ICO Review — Ankr Network (ANK)
By: Lennard Neo
Tags: Blockchain, Ethereum, ICO, Bitcoin, Cryptocurrency

On the 21st of June 2018, Picolo Research released an ICO review report on Ankr Network (ANK). View the full report here.

Distributed Cloud Computing Network on Trusted Hardware

Ankr Network is a 3rd generation blockchain with multi-chain features. It adopts a consensus algorithm called Proof of Useful Work (PoUW). Ankr’s efficient mining mechanism within a shared computing environment will enable Distributed Cloud Computing (DCC). In addition, they are one of the first to leverage the use of trusted hardware (Intel SGX).

Company overview

Ankr is based in San Francisco with a goal to create a revolutionary multi-chain and useful work based blockchain. With a user-friendly infrastructure, Ankr seeks to tap into idle computing resources using trusted hardware, enabling decentralised cloud computing (DCC). Some of the issues they seek to resolve includes:

Waste of power consumption using PoW consensus

Lack of trusted oracle services that connect existing business to the blockchain

Scalability issues such as low Transaction per Second (TPS) and overcrowded blockchains

Token Sale

The team has not released any information on the deal structure or token metrics publicly. The company indicates the hard cap will be $16m. However, we are unable to verify this information with the team. More details will be released soon.

Commercial & Technical Strategy

Ankr will develop a resource efficient blockchain with a native oracle service. They will be utilising a trusted hardware to initiate the mass adoption of their network. The core features of Ankr blockchain includes:

Proof of Useful Work (PoUW) consensus — A consensus that utilises energy efficiently to solve complex hashing problems as compared to Proof of Work (PoW). This mechanism will also reward miners equivalent to the amount of correct work that they put in.

Intel SGX enclave — Using a trusted CPU hardware that provides the computation power, and act as trusted proctor to validate miners’ useful computation and provide proofs for miner rewards.

Native Oracle System (NOS) — Ankr’s native data feed system to execute smart contracts

Plasma Sidechains — A protocol for building unlimited side chains to improve the efficiency of the main chain. It also has the flexibility to integrate new cryptographic methods (e.g. ring signatures of ZkSNARKs)

Below depicts a graphical representation of Ankr’s consensus protocol.

Roadmap

The project was incepted in Q4 2017 with a research study conducted by the team on the feasibility of their works. The team provided a simple development roadmap on their website and here are some major developments in the near future:

Jun 2018 — Whitepaper Release

Jul 2018 — Prototype Release

Token Use

The main token functionalities are of 3 folds:

Currency/ payment transaction — ANKR circulated on Ankr’s blockchain will be used to facilitate the fees incurred for using the blockchain.

Mining — Users will be able to earn ANKR by providing computing power to the network.

Community rewards/ incentives — ANKR will be used to incentivise user engagement within the network

Team

The team consists of ~11 employees that is well-blended with academic and commercial experience.

Here are some of the notable team members.

Chandler Song (Co-Founder & CEO) — Overall, Chandler has 2 years of experience in software engineering. He has short term stints with CitySpade, Amazon and SAP.

Stanley Wu (Co-Founder & CTO) — Formerly a tech lead in Amazon, Stanley has over 10 years of experience in large scale cloud services. He holds a MS in Electrical and Computer engineering from Rochester University.

Ryan Fang (Co-Founder & COO) — Graduated recently with B.S. Business and had numerous internship experience with top tier banks that includes Credit Suisse, State Street and Morgan Stanley.

Song Liu (Chief Security Engineer) — Song Liu had over 7 years of experience and was formerly with Gigamon, Palo Alto Networks, General Electric (GE) and Electronic Arts. He holds a MS in computer Science from Boston University.

Yan Ji (Scientist) — Currently a PhD student at Cornell University with a focus on applied cryptography.

Quanlai Li (Blockchain Engineer) — A computer science serial entrepreneur with over 3 years of experience. Formerly worked at Uber, Club Factory and Insigma and is a committee member of a symposium of Application of Blockchain. He holds a Master of Engineering in computer science from UC Berkeley.

Akash Khosla (Blockchain Engineer) — Akash is a third year Electrical Engineering and Computer Science student at UC Berkeley. He has short stint work experience at SAP and Earn.com and is a co-founder @ Blockchain at Berkeley. He also teaches a blockchain course at UC Berkeley.

Advisors

There is a total of 2 advisors.

Jiangang Zhang (Technology Advisor) — Founder, CEO/CTO @ PDX Technologies Inc, with over 20 years of technical and leadership experience

Christel Quek (Marketing Advisor) — Co-founder @ BOLT, Advisor @ Zilliqa, Advisor @ Switcheo Network, Advisor @ Lightbulb Capital

Investors

Ankr has obtained investments from several strategic investors. Some of the notable investors include:

NEO Global Capital — A Chinese firm that invests in inspiring blockchain related projects. Past investments include Bluzelle, Zilliqa, Trinity, Fortuna, RuffChain, IHT, Ontology, Dekrypt Capital, mainframe, Switcheo Network.

