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Eloncity Rating Review

Stable+

Investment Rating

Expiry date 17 Nov 2018 17 Aug 2018

Rating report

Based on the analysis performed and issues identified, we have assigned the Eloncity project a “Stable +” rating. However, we would like to note that at the time of writing, a demo version of the project is already available, which is a likely indicator of the team’s serious intentions, but without a publicly available MVP, it is difficult to fully assess the project’s true potential.

We draw attention to the fact that the project is currently vulnerable and dependent upon favorable business , financial, and economic conditions to meet commitments on the project’s deliverables. In the event of adverse business, financial, or economic conditions, the team is not likely to have the capacity to meet its commitments on the project. This outlook assesses the potential direction of the project; in determining a rating, consideration is given to any changes in economic and/or fundamental business conditions. This outlook is not necessarily a precursor of a rating change or future team actions.

Disclaimer: We would like to emphasize that the project is at a fairly early stage (currently there is no information available about the presale, private sale or ICO dates. Private sale registration has already started). ICO details and token metrics are not specified in the white paper or on the project website. We also understand that the smart contract code can be published only when token metrics are known, but nevertheless, we highlight its absence at the time of writing. The whitepaper consists mostly of technical details, not business information. However, as there is almost 3 months till ICO date, we do not consider this a risk as of July 25, 2018.

The project has the following strengths which are worth noting:

●    Ambitious, keeping up with the time, idea.

●   Potential to occupy a significant industry’s niche and solve relevant industry problems.

●   Eloncity implemented it in the USA and successfully launched in the village in San Juanico, B.C.S. in Mexico, built a standalone micro-grid. Publicly first Eloncity microgrid (ECTP-enabled) is planned to be proposed at the same time as ECT sale event.

●   This year, Eloncity developers are aimed at fully launching AI, which will be promptly determining the optimal price. In addition, depending on the financing, it is planned to launch the construction of an innovative center for renewable energy production, using equipment, which every contract manufacturer is welcome to make and open technologies.

●  Already available iCAN (fully integrated smart contract residential energy storage system (rESS) that time-shifts energy use and enables a better use of renewable energy) for USD 999 with USA shipping. In addition of being rESS, iCAN also has a number of integrated IoT features: smart outlets, Wi-Fi extender, optional WPC compatible wireless charger. As of the report date, the NetZero is under finalization and is and scheduled to pass the UL safety standard.

●   Healthy vesting conditions;

●   Venture funds as Investors & Partners.

However, there are also a number of risks still associated with this ICO project:

Legal/commercial risks

The regulatory status of ECT and distributed ledger technology is unclear or unsettled in many jurisdictions.

Power supply is a highly regulated industry in all countries of the world and the legal frameworks vary significantly from country to country. In addition to that, it is rather conservative industry, and there may be yet unforeseen difficulties in platform introduction in the different markets, including difficulties in acceptance by the society.

It is difficult to predict how or whether regulatory agencies may apply existing regulation with respect to such technology and its applications. Additionally, it is difficult to predict how the energy market may develop.

Competition risks

The project has strong competitors based on their progress and market position, however, we note that Eloncity has several competitive advantages in terms of performance and security as compared to its rivals. Considering such strengths as an experienced development team and extensive tools, the project can become a worthy competitor.

MVP

The project is based on a very technologically complex idea, which requires a large amount of testing of different stages and coordination not only within the team, and something in the process of development can go wrong. Public absence of MVP seriously jeopardizes the ability to assess the team competencies, capabilities of the suggested product, degree of product development and other crucial factors that investors in an ICO must consider before making any decision to invest. The project already has an MVP, but there is no publicly available smart contract code. Eloncity implemented it in the USA and successfully launched in the village in San Juanico, B.C.S. Mexico, built a standalone micro-grid. According the comments received from the team, at the moment they are building at three locations (Brawley, CA, Soc Trang, Vietnam and Lagos, Nigeria).

The criteria we use to choose locations to build the prototype is based on the local economy and the geographic occurrence of Eloncity model. Also, there is already available iCAN (fully integrated smart contract residential energy storage system (rESS) that time-shifts energy use and enables a better use of renewable energy) for USD 999 with USA shipping. In addition of being rESS, iCAN also has a number of integrated IoT features: smart outlets, Wi-Fi extender, optional WPC compatible wireless charger. Unless there are almost 3 months ahead before the ICO, the technical development roadmap is very detailed, the team leaves no doubt in their skills, we would have assessed this risk as High-to-Medium. The team plans to release the initial design of smart contract in Q1’2019, and the GitHub account will be provided at that point. Once the MVP is publicly released, and the team progress is transparent this risk’s level of may go down.

Incomprehensive whitepaper

The whitepaper does not include market/competitor analysis, forecasts of marketing activities or plans for product promotion, token and project economics are unclear. As of the report date there is no publicly available information regarding forecasted use of proceeds, all information was received from the team. The whitepaper is to be updated soon, according the information received from the team.

