ICOrating

BITREWARDS Rating Review (https://bitrewards.network/)

ICO dates (01.04.2018 — 30.04.2018)

Web: icorating.com

Email: info@icorating.com

Twitter: @IcoRating

1. Ratings 3

2. General information about the Project and ICO 4

3. Description of the services and scope of the project 6

4. Market review 8 4.1. Description of the market niche 8 4.2. Competitive Analysis 9

5. Team 12

6. Token analysis 14

7. Analysis of factors affecting the future price of the token 16

8. Investment risk analysis 17

1. Ratings

We assign the BitRewards project a "Positive" rating. BitRewards is a platform for creating loyalty programs for online trading and service enterprises, based on a single ecosystem with the use of blockchain technology and an internal cryptocurrency. The project is very well-detailed, the documentation is prepared professionally and contains answers to almost all questions that occur during reading. The team’s competence is also evident, and confirmed by their professional background and the quality of the documentation. The project has a potential market, and can really take a significant share in this market if it offers a universal solution for carrying out loyalty programs. The tokenomy of the project is well thought through; certain scenarios will help to increase the value of the token.

2. General information about the Project and ICO

BitRewards is a platform for creating loyalty programs for online trading and service enterprises, based on a single ecosystem with the use of blockchain technology and an internal cryptocurrency. Its technology is based on GIFTD, a successfully operating SaaS project in the field of user rewards and loyalty. GIFTD has been operating for more than five years. BitRewards as conceived by its authors will enable small online stores to create an effective loyalty program, and large e-commerce enterprises to seamlessly integrate optimum methods of launching loyalty programs, without large financial or time costs for developing and supporting infrastructure or software products. These loyalty programs will be combined within a single ecosystem. The service can provide a unified management approach for different segments in e-commerce for loyalty programs, enabling their configuration and customization as well as cost savings on infrastructure and IT. BitRewards is implemented based on a blockchain system, a key feature of which is that members receive tokens instead of bonus points that they can use in any store, all connected to a single ecosystem. BitRewards tokens have a utility functionality. It is expected that shops will buy these tokens to reward buyers later. The legal structure of the company Singapore BitRewards PTE., LtdBitRewards (DAO) will be created after the end of the tokensale. The company's form of incorporation indicates that the project is likely to be localized in the Russian jurisdiction. BitRewards token has been very carefully developed from a legal point of view in accordance with Directive 2011/83/EU and the requirements of the SEC. Investors are presented with Terms and Conditions, a Token Pre-Sale Agreement, Privacy Policy, Disclaimer. Participation in the ICO requires passing KYC and verifying one's residency. Website Whitepaper Token: BIT (ERC-20 standard)

Platform: Ethereum Token Issue Volume: 2,000,000,000 Token Sale Volume: 1,280,000,000 Token distribution: 64.00% - Total for sale; 14.00% - Management; 43.050% - Advisers; 12.500% - Bounty; 2.50% - Marketing; 12.00% - Reserve for liquidity; 2.00% - Contingency All unsold tokens will be burnt. The exact number of tokens will be known after the end of the token sale. Soft Cap: $3m Hard Cap: $15m; after the dollar equivalent is reached, the crowdsale will be closed. Price: 1 BIT = 0.00003472 ETH Minimum Buying Transaction: 1000 BIT Accepted currencies: BTC, ETH Round 1: Private pre-sale Start: 25/12/17 End: 11/01/18 Round 2: Public pre-sale Start: 12/01/18 End: 27/02/2018 Round 3: Main Start: 01/04/18 End: 30/04/18 Token Issue Date: 10 Funding allocation: Additional:

● AML/KYC procedure ● Amounts of more than US$10,000,000 will be locked up for three months ● Bonuses in the placement process: 10/02/18 – 16/02/18 - 24%, 17/02/18 -

27/023/18 - 20%, 11/03/18-17/03/18 - 15%.

3. Description of the services and scope of the project

In this section, we discuss existing and planned implementations of the project’s services and focus on technical issues.