JLabs — An investment division of a leading Chinese private equity group, JD Capital. Jlab has participated in over 20 token sales in infrastructure, applications that include (Aelf, Ontology, Metadium, Thunder Token, MyToken, CoinTiger) and had a partnership with Huobi Labs

DHVC (Danhua Capital) — DHVC is a VC fund that invests primarily in early stage and growth stage company with disruptive technology. They have also invested in Polychain capital seed round.

OK Blockchain Capital — Owned by OK Group, which has a strategic partnership with OKEx. OK Blockchain Capital is committed to providing comprehensive support to promising blockchain projects and top-notch teams, to help grow the industry.

LinkVC — LinkVc focuses on working with block chains, digital money and Internet financial services investments and projects. Past investments include Quoine, Ripio Credit Network, TenX, Genaro, Raiden, Cybermiles, Aelf, Zilliqa, Light Chain, ArcBlock, InsurChain, Tezos, Libra Credit, Quarkchain, Pchain, Fusion, Iotex, Eden Chain, NKN, Fantom, Certik

Partnerships

Ankr has both exclusive and research partnerships in place.

CitySpade — Real Estate brokerage firm based in New York, providing household rental and services for students and young professionals. Managing over 6,000 apartments with over $300m worth of annual rental value.

Blockchain at Berkeley — A student-run organisation at UC Berkeley that host events and programs centered around education, consulting and innovation to promote blockchain

DoraHacks — Headquartered in Beijing, the company had organised more than 100 hackathons in China that connected more than 3000 hackers globally.

Strengths

The use of widespread hardware technology (Intel SGX) to unlock an array of idle resources creates potential to increase adoptability of their blockchain

Utilizing verifiable computing technology as PoUW reward workers based on functional work done rather than the first worker who solves it in PoW. Hence, hardworking workers will be highly incentivised to use their blockchain.

Focus on niche industry include real estate, fintech and art collection

Plasma code on Github has 93 commits with a significant amount of work done (Screenshot Github)

A strong panel of strategic investors, which had a track record of making successful past investments.

Low hardcap of $16m, which is attractive for similar projects in this space.

Weaknesses

Currently, the project is a whitepaper proof of concept with no mentions on the timeframe for launching their MVP

The team is relatively young with a couple still pursuing their degrees

PoUW consensus algorithm is a relatively new concept with many unknowns and has little commits in GitHub. However, some codes are not public and will be released on a later date

Use of trusted hardware has received many skepticisms in the past, as critic sites potential backdoor opportunities to those content.

Opportunities

The use of trusted hardware — Under a Trusted Execution Environment (TEE), codes and data loaded within the processor will be protected with confidentiality and integrity. Ankr’s usage of Intel SGX would allow it to achieve higher reliability and efficiency of their Oracle System. In addition, the widely used Intel’s hardware would increase the network adoption rate.

To efficiently use idle energy resources to prevent massive energy consumption in mainstream blockchains — Electricity usage to mine cryptocurrencies has hit the roof. The consumption of power by the entire bitcoin network has surpassed several countries that include Ireland, New Zealand and Hungary. The current mining eco-system favors the fastest computer that burns the most electricity as it is a winner-takes-all game, where the reward is only paid to one. Hence, the other contenders who were trying to solve the code would have their energy resources wasted.

Threats

Intense competition within decentralized cloud computing space in both established space (Aelf, Dadi, Sonm) and upcoming projects (Dfinity, Oasis Labs)

Conclusion

Picolo Research is neutral on this ICO project as we have several concerns with the relatively inexperienced team as well as the uncertainties in launching the PoUW algorithm. There are currently a few established projects in the space with several more slated to launch their ICO in the near future, which may cause overcrowding of such projects in this area. On a brighter note, they have the backing of several strong strategic investors, which have conducted critical due diligence on the project.

Overall, for the reasons listed below, Picolo believes that investment in Ankr Network is highly speculative:

Relatively inexperienced team

PoUW consensus, even though it is a novel idea, is still a relatively new concept with limited academic research

Limited visibility in their roadmap, in both technical and business development

Not withstanding the above, we are optimistic about solutions within the TEE (Trusted Execution Environment) sector as it provides higher security and isolated executions for the blockchain. Efficient use of idle resources is also one key aspect of reducing energy waste in PoW mechanisms. Therefore, we do acknowledge the upside potential should the team execute the project successfully, however, it will be a long-term play.

In light of the preceding, we remain neutral on Ankr Network and believe it requires a highly speculative appetite for investment.

End.