Analytics

December 12

Tokenbox ICO Project Analysis: Blockestate

December 12

The new project offers a new format for the market: ICO as STO. Tokenbox analysts have figured out what the chances of success for a company from the Cayman Islands.

Blockestate (Cayman Islands)

Blockestate is a project that provides investors with ownership of real estate fund shares. This is a new format for the market, ICO as STO.

The project’s mechanics are as follows: for the amount collected from the STO, the team buys promising real estate in the states of North and South Carolina, uses part of the profit from renting or resale to buy out and then burn BEAT tokens, thereby increasing the cost of the tokens. The remaining profit goes toward the acquisition of new real estate, and so on in an endless loop.

Investments are divided into two types:

  1. long-term and stable at 6-9% per annum (secondary housing, long-term rental and commercial real estate)
  2. highly profitable but risky assets (housing under construction, short-term rental and multifunctional premises) at 15-30% per annum.

The investment system is described in the whitepaper. One of the advantages is that there is detailed cost allocation.

As for the profit distribution mechanism, in Blockestate there is, as such, no system for paying dividends as a percentage. The compan y has decided to choose an alternative: once a quarter, 50-100% of the profits (depending on the success of the fund) are diverted to tokens and their subsequent burning. Thus, a small portion of the tokens accelerates the growth of the token.

According to the team, this model has an advantage in terms of taxation, because Investors who do not want to sell their tokens are not subject to the tax burden. After 5-10 years, the fund can be disbanded or resold; in this case, all profits will be proportionally divided between investors.

The investor protection mechanism works as follows: when the BEAT price dump is at 20%, a stabilization plan is activated, according to which the company will use the resources to buy out the tokens in order to return to the previous level.

Thanks to a partnership with Polymath, who is responsible for the release of security tokens, BEAT will be built according to the ST-20 standard on the broadcast network. The total number of tokens offered for sale is 100 million, but the team has the right to issue an additional 10% “for their own people” in case of a full HardCap collection and an increase in the fund's valuation of at least 25%.

The HardCap of the project is $50 million. The main part of the profits from the STO (93-99%) in the first year will go toward direct investments in long-term projects, 0.5% quarterly toward operating expenses, 1-7% of the fund's value will be held in dollars as a reserve. Now the project is in the seedling stage. The token sale is scheduled for early next year with a listing at the end of 2019 and the first buyout in early 2020.

A team with good experience was selected, though without non-equivocal stars of the industry. Steven Skinner, the CEO of the project who has 8 years of experience in business development, is a finance specialist with 12 years of experience in real estate. The team also includes 2 “superstars” with tremendous experience in real estate (Brad Galbraith and Rusty Pulliam), but they act as consultants.

The partners of the project Blockestate are Polymath and Matador. These companies are responsible for the release and distribution of BEAT tokens, OpenFinance Network is responsible for future token listing, Issuance is responsible for the marketing of the token, Coinlist for – KYC/AML, Riveles Wahab LLC – for jurisprudence, Syneva Economics for economic investment analysis, Amazix for "community management".

The STO format is one of the most promising formats today. The STO from Blockestate is an example of another investor protection mechanism and an alternative way to make a profit by burning tokens.

The project itself is of an average level because at this stage a less than brilliant team has only a whitepaper, functional partners and long lock times. A recommendation from Tokenbox analysts is not to invest in a project at this stage. The preliminary estimate is 5.5/10.

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