I also want to make it clear that this coin just got out of ICO. As such, there is limited information, and some of the details could change at a later date. Investing in such a new and low cap coin always involves increased risk. Always do your own research. This is also not investment advice.
For the lazy: The TLDR bullet points are at the end
Overview and analysis
They have been building this decentralized marketplace since Q3 2016, so it is further ahead in development than one would initially think. They launched the closed alpha version in Q3 2017, a closed beta in Q4 2017, and the open beta will be released in Q1 2018. Since we are already in Q1 2018, this release of the open beta is coming up soon.
The full release of the marketplace will be Q2 2018. Jukka has informed me that the scope of this release has been widened to include many more features than shown in the whitepaper. Additionally, some features that were planned to be added in Q4 2018, are now being included in the full release in Q2 2018. This includes an interesting feature that allows you to start a promotion for the products you would like to sell. If you start a promotion, then other users can refer a buyer, and if the transaction takes place, they receive a reward. For the full details check out page 7 of the technical whitepaper link at the bottom of this post.
The soma token (SCT) has been created to allow buying and selling on the decentralized marketplace with no fees. This is similar to how STEEM is used as payments on Steemit, which has proven quite successful. That said, the marketplace will also accept normal fiat for people who like that kind of thing. The fact that transactions with SCT will carry no fees should be incentive for people to use soma instead of fiat. Thus, this should increase demand for soma token and raise its value.
The soma team is based in Finland, and appears to be well rounded and pretty flushed out. They have a large number of employees covering all the requirements of management, development, legal, security, design, and advisors. This is not just a 2 person team like we sometimes see in crypto these days; this is a team of 17 people. Looking through the team’s LinkedIn pages shows that they at least have some related experience in the area. Further, the fact that they are about to launch the open beta shows that the team is able to deliver on it’s promises.
Why its undervalued
Note: the prices may have changed since I wrote this. Always double check the numbers yourself.
Soma just finished their ICO where the price was 450 tokens/eth (see picture). At the current price of eth, that is a value of $1.88 USD/token. The token is currently trading on ED at almost 10x less than that ($0.24/token at the time of writing). This magnitude of discount on a token after ICO is rarely seen. This will also create a very low supply in the sell order book because nobody wants to sell at a 10x loss, which causes upwards movement.
The team allocated 54 million tokens for the ICO, with a total number of tokens of 60 million (see picture). However, only 9.8 million tokens were sold (https://soma.co/token-sale/), and the team has said in the telegram chat (https://t.me/Somacommunity) that they have already burnt the remaining tokens (see picture, or check their telegram). If you take into account the 6 million tokens that the team saved for dev, then the total circulating tokens is somewhere between 9.8 million and 15.8 million. Since it is unlikely that they have sold all of their dev coins yet, it is probably closer to the lower end. I asked Jukka to confirm the circulating number of tokens. His response is shown in the picture and shows that there will be around 10 million tokens.
Considering the details above, the market cap is approximately 10 million tokens * $0.24 USD = 2.4 million USD. This is an extremely low market cap for a token that already has a working product, and is releasing the open beta very soon. It should easily be 10x this market cap. I believe this is the case because nobody has taken the time to correctly calculate the market cap, and Coinmarketcap doesn’t show it either. If one would naively check the soma website and see 54 million tokens, one would think the market cap is 13 million. However, a bit more research will show that this number is 5 times higher than the actual cap.
Another indicator that Soma is undervalued is a look at the market cap of potential competitors. Two competitors come to mind: Divi and Pirl. Divi has a market cap of $18 million, and Pirl has a market cap of $14 million. These are both more than 5x greater than Soma at the moment.
Considering the fact that competitors such as Divi and Pirl (which are both great projects as well) are also trying to make a decentralized marketplace, getting to market fist an important factor. Divi is also releasing their product in Q2 2018, and according to their roadmap, Pirl has not yet started developing their marketplace. Through our conversations, Jukka appears to be very aware of this and is focused on delivering the full release on time and ahead of their competitors.
Furthermore, there will be a new website coming in January, with an updated roadmap. They are also working on getting the token listed on new exchanges in January. I have attached snippets of telegram chats as proof, which come directly from the Co-Founder. You can also check telegram yourself here: https://t.me/Somacommunity.
Summary / TLDR
Here is a recap of the most important points:
- Good concept: decentralized version of etsy, amazon, ebay, craigslist etc…
- Strong team that can deliver on time
- Open beta of software coming Q1 2018
- They have unique IP that is patent pending in the U.S. to set themselves apart from competitors
- Price almost 10x below ICO price
- Token supply is 5x less than expected
- Market cap very low at approx. 2.4 million
- Market cap at least 5x less than similar projects
- New website coming in January
- New exchange listings soon
Conclusion
SCT seems very undervalued at the moment and has a high probability of increasing in value throughout 2018. However, with such limited information as of writing this it is still high risk. So I will be picking up a small bag while the price is low.
Sources
https://soma.co/
https://soma.co/wp-content/uploads/2017/09/Whitepaper-2-compressed.pdf
https://soma.co/wp-content/uploads/2017/07/Soma-tech-Whitepaper.pdf
https://soma.co/token-sale/
https://coinmarketcap.com/currencies/soma/
https://t.me/Somacommunity
https://etherdelta.com/#SCT-ETH