The basis for the BitRewards platform is the successful GIFTD ecosystem, which combines hundreds of small and medium online trading enterprises. In other words, the new project involves the implementation of blockchain technologies and the expansion of services for an existing software and IT infrastructure, which significantly reduces the technological risks of the project. BitRewards is a platform and loyalty ecosystem that enables retailers to reward their customers' purchases using cryptocurrency and blockchain technology. The project’s architecture includes services aimed at both retailers (subjects of e-Commerce) and buyers, with both being tokenholders. The platform has the following:

● Retailers. Plug-ins enabling connection to the ecosystem are developed for retailers’ trading platforms. Sellers can use statistical information along with custom tools to configure a system of rewards for buyers. A crypto wallet (BIT, ETH, etc.) that supports interaction in the ecosystem, as well as a number of additional services (a mobile app for sellers, email, SMS, a corporate loyalty system) have been developed for sellers. Functionality enabling sellers to convert cryptocurrency income to fiat has been developed, which is important for legal entities and their accounting.

● Buyers: A personal account with a crypto-wallet, a mobile application, storage system, loyalty card, gift card, and geofencing have been designed for buyers.

● Ecosystem: Infrastructural platform, community, a network for communications.

Overall, the services described are ready or close to completion or can be reliably realized. The technical side is already implemented, and its success largely determines the benefits of the BitRewards project. In addition to the services described above, the platform provides an infrastructure for the loyalty management system through modules or plugins for all popular online platforms (OpenCart, Shopify, WordPress, Magento, etc.), mobile wallets for

customers, mobile applications and browser extensions (Chrome, Firefox). The platform is easily integrated and has a simple API. To summarize, BitRewards is a B2B2C-platform in a high state of technical readiness. Its tokenomy and blockchain technology fit perfectly with the concept of the project and its infrastructure.

4. Market review

4.1. Description of the market niche

BitRewards defines its role as a loyalty platform for businesses operating in the e-Commerce market. Turnover for the e-Commerce global market, according to an evaluation presented in the Global Ecommerce Report 2017, reached a value of 1.85 trillion USD in 2017, having increased from 1.58 trillion USD in 2016. The growth rate was 17%. According to forecasts by Bigcommerce, by 2020 the global online trading market will be able to achieve 8 trillion dollars. Global payments using e-commerce retail systems amounted to 1.92 trillion dollars in 2016. Retail sales using a variety of e-commerce services, including payments for travel, tickets and restaurant payments using mobile devices, made up 8.7% of total trade turnover which was 22.05 bln dollars in 2016. By 2021, the e-commerce retail systems market will reach 4.48 trillion dollars and 15.9% of world trade. Source. In regional terms, the Asia-Pacific region accounts for 50% of e-Commerce turnover. The largest market for B2C e-Commerce, with a turnover of more than 681 billion USD, is China, followed by the USA (438 billion USD) and the UK (196 billion USD). Australia and Turkey show the highest rate of growth in e-Commerce sales – 40% and 31% respectively. And the average rate of growth of e-Commerce in all regions is 17%. Of all regions Europe has the highest share of e-Commerce in GDP (e-GDP) — 4.91%. But the Asia-Pacific region follows at her heels (4,87%). Of all countries included in the Global Ecommerce Report 2017, the UK has the highest e-GDP — 7.9%, followed by China (5.8%) and France (3.95%). In the Global e-Commerce Report 2017 the relationship between social media and trends in e-Commerce was noted. More than 53% of consumers have stated that social media affect their habits regarding online shopping, and more than 34% share their experiences of mobile and online purchases via a social network. Within social media, Facebook remains the most popular platform for e-Commerce. One of the major problems for e-Commerce is trust. More than 42% of consumers cited "trust" as a main challenge in online purchases. To succeed in the global e-Commerce market, it is important to create an atmosphere of trust for consumers, in particular those who make cross-border online purchases.

Another trend in the market is the appearance of smart contracts built on blockchain technology. The largest e-commerce platforms are Amazon, eBay, Walmart, BestBuy, Target, Alibaba (including AliExpress), NewEgg, Macy's, Overstock, and Barnes and Noble. It does not seem possible to find reliable statistics on the costs of maintaining loyalty programs. According to various estimates, this ranges from 1 to 3% of turnover or 19.20 billion USD to 57.60 billion USD. According to the BitRewards business model, commission on the platform aims for 1% or 192-576 million dollars in aggregate terms. Nevertheless, it is obvious that the loyalty programs market will not belong exclusively to BitRewards. Given that such giants as Amazon and Ozon are scaling their loyalty programs, BitRewards will have to win a place in this highly competitive market via a brutal fight. A detailed analysis of the competitive advantages of BitRewards is presented in the next paragraph.

