ICO Analysis: Industry Token
The team behind Industry Token (INDST) wants to create a way for hospitality, service, and travel merchants to transact while eliminating typical industry downsides like fraud and transaction fees. Low volatility will be another feature of Industry Tokens as volatility is an issue that plagues current cryptocurrencies and tokens.
The inherent nature of blockchain technology will allow for lower chance of fraud than traditional payment methods as well as give consumers the ability to privatize transactions so that consumers can own their data unless they permit sharing of it with marketers and vendors.
Here is a more detailed list of some problems that merchants in the aforementioned industries face and how Industry Token aims to solve them (in bold):
- Fears of accepting cryptocurrency due to market volatility
- Guaranteed merchant accounts – transactions accepted by merchants will have a fiat currency value that is determined by the market rate of the tokens at time of transaction. This fiat currency value is maintained until merchants cash out to a fiat currency, protecting against volatility in token price (merchants can also opt for a market value account to take advantage of any potential gains in market rate of transacted tokens)
- Bank interchange fees for debit and credit cards – anywhere from .8% to 5% or more
- 1.5% transaction fee (+0.5% to offer rewards program to customers)
- Chargebacks – companies with chargebacks are guilty until proven innocent and have to deal with chargeback fees, use of labor to research chargeback claims, or even taking a full loss for the amount of the fraudulent transaction
- No risk of fraud or chargebacks
- Payment Card Industry (PCI) compliance – fines up to $500,000 and potential loss of ability to take credit cards
- No PCI compliance risk
Here are some consumer problems and solutions to them that Industry Token will offer.
- Privacy and data security – consumer transaction data is sold so that consumers can be retargeted with ads for past purchases, and data can be stolen in the process
- Consumers opt-in to share data (resulting in revenue share depending on how much data is shared) and no risk of stolen payment information
- Tip fraud
- Elimination of fraudulent tip adjustments
- Currency exchange and foreign transaction fees
- No currency exchange or foreign transaction fees
- No simple way for rewards redemption
- Tiered rewards system
The Industry Token team sees Industry Token as being potentially helpful for businesses and organizations, such as restaurants, bars, nightclubs, hotels, casinos, stadiums, festivals, tourism boards, and entertainment venues.
For more details, take a look at Industry Token’s whitepaper.
The team aims to incentivize use of INDST by providing better rewards and redemption methods than those currently available thanks to the team’s relationships with hospitality and travel vendors.
The Industry Token consensus mechanism will be Proof of Stake, which will incentivize users of Industry Token to hold Industry tokens as well so that they can potentially earn block rewards.
Besides the above, other aspects of the INDST token economy haven’t been highlighted (other than paying for hospitality, service, and travel goods and services from participating merchants).
There will be 1 billion total INDST, with 450 million (45%) sold in the token sale. The rest of the token distribution is as follows.
- 20% team reserve
- 10% guaranteed merchant reserve
- 9.8% advisors reserve
- 5% rewards reserve
- 5% consumer reserve
- 5% credit program reserve
- 0.2% airdrop
Proceeds from the token sale will be used for technology development (40%), sales/marketing/community development (35%), legal (10%), and special projects (15%).
Team and advisor tokens have a 2-year vesting schedule.
The project is currently having a family and friends round; interested investors should email CEO Varun Villait at [email protected].
The team behind Industry Token runs Industry, a community for hospitality professionals in the United States to find jobs, network, and connect with one another.
The Industry team has relationships with relevant companies and organizations in the space like Cohn Restaurant Group, Caesars Entertainment, Hakkasan, tendergreens, Karl Strauss Brewing Company, True Food kitchen, FRC, Topgolf, The Cheesecake Factory, Apple, Centerplate, and more.
Advisors include individuals both in the hospitality and cryptocurrency spaces:
Oliver Kremer – owner of Dos Toros, a popular NYC-based burrito chain
Adam Koral, managing partner of The h.wood Group, a Los Angeles-based lifestyle group (nightlife, private events, etc.) that did $35m in revenue in 2016
Justin Wu – head of growth at Coincircle, which helps established companies come up with crypto token offerings
Below is a breakdown of the risks and growth potential of Industry Token.
- Is this project really necessary? What’s to stop users from using other, more established cryptocurrencies, if cryptocurrency takes off in hospitality, service, and travel? (-1)
- Very early (private round) but low hype thus far (-0.5)
- High hard cap for what they are building (-0.5)
- Example of how Industry Token would work (Section 7e) seems pretty complicated (-0.5)
- The team has relevant experience (+3)
- Relevant advisors and industry relationships (+2)
- Working with the SEC to make their offering regulatory-compliant (Section 13 of whitepaper) (+2)
- Industry Token is aiming to improve the various inefficiencies in some of the world’s most popular (but inefficient industries) and have a team and advisory board that seem capable. Plus, they are working to be an SEC-compliant offering, which may give US-based investors in particular some relief. However, lack of a real use case, high hard cap, and lack of hype (for now) make investing in this ICO questionable.
- Industry Token receives a 5.5/10
- Type: ERC20 – Security (eventually migration to native blockchain)
- Symbol: INDST
- Platform: Ethereum (then native)
- Crowdsale: TBA
- Minimum Investment: $100 USD
- Price: 1 INDST = $0.15
- Hard Cap: $41.6m
- Payments Accepted: BTC, ETH, LTC, USD (credit card and wire)
- Restricted from Participating: Unspecified
Featured image courtesy of Shutterstock.