ICO Analysis: SwissRealCoin

Tokenized real estate is a rising trend around the globe. While each project is unique, whether by regional focus or the composition of the token, one common feature they share is the likelihood of appearing on the regulatory radar. As a result, it’s common to see blockchain-fueled real estate projects register tokens as securities in their respective jurisdictions.

While Switzerland has been dubbed Crypto Valley, there hasn’t been a flood of real estate ICOs in the country, or really any — till now. SwissRealCoin, which is behind the ERC20 SRC token, dubs itself “Switzerland’s first real estate crypto token.” They’re looking to capitalize on the stability in the Swiss commercial real estate market and disrupt real estate management in the process.

Token

SwissRealCoin is registering SRC as an asset-backed security token and the company has applied for a letter of non-action by FINMA, Switzerland’s financial market supervision authority.

One of the key issues/risks with real estate investments is a lack of liquidity, considering the time and costs involved with divesting assets, a process that SwissRealCoin describes as “cumbersome”. SwissRealCoin (SRC) is built on the Ethereum blockchain, and it is designed to bring data transparency (rental and occupancy rates, etc. so you can track the asset manager performance) and “full liquidity” to the table.

SRC is backed by Swiss real estate, which the startup describes as “one of the most stable asset classes in the world.” Each token reflects a fraction of the investment portfolio, and the securitized nature of SRT is designed to bring stability to the price.

Should the price of the token surpass that of the real estate investments amid robust demand, SwissRealCoin will issue additional tokens at the market rate. The new tokens are then invested in more commercial properties, growing the value of the portfolio and accelerating it nearer to the market price, which is a hedging mechanism to mitigate volatility. Token holders are entitled to vote on the direction of the investment portfolio.

Source: SwissRealCoinThere’s a potential 25% bonus reserved for ICO participants who pre-register.

Team

Yauhen Yakimovich is the co-founder and CTO is a tech entrepreneur and seasoned software developer with nearly two decades of experience. Yakimovich is the former CTO of PriceHubble and has served in various engineering capacities and research including data mining and data analysis at the University of Zurich.

Brigitte Luginbuehl is the CEO and head of real estate. She is a real estate veteran, having spent more than a decade with Jones Lang LaSalle Ltd Switzerland across real estate-fueled corporate finance and M&A.

You can view an interview with Luginbuehl via the below YouTube link –

Verdict

The SwissRealCoin token sale is backed by a professional management team with experience both in the real estate and software development markets, both of which are a boon for the ICO. The asset-backed nature of the SRC token is another positive, giving investors the ability to diversify their cryptocurrency portfolio with exposure to commercial properties that are collecting rents, etc.

But as with any ICO there are risks, and in the case of SRC the glaring one appears to be tied to the startup having only recently emerged from the conceptual stage. Meanwhile, the composition of the real estate portfolio is dependent on token holder votes, and SwissRealCoin doesn’t even enter into the sourcing and acquiring real estate phases of its roadmap until next month. So you are placing a bet that they will be able to deliver on what they are promising without any real evidence that they already have, at least not as SwissRealCoin.

Risks

  • SwissRealCoin is a startup in the true sense of the word, with the project only having been launched in Q2 2017 when cryptocurrency prices were thrust into the spotlight. That doesn’t mean SRC won’t reach all of its lofty goals, including a global expansion that begins with broader Europe and Asia, the Middle East, South America and North America. But it’s one of those projects without the wind of historic performance at its back. -2.5
  • Real estate market risk. Switzerland weathered the housing crisis intact, but SRC’s expansion plans include developing Latin American economies like Brazil and Venezuela, the latter of which is battling hyper-inflation currently. -1.5

Growth Opportunity

  • SwissRealCoin has volunteered to be objectively rated by Swiss ICO and blockchain asset-rating agency Alethena. Alethena plans to present its findings on SwissRealCoin as a use case on May 22, a day before the public crowdsale begins. The fact that SRC is willing to cooperate and proactively seek out a market rating suggests they have nothing to hide and are confident about the viability of the project. +1
  • SwissRealCoin has plans for the SRC to trade on some popular exchanges once the ICO is complete and considering they at least reach their hard cap (details below). They identify Binance and EtherDelta as a couple of the trading platforms they’re targeting. +2.5
  • Professional management team with experience valuing the real estate market and making deals. +4
  • SwissRealCoin is registering SRC as an asset-backed security token and has applied for a letter of non-action by FINMA. +3.5

Disposition

SwissRealCoin displays great promise for returns, and it boasts many of the features that you want in a coin and a project. But it’s early days for the commercial real estate portfolio, and while they may have already identified attractive assets to purchase, there’s not yet a precedent for what they’re doing. So for that reason, we’ll rate SwissRealCoin a 7 out of 10 for now but will keep our eyes on this project and the token once it’s launched on cryptocurrency exchanges for sure!

Investment Details

  • Token Type: Security
  • Platform: Ethereum ERC20
  • Symbol: SRC
  • Pre-Reservations: Open since February 2018 for shareholders, friends and family, partners and early community members.
  • Public Crowdsale: May 23, 2018
  • Token Supply: 150,000,000 + a maximum of 7% more tokens issued
  • Tokens Available for Sale: 150,000,000
  • Price: CHF 1
  • Soft Cap: CHF 30 million
  • Hard Cap: 160,500,000 SRC
  • Payment Methods: BTC, ETH or fiat currency
  • Jurisdictions Banned: “United States (including its territories and dependencies, any state of the United States and the District of Columbia), Canada, Japan, Australia, North Korea, Iran, Myanmar, Afghanistan, Angola, Aruba, Bangladesh, Belarus, Benin, Bhutan, Bolivia, Botswana, Brunei Darussalam, Burkina Faso, Bosnia, Burundi, Cambodia, Cameroon, Cape Verde, Central Africa republic, Chad, Comorros, Congo, Congo Democratic republic, Cuba, Cote d’Ivoire, Djibouti, Dominica, Ecuador, El Salvador, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guatemala, Guyana, Guinea, Guinea Bissau, Haiti, Honduras, Iraq, Jordan, Kenya, Kyrgyz Republic, Laos People’s Republic, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Micronesia, Moldova, Mongolia, Mozambique, Nauru, Nepal, New Caledonia, Nicaragua, Niger, Nigeria, Niue, Oman, Pakistan, Palestinian Areas, Papua New Guinea, Reunion, Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, South Georgia, Sudan, Sri Lanka, Suriname, Syria, Swaziland, Tajikistan, Tanzania, Timor, Togo, Tonga, Tunisia, Turkmenistan, Uganda, Uzbekistan, Venezuela, Western Sahara, Yemen, Zambia, Zimbabwe,” as per the company’s disclaimer.

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.