MyShell Research Report
This analysis reflects the personal opinion of the author (https://www.linkedin.com/in/stanislavrossolenko/ & https://twitter.com/stanislav_ro) and should not be construed as investment advice.
Analysis structure
Project Description
MyShell https://myshell.ai/ — is a decentralized comprehensive platform for creating, deploying, and hosting AI-powered Web3 chatbots with their own language models and modular construction. The platform enables users to create, share, and monetize chatbots, each with a unique voice, memory, and conversational style. We've grown somewhat weary of AI projects that simply append "AI" to any existing word. Nevertheless, the field of artificial intelligence remains highly relevant, with the AI market currently valued at $208 billion and projected to increase to $1.8 trillion by 2030. The chatbot market was worth $17.7 billion in 2020, and it's forecasted to reach $102.29 billion by 2026. That sounds very enticing, doesn't it?
We can see the rapid development of chatbots, especially on platforms like Telegram. Telegram is the most popular messenger in the CIS, with over 800 million global users. Furthermore, Telegram's founder, Pavel Durov, is clearly moving toward Web3. For example, in September 2023, at the Token 2049 conference in Singapore, the TON company announced its upcoming integration with Telegram, making TON the official in-app payment coin for Telegram. For those unfamiliar, TON is a top-10 coin according to CoinMarketCap, with a market capitalization exceeding $7 billion. Currently, the creation of Telegram bots is highly popular. You can quickly and easily create your own bot with just a desire to understand the creation process and a few hours of free time. This brings me to the point that the quick creation of your AI-based bot is in high demand. MyShell essentially offers the opportunity for fast creation of your own bots, similar to Telegram chatbots or trading bots in VELES. On the website, you can already test several bots and create your own; you can find instructions in the project's Whitepaper https://docs.myshell.ai/.
I tested an English language learning bot here https://app.myshell.ai/chat, and it works fine, even cracking a few not-so-funny jokes. During testing, I had a sense of déjà vu. It reminded me of my experience testing ChatGPT, which I also used as an English teacher. So, I'm not quite sure why I would pay to use MyShell for learning English when I can do the same for free with ChatGPT. Yes, the app is currently in beta, and all features are free, but this will only be the case until the token is released, and the token will be 100%. The utility token will be used to pay for platform services, promote your applications, and more.
Why would I need MyShell if I want to create a chatbot for Telegram? First, I won't be able to upload it to Telegram, and second, there are websites where I can create a bot for free. Of course, Telegram bots and language learning bots are quite specific, but let's consider other examples. I can create and use bots only on the MyShell website, which immediately rules out all other websites and companies that need a bot. I'll add one more point; I don't have much faith in the long-term viability of this project because I don't see any barriers for major AI developers like OpenAI, Tesla, Meta, Amazon, etc., to easily make minor adjustments and offer a similar product, or even a better one. Conceptually, what's stopping a company like OpenAI, which developed ChatGPT and created a hype around AI technology in December 2022, from adding voice to their product? What's stopping them from creating a website for easily building your own bots, with the option to integrate them into your site or project and charge a monthly rental fee? These companies have all the resources and capabilities. For example, OpenAI's market capitalization as of October 2023 is approaching $80 billion, with annual revenue nearing $1 billion, and Microsoft is their main investor.
One more recent piece of AI-related news: Alphabet, Google's parent company, has agreed to invest up to $2 billion in the startup Anthropic, an AI company founded by former OpenAI employees. While MyShell might not be needed right now, I'm confident that if one of the mentioned companies were to announce they are launching a website where users can create their own bots in five minutes, it would spell the end for all projects like MyShell. Their only advantage would be the ability to pay in crypto (but this is also in the process of being legalized and regulated, and we may see new possibilities for crypto payments in the near future).
In summary, is the idea of the MyShell project good and in demand? Absolutely! Can MyShell provide returns to its investors? Maybe. Will MyShell become the next unicorn? No.