4.2. Competitive Analysis

According to a study by Ozone, the creation of loyalty programs costs 15,000 USD upwards for an online store (excluding bonuses and shares). This figure includes the following:

● hiring additional employees (analyst, technical department, marketing teams) — 5000 – 8000 USD

● introduction of additional documentation — 3000 - 7000 USD ● creation of an online platform for the campaign — from 3000 – 30,000 USD ● warehousing— 2000 – 15,000 USD ● creating a delivery service — from 8,000 – 13,000 USD.

Time - from 6 months to 1 year to prepare.

According to BitRewards’ own estimates, annual costs for software for loyalty program retailers are about 20 billion USD. The Deloitte study «Making Blockchain Real for Customer Loyalty Rewards Programs» states that loyalty programs are extremely expensive from the point of view of development, implementation and support. In 2014, companies in the US spent a total of 2 billion USD.

As we have noted, the world's largest e-commerce platforms implement their own loyalty programs. The largest marketplaces offer their vendors the chance to create loyalty programs free of charge or on concessional terms.

Amazon is the pioneer of online trading and the largest international marketplace. Amazon has a unified loyalty program for all vendors, Amazon Prime. Annual subscription cost is 99 USD. The following benefits offered are listed on the program page:

● shipping within two days free of charge, ● Prime Instant Video - streaming unlimited video without charge ● Prime Music - unlimited music with no ads ● Prime Photos - unlimited cloud storage for photos ● early access to Amazon Lightning Deals and MyHabit.com, Amazon coupon

resources.

The program Amazon Prime is integrated with other discount programs from the retailer.

Ozon is Russia's largest online store. For regular customers the store has launched a loyalty program called Ozon Status. Guaranteed entry is via 3 purchases to the amount of 10 thousand rubles during the year. Participants in the loyalty program earn points (1 point equals 1 ruble) for each order on their birthday. You can use your bonus to pay for 25% of a purchase. Program participants receive a discount on shipping, additional guarantees and online invitations to exclusive sales. For vendors Ozon offers their Loyalica program. For 2000 vendors, the program is completely free. A more interesting approach is shown by eBay, the largest global marketplace. eBay offers a huge number of partner loyalty programs, most striking of which are the eBay Bucks program and eBay+. The eBay Bucks loyalty program enables one to receive 1% of purchases on eBay when paying with Paypal. For one purchase you can receive up to $100, but not more than $500 during any quarter. This loyalty program does not apply to ads, bars, real estate, gift cards, digital purchases, or heavy equipment for business and industry. Buyers get their earnings for the quarter after it ends. eBay+’s terms and conditions are reminiscent of Prime, the Amazon loyalty program. The cost of participating in the program is 15 to 20 Euros per year. For this fee customers can receive preferential treatment for the delivery and return of goods: guaranteed delivery before two o'clock the next day after N order, the refund of shipping costs if a return is made.

Accordingly, vendors are attracted to the largest online marketplaces first of all by the base of buyers. Blockchain technology will eventually become interesting to giants such as eBay. Nevertheless, given that 80% of online trade is concentrated on the largest platforms, the initial market for the BitRewards project is medium and small online stores, i.e. 3.8 to 11.5 billion USD. The potential income of all projects in this segment – 38 – 115 million dollars.

This segment also has a layer of competition.

The blockchain loyalty platform BioCoin is a payment system created by a farm cooperative, LavkaLavka. From a legal point of view BioCoins represent points in a loyalty system. They are awarded as bonuses when a customer purchases any product from a company that has joined the BioCoin platform. Cafes, restaurants, shops and other businesses can join BioCoin. Points received by a client can then be used to pay any other company which is also involved in the project. Coins can be spent not only on purchases at partner companies, they can also be traded on exchanges, because BioCoin is also a cryptocurrency. During the first round of their ICO, LavkaLavka collected 9 million USD, and BioCoins were admitted to circulation on several platforms.

Loyken is a decentralized platform for loyalty programs with a single ecosystem. Implemented based on a distributed blockchain network, the platform will enable businesses to create and manage coalition and cross-promotional mechanics in any loyalty programs, ensuring data security and a level of control over the process.

