Suncontract (SNC) ICO - Review
Suncontract will issue SNC tokens less than a day from now. The company aims to build a marketplace for peer to peer electric energy transactions.
They argue that currently the energy market is facing challenges because the conventional distribution power scheme incurs in high transmission costs for long distances, and that model is not sustainable.
Their whitepaper shows the renewal energies growth (both real and projected), and argue that renewal energy is produced closer to the sites of consumption and in a more decentralized manner than the previous model. also, they present several arguments about why electricity demand will increase over the next years.
They present the following statistic:
On average, only one third of the retail electricity price is on the
energy itself, the rest are different charges that increase your bill, such
as; distribution charge, customer charge, state tax adjustment charge, consumer education charge and some others.
Although, they do not state its source.
The company believes it can replace the middle man in the above described relationship with blockchain techonology, thus lowering energy prices. They state that the crypto transaction is way faster and cheaper than transacting through lawyers.
Their modus operandi consists of registered producers offering their electricity to the pool (instead of selling it to big trading companies, and consumers purchasing it directly from the pool.
Token Value Proposal
The token will be used to buy electricity from the pool. Thus, it is not an equity-like token and will only increase value as demand grows.
Team
Their CEO and CFO do in fact seem to have large experience in electricity. But as it turns out, the rest of their team, specially the technology specialists, are not on LinkedIn. I can't verify their technological skills. Down vote
Technology
The company has published their smart contract on Github, so everyone can review it. Up vote
Comments
First of all, they say it is a new business model. Using a blockchain might be new, but replacing the middleman, in this case, is absolutely not new. Many big players try to do it, Schneider Electric is just one example. So it is not as if they won't face competition, their competition has been out there for years now.
Specially important though, is the fact that they say that trust is not needed because the blockchain will create a trustless network. What bothers me is that they do not produce any comments on how the electricity will be distributed. It is hard to believe that electricity, in a near future, will be delievered via smart contracts. That being so, the network won't run entirely on blockchain thus not being trustless per se.
Conclusion
All things considered, I won't be joining this ICO. The lack of information on their team (specifically LinkedIn profiles) and the fact that they do not bother giving us any idea about electricity distribution makes me believe they do not have a full plan but wanted to be the first one out there to benefit from the current ICO fever. As an investor, I can't verify that they are well-prepared for the challenge and I rather wait to see some kind of competitor launching an ICO, hoping I'll be able to verify them.
I do not advise you to take my word for granted. It is always worth conducting your own analysis. We started producing a series of posts on ICO Valuation and a post on ICO Resources to help all of you to come up with your own ICO analysis.
Comments and feedbacks are always welcome !
Cheers