Important Dates: Jan 29, 2018 – Crowdsale
Number of Tokens: 500 Million tokens
Cap: $15 Million
Token Type: ERC-20 token built on the Ethereum blockchain
Token Symbol: BEE
What is Bee Token?
Bee Token is a home sharing platform built on the blockchain, similar to what AirBnB already provides. The network consists of the following
- A secure payment system that allows two users to send and receive money that gets held in Bee Tokens until after a successful exchange of services between the two users. An example of this could be someone renting a room in their home.
- A decentralized arbitration system that resolves user disputes, providing positive incentives to grow a network of genuine arbiters and negative incentives to deter scammers.
- A reputation system that couples a valid identity, which is obtained by a trusted digital fingerprint protocol on the Ethereum blockchain, with a rating determined by transparent, immutable review and scoring interchange between users (such as guests and hosts).
What is the problem Bee Token wants to solve?
According to Bee Token’s whitepaper, current home sharing platforms have the following problems:
Aligning Incentives: The Whitepaper cites the example of Uber as a company where incentives are misaligned. Uber drivers only want to earn money. They don’t have loyalty towards the company. However, to participate in the Bee Token platform, tokens will need to be used and held. This incentivises users to support and promote the company, as a rising token price is beneficial for all.
Lower Transaction Fees: In platforms such as AirBnB, fees are high for both hosts and renters. Bee Token’s platform would be practically free for users who choose to use the BEE token to pay. Users who pay with fiat would be charged a fee.
Increased Security and Trust: On platforms like AirBnB and Uber there is always a concern that people using the platform are not trustworthy. For example, an Uber driver will take a long route, or an AirBnB accommodation will not be as advertised. While firms have come up with reputation systems to tackle this issue, they are not foolproof and result in problems. By putting KYC and reviews on the blockchain, they become immutable and thus enhance trust.
What is Bee Token’s Business Plan?
Unlike many ICOs, Bee Token has a good section of its whitepaper dedicated to business strategy. In order to attract customers, they plan to focus on the crypto community as well as creating a referral program. They also note that the short term rental market is likely to grow in the future, thus leaving enough space for new entrants in to the market.
Bee Token would earn revenue from fees from users who do not pay with Bee Tokens. There would be a 1% commission for users of other cryptocurrencies and a 3% commission for those who pay with fiat currency.
ICO
The ICO is scheduled to be held on Jan 29th. At that point 150 million tokens will be sold to the public. There is currently whitelisting going on at the Bee Token website, with a higher allocation for users who can prove they use AirBnB.
Ensuring that the team is incentivised to complete their project and not run away with money is critical for a project that holds an ICO. In the case of Bee Token, tokens allocated to the team will be locked up as long as 24 months after the ICO. During that 24 month period, token will gradually be unlocked.
The token economics of this project are quite reasonable. The team will only hold 15% of tokens, which will be vested gradually over 24 months. I am unclear about what the ‘company reserve’ is , but presumably these could be sold at a later date in case more money needed to be raised.
Token Utility
The Bee Token acts as a payment method for users of the platform. In addition, arbiters who help resolve disputes will stake their tokens in order to participate.
The Team
The team is very impressive and is staffed by people with experience at various start-ups as well as tech companies such as Facebook. The CEO, Jonathan Chou, used to work at Uber and Grindr.
Advisors include Richard Ma (the CEO of Quantstamp) and Can Kisagun of Enigma.
Hype
Bee Token has 35000 people in its Telegram channel. This is the highest I have ever seen for an ICO.
Competition
AirBnB: AirBnB is the biggest company that caters to sharing homes and is the prime competitor for Bee Token.
Hotels: Along with AirBnB, hotels are a natural competitor of Bee Token.
Risks
Competition: AirBnB already has a strong platform that everyone uses. It will be very difficult for Bee token to break AirBnB’s dominance, especially in an industry that benefits from network effects. However, the strategy of initially focusing on the crypto user market is a good one, and could lead to a small loyal user base that can be built up over time.
Scaling: The whitepaper claims that ‘a small fee’ will be charged for Bee Token transactions. However, this is currently not possible on the Ethereum Network due to congestion. Fees will be a lot higher unless a scaling solution can be developed. The high fees could damage the profitability of Bee Token’s business model.
Scores
Fundamental Indicators
Concept: 4
While Bee Token is clearly modelled on AirBnB, its overall premise is more attractive to users than AirBnB. Lower fees and increased security and trust give Bee Token a winning concept.
Token Utility: 4
While using a token as payment is nothing special, the staking utility for arbiters is interesting and is a good use case for how tokens can be used to create incentives.
Status: 3
The BeeNest alpha is scheduled to go live by the end of Q2 and the platform will be launched formally by the end of the year. This is a good start to the project.
Team: 4
The team has a lot of experience veterans from Silicon Valley as well as strong advisors.
Competition: 3
There is pretty fierce competition in this space, but there is still room for entry given the industry growth.
Strategy: 5
Bee Token has a strong, well-thought out strategy that is more than what most ICOs provide in their whitepapers.
Technical Indicators
Market Cap: 4
The $15 million market cap is quite low and provides room for token price growth.
Token Incentives: 4
There is a decent vesting schedule for the team and they will only be holding 15% of all tokens. This is a good incentive for the team to ensure that they keep token prices up.
Hype: 5
The hype for this ICO is off the charts. There are a huge number of people in the telegram channel and the pre-sale has already sold out.
Investment Horizon
Short Term: Good. This project has a tremendous amount of buzz and has a strong team. The only clouds on the short term horizon are the state of the market. ICOs releasing into a bear market tend not to do very well initially (e.g. Enigma, Request among others), and the recent crash could indicate the start of a weak market.
Long Term: The long term perspective is more neutral. There is already a significant amount of competition in the home sharing space from AirBnB and competitors will need to benefit from network effects in order to succeed. Nevertheless, the teams strategy is well-thought out and could lead them to success.
Conclusion
I think Bee Token is a fantastic project that really stands out among ICOs. As long as market sentiment is strong, Bee Token should do well out of the gate. However, investors should be aware that it will still be very difficult for Bee Token to break into this very competitive market.
Overall Score: 4.1