Orioncoin is a new platform built on blockchain, designed to solve the difficulties currently facing loyalty programs and at the same time to offer improved liquidity and availability in the cryptocurrency space. In addition to rewarding customers with ORC, Orioncoin also provides an easy way to move funds between fiat currencies and cryptocurrency, which adds liquidity and accessibility to an area of the economy which has not been liquid. Orioncoin offers a credit card for international use, and it plans to provide users with the ability to exchange and transfer coins to their Bank account.

GatCoin is another platform for discounts and also has a loyalty system. The GAT system enables merchants to issue tokens; tokens can be distributed via the private networks of the consortium and used for the redemption of tangible products and services from participating merchants.

In addition, Chinese UnionPay, in partnership with IBM, is developing a blockchain system for trading reward points; Royal Bank of Canada is exploring the possibility of creating a blockchain rewards program; Ribbit already has the world's first rewards program based on blockchain, and Blockpoint has established a mechanism that will enable one to create a loyalty platform.

Thus, despite the fact that some companies are at the top of the loyalty pyramid (Amazon, Costco), the BitRewards project definitely has its market and its competitive advantages, strongest of which is the successful operation of the parent company’s site, GIFTD, and its 500 to 1000 member companies.

5. Team

The project team originated from GIFTD, which has been operating in the rewards and loyalty software market for more than 5 years and has more than 500 customers comprising online stores. Further development of GIFTD will continue - the project will be complemented by BitRewards. The GIFTD project team has been significantly expanded with blockchain experts, marketers and lawyers. Also, a strong advisory board has been formed together with a team of project partners. Alex Egorov – CEO. Alex has 15 years of experience in Finance and investment banking; he has held top positions in the banking sector. In 2011 with the creation of his own company in the e-Commerce market he shifted his attention to the IT sector. Alex has extensive experience in management, finance and the technology sector. Alex is the founder of GIFTD.tech, which serves as the basis for BitRewards. Alexander Nevidimov - CTO, expert in blockchain and Big Data. An expert in the IT sector, his achievements include victories in the ACM ICPC/IOI championships, former team lead of a large bitcoin mining pool, 5 years of experience as CTO at GIFTD, 12 years of experience in software development. Andrey Kladov — Blockchain and mobile architecture. A specialist with 8 years of experience working with mobile applications, creator of dozens of mobile b2b and b2c applications, expert in Cocoa, Cocoa-Touch, Objective-C, Swift Language, Java and Android SDK. Vitaliy Makarenko – COO. Vitaliy is an expert in the field of sales organization and processes with experience of implementing strategic projects in Fortune 500 companies. Marat Arslanov – CMO. Marat has 6 years of experience in marketing companies in the digital sector. Marat works with loyalty program tools in the SaaS segment. Segey Alisov - Head of design. Segey has 10 years of experience creating design for mobile apps, web UX and UI. Ilya Starovoitov - Business Development. Ilya is the head of a sales team who have been able to build relationships with partners such as Leroy Merlin, Kenwood, GoPro, Ikea, Hoff and more than 300 corporate clients.

Slava Zytsar - Frontend engineer. More than 10 years of experience in frontend development, expert at Webpack Gulp, PHP, PostCSS, Sass, SVG, ES6, BEM. Dmitri Semenov - QA engineer. Expert with 6 years of experience in the field of software development, development applications for the web and mobile platforms. Max Litkevich - Technical support engineer. 4 years of experience in the field of technical support and analysis. Additionally, the project team includes 7 experienced engineer developers. The advisory board includes Artem Chestnov (founder of Latoken, a platform for tokenization of assets, CEO and COO at Reborn, experience in Fortune 500 companies (Inbev, Loreal), successfully launched 50 projects), Ivan Anichkov (expert with 20 years of experience in IT and business development, has provided invaluable services to the project for adaptation of collected business cases and use of CRM, LTV and Loyalty Management, Customer Interactions, Big data, Information Management, Predictive analytics and BI); Alexey Gritsyna (entrepreneur, expert in sales), John McNaughton (a famous investment banker with more than 25 years in business, experience with the largest banking organizations in the UK, Europe and USA), Greg Mann (a recognized expert in the field of sales and business development), Sergey Fradkov (an entrepreneur, the successful head of IT projects in blockchain with more than 25 years’ experience), Roman Yankovskiy (legal Advisor, partner in "Zartsyn, Yankovskiy and Partners"). In addition to the above advisors the project has enlisted the support of partners: Anton Soloviev - InSales (a project for the creation of online trading enterprises), Roman Gryanko - Assist (one of the largest payment systems for e-commerce), Sergey Sidorov - PromoSoundGroup.net, Ankit Talwar - DiscWallets.com Paul Ryazanov - MageCloud.net Victor Sadygov - Nika Estate. Overall, the team has the necessary expertise and knowledge to successfully accomplish the task. The team’s experience is entirely relevant to the industry and the potential market sector for BitRewards.