Partners
On October 16, the project raised $5.6 million in investments, with a valuation of $57 million. https://cryptorank.io/ru/ico/myshell#funding-rounds
Most of the investments come from tier 3-level funds, but there are also tier 4 and tier 5 investors. Of note is Signum Capital, which has invested in projects such as Fantom, Kyber Network, VEGA, Pendle, and Poolkastarter. Despite a strong track record of investments in significant projects in the past, they currently have little to boast about, although they continue to invest frequently. Overall, they are currently assigned a tier 3 rating.
HashKey Capital, a tier 1 fund known for projects like Polkadot, Avalanche, Cosmos, 1inch, and dYdX, did not become the lead investor in this case. Instead, that honor went to INCE Capital, a tier 4 fund. INCE Capital has no successful cases in its portfolio.
On the positive side, the project was selected for incubation by Binance's venture division, which is good news. While this doesn't solve all the previously mentioned downsides, it will definitely be a plus for the project and its future development. Binance's incubation can assist with both project development and marketing, providing valuable contacts. Additionally, there's the possibility of listing on Binance, which could give the token a boost just by being listed on the exchange.
In conclusion, the project receives incubation from Binance with a potential listing, investments from mediocre and unremarkable funds, and a few funds that made good investments in the early days of DeFi.
Tokenomics
For investors, 15% of the tokens are allocated. Based on the $57 million valuation and a total supply of 1,000,000,000 tokens, we can calculate that 10% were sold in the initial investment stage. Therefore, I assume there will be at least one more investment round. I'm not certain that participating in it would be a good idea, as the unlocking conditions for investors are the same, but the round valuations will be different. Perhaps the project team will adjust the tokenomics, but as of now, this is the situation.
The team, including advisors, is allocated 20% of the tokens, and this allocation seems reasonable. The vesting period for the team is set at 6 years, which is also favorable. Overall, the tokenomics appear to be in good shape. However, it would be helpful to know the vesting schedule for advisors, and it's not entirely clear how many tokens are allocated for rewards versus ecosystem development, as these two categories are combined into one, representing 20%. Ideally, they would allocate no more than 10% for the ecosystem.
Team
The project team is not mentioned anywhere. In the project documents, you can only find information that the MyShell research group consists of experienced entrepreneurs in the field of artificial intelligence and renowned AI researchers from prestigious institutions such as the Massachusetts Institute of Technology, Princeton, and Oxford. On LinkedIn, I was able to find only a backend developer who worked for over three years at ByteDance, a large Chinese company that developed TikTok https://www.linkedin.com/in/boynchan/
In our case, there is no information about the project team. There are indeed examples of projects created by anonymous teams, such as The Bored Ape Yacht Club and Shiba Inu. However, these are more exceptions, and it's worth noting that during the release of these projects, many projects were highly profitable. Personally, I consider an anonymous team to be a disadvantage.
Visual part
Personally, I like the color scheme used on the project's website. The website itself is very intuitively understandable, and all the information is easily accessible. It would be beneficial to add information about the project's team, but this pertains more to content than to the visual design.
Social media
The project has a Telegram channel, but it's inactive. The project's Discord channel has 20,000 members, and there's active discussion, mainly related to beta testing. On Twitter, there are 33,000 followers. TwitterScore and TwitterScout slightly differ in their project assessments, so it's better to focus on the number of followers. Among the followers, apart from project funds and their employees, there is an influencer, @mcuban, with a TwitterScore rating of 1000 (which is very high), and Alex Atallah, the co-founder of OpenSea. Unfortunately, interesting followers end here.
Information from the service https://socialblade.com/twitter/user/myshell_ai shows that 24,500 followers have joined in the last 30 days. This appears to be a clear case of inflating the follower count, especially considering that the Twitter account was created earlier this year.
Despite the community's activity on Discord, Twitter engagement is not at a high level. However, the project is in its very early stages, and in general, this is acceptable.
Conclusion
In conclusion, it can be said that the project does not appear attractive for investment. The absence of significant investors and the complete lack of information about the team played a decisive role in this assessment. You can monitor the project, and as an option, consider buying tokens on the Binance Launchpad if the project conducts effective marketing. There is a chance that this could happen within the framework of Binance's incubation program. The investment risk is high.