WePower ICO Review – Blockchain Based Green Energy Trading Platform - Crush Crypto

WePower ICO Review – Blockchain Based Green Energy Trading Platform

Summary

  • Project name: WePower
  • Token symbol: WPR
  • Website: https://wepower.network/
  • White paper: https://drive.google.com/file/d/0B_OW_EddXO5RWWFVQjJGZXpQT3c/view
  • Hard cap: $40 Million for 62% of total tokens
  • Conversion rate: 1 ETH = 4,000 WPR
  • Maximum market cap at ICO on a fully diluted basis: $65 million
  • Bonus structure: 1 ETH = 4,600 WPR until soft cap is reached ($5 Million)
  • Presale or white list: Closed but WePower will reserves 1,000 randomly selected slots, read more here
  • ERC-20 Token: Yes
  • Countries excluded: USA
  • Timeline: Token sale begins February 1, 2018, will last 14 days
    (Please refer to WePower’s website for the most up to date information)
  • Token distribution date: When hard cap is reached or token sale ends
Video summary (video is 8:01 long):

Project Overview

What does the company/project do?

WePower is proposing a blockchain based green energy trading platform that directly connects producers to consumers.

The most important mechanism of WePower’s platform is allowing producers to tokenize the clean energy they create. These tokens (different from WPR) will represent 1 kWh of energy to be produced in the future and are a contract between the producer and consumer.

Through this tokenization of renewable energy, WePower aims to allow renewable energy producers to pre-sell their production on a global scale and obtain necessary capital to increase their profitability.

This will tackle a huge issue in today’s clean energy markets, as the unique regulatory framework in Europe keeps competition high and does not provide a market for open connection to the energy grid.

As a result, the investment ecosystem for global renewable energy will be simplified and open to more consumers. Investors will also benefit from better energy investment terms (lower costs & higher liquidity) as well as access to clean energy projects worldwide, making green energy a more appealing asset class.

The WePower platform hopes to take advantage of the fact that the percentage of renewable energy in the world will go from 24% today towards 100% over time, accounting for most of the $11.5 trillion world energy use. It is unclear how long this will take, but WePower aims to speed up adoption of clean energy while growing its platform and connecting more consumers with producers worldwide.

How advanced is the project?

WePower was launched in January of 2017, and secured a 1,000 MW project pipeline in July 2017. From there, they launched an MVP in August, then signed a deal for grid integration and had 14 energy engineers join the project in September.

Currently, the team is working towards a platform launch in March 2018 and a country-wide energy tokenization test in Estonia for April 2018. They are also working on connecting WePower with their first clients in Spain, hoping to do more testing of the platform in September before a full launch in Spain planned for November.

After launching in Spain, the team is planning to launch their tokenized energy model in Portugal and Germany at the end of 2018.

If everything is still on schedule at this point, they plan on focusing on regulation in January 2019 and virtual power plant structure in March 2019. From there, the goal will be to expand further and make an impact on as many energy markets as possible.

Currently, there are 3 energy producers planning to use WePower and connect over 1000 MW of solar energy to the platform: Conquista Solar, Civitas Projects and Novocorex.

WePower has blockchain related partnerships with Bancor, TokenLot, Bitcoin Suisse, AmaZix, and Kr Token. They also have technology partnerships with Catapult, Wings, Metasite, Blockchain Labs, and Finpass.

What are the tokens used for and how can token value appreciate?

WePower has a 2 token system (WPR token and energy token worth of 1 kwh). With WPR token holder will be able to receive 0.9% of energy tokens produced by renewable plants. 1 energy token equals to 1 kwh.

Holders of the WPR token will receive 48 hours priority access to participate in auctions for purchasing this tokenized energy once renewable energy plants are connected to the platform. Each plant will set the minimum price per token, and both historical and current energy prices will be visible on the platform to ensure a fair auction.

In addition, WPR token holders are entitled to no less than 0.9% of tokenized energy donated directly by the renewable energy providers. The token holders have the option to use this energy, sell it before its production, or sell it to the wholesale market when it is produced.

The WPR token model is designed to provide intrinsic value to investors in the form of energy. As the platform grows and sees more clean energy producers sign up, WPR holders will be entitled to more energy over time, which should drive demand for WPR upwards.

WePower diagram

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Team

WePower network was founded in January of 2017. The WPR token launch and platform creation are their first major projects as a company, and they have already secured $3 million in funding during the pre-sale. They currently have 15-20 employees and a group of advisors that have expertise in fields such as blockchain, energy, AI, and more.

The biographies for key team members are listed below:

Nikolaj Martyniuk, Co-Founder & CEO – background in international renewable energy development ranging from plant construction to energy sales through independent energy suppliers. He is responsible for overall strategy and business development for WePower. He is also a founding partner of the Smart Energy Fund.

Arturas Asakavicius, Co-Founder – background in regulation and fintech. He has led a team of lawyers responsible for all Fintech, blockchain, and cryptocurrency related business/regulation at the law firm Sorainen for the past 5 years. He is chairman of the Lithuanian Fintech Association and recognized as a Lithuanian Crowdfunding Patron by the EU Commission. Arturas is focused on investor relations and the legal aspects of WePower.

Kaspar Kaarlep, CTO – previously the CTO of a large national DSO, and has worked on green energy integration from different angles for 7 years. He was responsible for the DSO strategic plan and their Smart Grid technology roadmap along with management of the IT architecture.

Some of the advisors for WePower include Jon Matonis, Chairman of Globitex, a cryptocurrency exchange platform, David Allen Cohen, Chairman of Dcntral, a blockchain based cybersecurity company, Nimrod Lehavi, CEO of Simplex, and more.

WePower is also supported by the Ministry of Energy of the Republic of Lithuania.


Opportunities

  • The team is able to secure a number of solid companies agreeing to work with WePower, which helps creating supply when the platform is launched and demonstrates the team’s capabilities.
  • This project demonstrates what blockchain can do and shows an innovative way to tokenize assets – in this case, energy. 
  • From the tokenization of energy, energy construction projects can save on fundraising costs and are able to improve the return on equity, thus they can provide more affordable energy.

Concerns

  • The energy sector is highly regulated and the landscape is different in each country. It may be difficult for different companies/governments to get on board with the idea of sharing one platform.
  • Even if the project successfully hits its own growth project (which is usually on the optimistic and aggressive side), the risk-adjusted return is not high. If we apply a 25% discount rate for the energy received as stated in page 11 of the white paper and assuming ether price is $1,000, the total return on the 10 ETH investment over a 6-year period is 67%, or a compound annual growth rate of 9%. This is considered low for a cryptocurrency investment.

Conclusion

Overall, we like the short-term potential but are neutral about its long-term potential for this ICO. Our thoughts of the tokens for short term and long term are as follows:

For ​short-term holding

Good. The team, idea, bonus structure, and market awareness are all above average. We believe it should do well as long as the current correction is not protracted.

For long-term holding

Neutral. Even using the company’s own growth project, the return of tokens from the 0.9% donation is unattractive. We like the idea of the project, but unless WePower's clients tokenize a much higher portion of their energy than projected, we don’t think holding WPR tokens for the 0.9% donation is worth it.


For more information about the ICO, please visit the following links:

* The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions.

This article is contributed by Victor Lai with the help of our intern Kieran O'Day.

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