? On a high level, Attrace wants to utilize blockchain technology, specifically smart contracts and the transparency component of the blockchain to track every single click and referral of a prospect -- not just the ones that convert to leads.

To do this Attrace decided to make a brand new dedicated blockchain using the Golang language. They will use delegated proof of stake with witnesses. The token holders who vote in as witnesses will get rewards in the token.
The user interface (UI) of the solution will be similar to existing affiliate network interfaces. This will make it easier to adopt with no hurdles or roadblocks.
Commissions will still be paid in USD or Euro between the two parties, but the plan is to migrate over to the Attrace token at a later stage.

Finally, the network fees will be paid by the publishers and merchants in Attrace tokens done in an efficient manner handled by smart contracts.

In the video I show a graphic similar to the last one but showing how the Attrace system will work. The start is the same but Attrace incorporates sub contracts where they record information about the publisher, they handle the fee payments, and every single click and transaction is recorded on the Attrace blockchain. This is awesome because this whole thing can work without the middleman who is effectively replaced by the blockchain. Also, the commission is way lower.

Benefits
The benefits of this approach are:

1. Lower fees -- 0 to 3 percent instead of the massive amounts before.
2. Full transparency for every click and referral so that everyone can audit the data.
3. Payment automation made possible by smart contracts and the blockchain.
4. Publishers can distinguish between lead values so they can integrate dynamic pricing.
5. The system provides a messaging interface between the publisher and merchant.
6. There are no restrictions to enter the network as a merchant.
7. The network can counteract publisher spam and fraud by charging a fee for every subcontract that's executed. So cookie spamming will become prohibitively expensive for publishers.

ATTR Token Details
The Attrace token will initially be an ERC20 token, similar to many projects these days. But the plan is to offer a token swap in Q4 of 2018. The total number of tokens offered will be 1 billion ATTR, which will be mainly to pay network and subcontract fees for all sorts of activities in the ecosystem. Publishers have to pay a small fee per sub contract executed. This fee is paid to the witnesses who maintain the blockchain. Merchants pay network fees each time they pay commission so 20% goes to the project team for expenses and 80% will be burned.

Competitors
There are some major differences between Attrace and its competitors in the blockchain space such as the payment options, decentralized click-tracking for every single click. Other projects just track the clicks that result in leads or sales, for example. Attrace will have a low commission rate, it will offer API integration, and spam protection

Roadmap and Progress
In terms of the roadmap and prior progress, what Attrace has done so far is to create the initial design, created the data models and network protocols. Basically, they have set all of the technical foundations in place and done some initial network and software testing. In terms of 2018 milestones, Attrace is going to do a lot of UI demos, they will test their data ingestion, and give a demo of their network explorer. They will also validate their protocol and hold their token sale which is coming right up.

Looking ahead for 2019 and beyond, Attrace will focus on influencer marketing and partnerships, acquiring more traffic, expanding to other countries besides where they are initially starting, which is the Netherlands, I believe. They will also add some advanced features to make their system even more robust and to lower the hassle for all of their users.

Team
Their team is led by Erwin Werring, Leonard Zwart, and Marius Jansen. They have solid experience in the entrepreneurial space, finance, economics, startups, and blockchain in general. The Attrace website contains extensive information on the team and so do the team’s respective LinkedIn profiles. As always I encourage you to go take a look to see if you think that prior experience means that they can execute on such a project.

Token Sale Details
If you’re interested in this project, here are the token sale details. A lot more information is available in their white paper as well. Attrace will sell 50% of tokens in their pre-sale and main sale. The pre-sale is coming up June 21st to July 5th with 200 mill ATTR tokens. The hard cap will be $5 million with up to a 40% bonus. The price is 1 ATTR per $.025 including the bonus. The minimum purchase amount is 0.1 ETH, which is quite reasonable in my opinion.

The main sale will come shortly after and will last from July 12th to September 6th with 300 million ATT. The bonus will go from 20% down to 0% and the price from $.029 to $.035. So definitely the earlier you get in the better the deal will be. For the main sale, the minimum purchase will be .02 ETH with a hard cap of $9.6 million.

How will they allocate the tokens? Fifty percent will go to overall ICO and the rest to founders, advisers, and ecosystem support and more. In terms of the distribution of funds raised, Attrace will use funds for project development, marketing, business operations and other typical expenses. In my opinion, their split is pretty standard.
If you’re interested in this project aiming to disrupt the affiliate marketing space, then I definitely do encourage you to take a closer look and join the community, particularly the Telegram group which is https://t.me/attrace.

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