ICO Analysis: Eloncity

Most people will agree that the world needs to move towards “clean energy” solutions. However, it’s been years since people have been saying that and nothing significant has been accomplished. People still turn to fossil fuels because of their cheap cost, regardless of any negative effects they may have on the environment.

Blockchain is being touted as a possible solution for all of this.

Eloncity is trying to bring blockchain to energy and power the world “virtually for free”.

As it stands, the modern, centralized power grid system by its nature is susceptible to point vulnerabilities (e.g. a natural disaster could lead to mass power outages) and high costs (due to inefficiencies like maintaining excess energy reserves).

Eloncity wants to decentralize the current energy structure into millions of self-sufficient renewable energy “microgrids” that would make clean energy locally available 24/7 and competitive with that supplied by centralized utility companies.

Eloncity’s approach is multifaceted:

  • A blockchain-based energy trading system will make energy trading more transparent and trustworthy (thus increasing peoples’ willingness to trade clean energy with each other), and an AI algorithm will help users find the best market prices
  • Using IoT technology, energy storage will be smart instead of kept in excess for no reason. The demands of local users will match supplies of locally produced clean energy, which will reduce storage inefficiencies and subsequently energy costs
  • A switching DC power bus will fix the “last mile” problem, where last mile networks that supply energy can get congested, removing peak energy load problems by allowing energy to flow freely to and from different parties
  • Support for direct current appliances – new appliances that use direct current (DC) eliminate redundant AC-DC-AC power conversions. Eloncity will support these appliances, which helps make locally produced renewable energy costs competitive to those of conventional energy
  • Proof of Stored Power (PoSp) mining scheme that will make energy storage systems investment-worthy financial assets

The project is highly technical and we recommend taking a look at the Eloncity whitepaper for a full overview.

Token

Eloncity will be powered by Eloncity Token (ECT), which will have a few key functions:

  1. Exchanging energy – ECT will be used as a medium of exchange for parties that wish to exchange energy with each other. Consumers provide extra energy to those on the network and earn ECT.
  2. Store of value – battery energy storage systems (BESS) need to reserve ECT equivalent to their electricity capacity value. Thus, ECT is backed by the value of electricity in the Eloncity ecosystem.
  3. “Mining” rewards – BESS, which can be thought of as mining nodes or proof of stake nodes in the Eloncity ecosystem, will be rewarded with ECT for storing renewable energy

The total amount of ECT is 1 billion ECT.

32% will be for the token sale, 32% for “mining” rewards, 7.5% for the team, 14.5% for ELONCITYLab, and 14% for marketing.

Of the 1 billion ECT, 320 million will be sold during the token sale (private and public phases combined).

Eloncity’s token sale will be handled by Tokeneed.

Soft cap is $10m and hard cap is $33m.

Team

Founder Andy Li – led Alibaba’s Cloud Computing Data Center Architecture Team in pioneering direct current power system application to mega data centers in Asia. Since 2014, he has been leading the company POMCube in developing intelligent networked battery energy storage systems.

Advisors

Howard Choy – led Los Angeles County’s Office of Sustainability in developing both energy and environmental programs for the Los Angeles region. The Office of Sustainability manages the county’s $200m annual energy budget for energy efficiency programs, internal operations, and power generation facilities

Enso Li – chief architect for Tencent Data Center with heavy experience in 240v high-voltage direct current, data center practices, modular data centers, lithium batteries, and rack servers.

Michael Yuan – software development expert with multiple published books as well as code commits to high-profile open-source projects like Firefox, Fedora, and JBoss, to name a few.

Partners include Krypital Group – a blockchain marketing services firm that worked on projects like Arcblock and CyberMiles, both of which did pretty well.

Verdict

Below is a breakdown of the risks and opportunities associated with the project.

Risks

  • Private sale allocation a bit lopsided relative to public sale allocation ($19m vs. $8m) but 9 month vesting period for private investors helps balance this. (-0.5)
  • Maximum contribution for private sale investors unspecified. (-0.5)

Growth Potential

  • The team has a lot of relevant industry experience, which is probably even more important in a high barrier to entry industry, such as energy. (+3)
  • Maximum contribution for public sale investors capped at 3 ETH. Combined with the fact that there seems to be no lockup or vesting for public investors, this can help prevent immediate dumps after exchange listing. (+0.5)
  • The Telegram group has been seeing decent growth, signaling some form of investor interest (according to this tool). (+0.5)
  • Similar ICOs like WePower and Power Ledger did well (Power Ledger did very well at one point). (+0.5)
  • Partner Krypital Group has helped other ICOs like Arcblock and CyberMiles do well. (+0.5)

Verdict

It’s not easy finding great ICOs in the current market, but Eloncity could be worth keeping an eye on while public sale details are announced thanks to things like a decent team, long vesting period for private investors, reasonable maximum contribution for public investors, growing social media interest, similar ICOs that have good track records, and a good marketing team. Eloncity receives a 5/10.

Investment Details

  • Type: ERC20 – Utility
  • Symbol: ECT
  • Platform: Ethereum
  • Crowdsale: TBA
  • Minimum Investment: 0.1 ETH
  • Price: Unspecified (Crowdsale)
  • Hard Cap: $33 million
  • Payments Accepted: ETH
  • Restricted from Participating: USA, China, New Zealand, and anyone who is a citizen or resident in a geographic area sanctioned by the USA as well as anyone subject to USA and/or United Nations sanctions

For More Information

Featured image courtesy of Shutterstock.