ICO Analysis: Sandblock

Consumers are big fans of loyalty programs. Whether it’s frequent flier miles, a latte, hotel stay, a pizza or something else, loyalty points have become an increasingly popular choice in the competitive toolbox of industry leaders. Customer loyalty even has its own month named for it, and it’s April.

But in a day and age where cyber threats run rampant and data and privacy are paramount, e.g. the Facebook/Cambridge Analytica scandal, consumers have become less inclined to share their personal data with anyone. Meanwhile, businesses continue to invest in attracting new customers in what often proves to be a futile attempt at customer engagement.

Paris-based Sandblock is a project designed to tokenize a customer’s brand, including but not limited to loyalty points. The blockchain startup isn’t the first one to take on rewards programs, but they put a unique spin on it. The Sandblock ecosystem is fueled by the Satisfaction (SAT) token on which individual brands create their own tokens that carry a value comprised of coupons, vouchers, etc., making them tradeable.

Businesses use these tokens to reward customers for certain behaviors, such as loyalty, providing reviews or marketing. Consumers can then trade these branded tokens globally for other branded tokens that are on the platform, giving companies a way to expand their user base. Companies still get to collect data on their customers, but it’s anonymized information, giving customers greater confidence that their personal data won’t be exposed in a security breach.

Perhaps the most differentiating factor for Sandblock from its competitors is that it already has an established group of partner firms across market niches, a list that continues to grow. For instance, in mid-April, they signed peer-to-peer decentralized market lender ETHLend.

Token

The Satisfaction (SAT) token is ERC20 compatible and built on the Ethereum blockchain. While the SAT token is ERC20, the branded tokens that are built on top of the SAT tokens are not. SAT tokens can be traded on exchanges while the branded tokens are limited for trade on the Sandblock ecosystem.

Sandblock characterizes it as a “utility” token. France, where Sandblock is registered, has turned a corner on the cryptocurrency market and has been welcoming innovation, including ICOs. But they have yet to develop a regulatory framework for new tokens, including whether they should be classified as securities.

Sandblock has assigned a hard cap of USD 8 million for its ICO at an exchange rate of 1 ETH = 3,000 SAT tokens. They accept Ethreum, bitcoin and bank cards, including Visa and Mastercard, as payment methods. The pre-sale is already 100% sold-out, suggesting there is great demand for the Sandblock project. The public crowdsale is scheduled for mid-May.

Merchant and other partners are incentivized to join the Sandblock platform sooner than later, as the cost for doing so rises as the number of SAT tokens are depleted.

Sandblock has capped the number of tokens at 55 million. Half of them will be offered for sale during the token generating event.

Source: Sandblock

The TGE will be split into four separate tiers, and any unsold tokens resulting from each tier will be burnt. Following the crowdsale, the number of SAT tokens will be fixed and unalterable. The rate for the SAT token decreases in each phase of the public crowdsale.

Source: Sandblock

The budget allocation isn’t bad, but there’s always a risk when a significant percentage of the fundraising will go toward development. In the case of Sandblock, the pre-ICO is a good indication they will raise the funds they require for product development.

Source: Sandblock

Team

Sandblock is a young startup that was only founded in 2017. They feature an eight-person management team on the website as well as a group of strategic advisers, who have an impressive track record for advising successful ICOs.

Sarah-Diane Eck is the founder of Sandblock and face of the brand as head of marketing. She holds a “triple masters degree from the business school HEC, the engineering school AgroParisTech and the law university Panthéon-Assas (International Tax Law),” according to her biography. She also leads a French crypto-fueled charity where she is helping to shape the tax treatment of cryptocurrency donations.

Fabrice Bascoulergue is a product lead at Sandblock and is also the co-founder of a company called Flashgap. He’s had experience with the development of mobile apps for more than 1 million users, so that should come in handy with the development of the Sandblock mobile app for iOS and Android. Jeremy Grenier is also on the engineering team.

Verdict

The Sandblock project has the potential to resonate with consumers, given its focus on rewards programs as well as the anonymity of personal information. Major businesses have invested in successful loyalty rewards programs off- chain, and as more companies adopt the blockchain, Sandblock’s potential user base grows.

But major brands might not want to relinquish control of their rewards/loyalty points and might be keen to develop their own proprietary token-fueled programs. With the exception of the partner firms that are already on board with the project, there’s not much of a precedent to determine if merchants will play nice.

Risks

  • Sandblock says it’s autonomous, yet it’s highly dependent on the participation of partner businesses and consumers for its success. -3
  • There are also many moving parts. For instance, it’s not just the Satisfaction token at play but also the tokens of the many channel partners that must take off in order for the project to flourish. If it catches on like Kohl’s Cash, great. But for that to happen, Sandblock must be successful not only attracting businesses that are already on the blockchain but perhaps eventually traditional retailers whose brands consumers know and trust. -2
  • The SAT token is being defined as a utility token. Considering that the partner tokens built on top of the SAT cryptocurrency will be assigned a value and are tradeable, however, it might resemble a security token to regulators. -3

Growth Opportunity

  • The more that the blockchain and cryptocurrencies make their way into the mainstream, the greater the growth potential for a project like Sandblock that is fueled by consumer activity. Sandblock already boasts several key partnerships across a potential 5 million customers and more than 1,000 shops and online retailers. The partner list includes ETHlend, Innovorder for payments, Europe’s movinga, retailer EspacePlaisir, fashion brand Artumes & Co and Blue Points, another merchant rewards startup. +3  
  • Many major brands are evaluating how they can integrate the blockchain into their businesses, with companies ranging from Sony to Starbucks filing for patents and exploring investments, respectively. This activity bodes well for a platform like Sandblock that is fueled by other brands using their platform to reward consumers. +2 
  • The Sandblock ecosystem is mobile-fueled with an app for both iOS and Android, which is sure to prove an attractive feature for millennials. +4
  • Successful pre-ICO could be a harbinger for similar results with the public crowdsale. +3 
  • The management team is impressive and the list of veteran strategic advisers adds heft to the deal. +3

Disposition

We arrive at a score of 7 out of 10 for the Sandblock ICO.

Investment Details

  • Token Type: Utility
  • Platform: Ethereum ERC20
  • Symbol: SAT
  • Pre-ICO: Completed
  • Public Crowdsale: May 16 – June 16, 2018
  • Token Supply: 55 million
  • Tokens Available for Sale: 27,500,000 (8 million of which were already sold in the pre-sale)
  • Hard Cap: USD 8 million
  • Price: 1 ETH = 3,000 SAT Tokens
  • Minimum Purchase: 0.05 ETH; 0.01 BTC; USD 50
  • Maximum Purchase: 500,000 SAT token
  • Payment Methods: Visa, Mastercard, Ethereum and bitcoin
  • Jurisdiction Banned: China

Featured image courtesy of Shutterstock. 

Author:
Gerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.