6. Token analysis

BIT is the internal currency of the project, used to carry out all transactions within the BitRewards ecosystem. Customers of online stores will receive BIT as reward (a certain configurable amount or percentage of purchases or referrals).

BIT is credited to a client’s automatically generated cryptocode, connected to the store via the plugin. BIT can be exchanged for goods and services from partner shops, exchanged for cryptocurrency. It is planned to implement a service for linking a crypto account to a Visa or MasterCard. Buyers and sellers can also buy BIT on the open market (e.g. exchanges) or via smart-contracts.

The mechanics of the tokenomy is as follows: the retailer will be able a) to sell goods for fiat and deposit cashback in BIT; b) to sell goods discounted from their fiat prices for BIT; c) to sell goods for BIT in general. Let's consider all the possibilities:

A. This is an advantageous situation for a tokenholder: A retailer is forced to buy tokens for fiat in order to pay cashback in said tokens. The more retailers participate and the higher the demand for their products, the more profitable it is to keep the tokens out of free circulation, which will provoke a rise in their price due to retailer demand.

B. The discount, as we understand it, would represent a reward equivalent to the market value of the BIT token. If a retailer is willing to sell an item for 90% of the price (i.e. offer a 10% discount), they can sell it for 85% of the price in fiat, and a 15% discount to fiat to sell for BIT tokens, the value of which is equivalent to 5% of the fiat value of the goods.

C. Selling the product for BIT, also at a discount relative to original fiat price.

Cases B and C are less helpful because the idea of retaining cryptocurrency for users is less advantageous in these cases. They will buy it in order to pay for goods with a discount, and retailers will be forced to sell it to finance their costs.

Thus, case A creates a demand for tokens, case C (and its variation, case B) creates an offer of tokens, thereby maintaining the liquidity of the instrument.

In addition to the token’s direct utility functionality, it is necessary to mention BitRewards’ DAO. Participation in BitRewards’ DAO will be confirmed not by the number of BIT tokens in an account, but by the size of transactions using BIT tokens. Among other things, the BitRewards DAO functionality provides BitRewards Foundation with asset management constituting 12% of the issued tokens and 10-20% of funding raised during the ICO.

We believe the concept of the BIT token in the BitRewards ecosystem to be successful, however, we would like to emphasize that the restriction of the functionality only to case A above would be more promising from the point of view of the future value of the token.

7. Analysis of factors affecting the future price of the token

According to the roadmap, an alpha-version of the service, a mobile app and crypto-wallet will appear in mid-2018. The team expects that 387 retailers will be using the platform’s services by the end of 2018, and by the end of 2019, this number will rise by almost five times – up to 1841 retailers. It is extremely difficult to predict the actual curve of the growth of the number of stores, a lot will depend on the quality of the final product and the BitRewards advertising campaign. BitRewards team is planning to spend about 16% of total expenditure on marketing activities. We believe that the utility demand for BIT tokens will continue to grow, but perhaps not as dynamically as specified in the documentation. However, for long-term crypto investors this quality cryptotoken should be of interest.

8. Investment risk analysis

The BitRewards project team has worked very carefully through risks for the project. In particular, a mechanism relieving customers (legal entities) of the problem of accounting for BIT tokens on their balance sheets. Thus, a common risk associated with legal entities' participation in the ecosystem is not an issue for the BitRewards project. The team does not specify expenditure in the documentation; however, we have had a chance to review internal documentation. There is a certain economic risk, depending on the dynamics of growth of the user base, that the project team will have to manage their own commission rate. In some periods this could reach 5% to ensure breakeven; this could slow down the expansion of the service. Otherwise the project appears to be very strong and worthy of a high investment rating.

The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication. Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud. We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.