Unverifiable ICO details on the date of analysis

The smart contract code on GitHub was unavailable for public review and important ICO information (vesting periods, token distribution timelines, bonuses, token burning) could not be verified. ICO details are unavailable at the date of analysis and token price details make it difficult to access the real risk level of the project. Token and project economics are described poorly; the developers need to specify in more detail expected compensation rates for token holders of and all other economically-relevant information. The information is to be updated soon, according the comments received from the team.

Security risks

Hackers or other malicious groups or organizations may attempt to interfere with the Eloncity Network or ECT in a variety of ways, including malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, etc. Furthermore, ECT will be “ERC-20” tokens on Ethereum and Ethereum rests on open-source software and is an unlicensed distributed ledger, and there is a risk that a third party or a member of the Foundation may intentionally or unintentionally introduce weaknesses into the core infrastructure of the Eloncity Network, which could negatively affect the Eloncity Network and ECT.

Development

The project is still under development and may undergo significant changes over time. Although it is intended for the project to follow the specifications set forth in this document, and the Foundation will endeavor to work towards those ends (subject to internal business considerations), changes may be required to be made to the specifications of ECT or the Eloncity Network for any number of reasons. But considering the fact that Eloncity/POMcube project has been developing for more than four years now and the hardware platform is undergoing UL 9540 /UL 1973 /UL 1741 conformance test, and the only improvement the team has in mind is to shorten the delay for EV charging when it is physically outside its home microgrid, so the project should be very stable, we assess the development risk’s level as Medium-to-Low.

Based on the analysis performed and taking into consideration all of the risks associated with the Eloncity project as of July 2018, we assign the Eloncity project a “Stable +” rating. The rating may need to be reassessed once further alpha/beta versions of the product are released and feedback on the first demo is received.

Project & ICO information

Modern life depends on the vast electric grids that power everything from light bulbs to mass transit subways. Despite tremendous strides in technological innovation, these existing grids are largely built on an aging design, that is essentially a centralized grid architecture fed by large power companies in remote locations which connect customer sites through the complex labyrinth of transmission and distribution (T&D) network. The coordination of electricity production in alternating current (AC) form and its delivery through the complex T&D network are managed by regional system operators or independent system operators (ISO). The ISOs not only need to balance the electricity production and consumption in real time, but also must ensure the electricity produced remotely is transported to customer sites without running into congestions on the vast T&D network. While the current electric power grids are amongst the most complex engineering system ever constructed by humanity, this centralized power grid design is starting to show its age. Today’s centralized power grids face significant challenges in providing safe, reliable, secure, and affordable energy services.

The zero carbon city will be characterized by a complex set of interdependencies between diverse aspects of city operations, infrastructure, and platforms. It will require new networks for collaboration between cities, utilities, and other energy sector players, as well as transportation providers, building owners, telecommunication companies, and technology suppliers. Navigant Research estimates that such collaboration will create a market worth more than $1.5 trillion over the next decade for smart services across urban energy, buildings, mobility, and other city operations, which is an area for the project’s actions.

The Eloncity platform operates under the tagline "Free energy to the world" and is a decentralized network consisting of many smaller networks that provide electricity not only for themselves, but also can produce it for sale. Such a system is an alternative source of electricity and has several advantages:

  • Low cost.

  • Transparence.

  • Openness.

  • Clean electricity production.

  • Production of renewable energy.

Eloncity decentralizes the power infrastructure into millions of self-sufficient microgrids. Energy price will become transparent to all. The Eloncity's open technologies are aimed to make electricity virtually free so that the world can be electrified with clean energy.

Website

Whitepaper

Medium

Bitcointalk

Reddit

Twitter

Telegram

LinkedIn

Facebook

Instagram

 

PRIVATE SALE

ICO (PUBLIC SALE)

Start date

No data (registration already started as of the date of review)

No data (Q3 2018)

End date

No data

No data (Q3 2018)

Stage cap

No data

No data

Ticker

ECT

Token

ERC-20

Token supply (for sale/total)

320,000,000 / 1,000,000,000

Soft cap (according official Telegram group)

USD 10,000,000

Hard cap (according official Telegram group)

USD 33,000,000

from which:

Cornerstone investors – USD 6,000,000

Private sale – USD 19,000,000

Public sale – USD 8,000,000

Estimated capitalization (Total valuation = Hard cap/tokens for sale * total token supply)

USD 103,125,000

Token price (official Telegram group)

Cornerstone contribution:

USD 1 = 11.11 ECT; Private contribution : USD 1 = 9.8 ECT

USD 1 = 8.33 ECT

Discounts

Cornerstone contribution – 25%; Private contribution – 15%

No discounts

Lock-ups

Lock-ups of Cornerstone Investor/Private Contributor is nine months, with 10% of the token will be vested each month or 10 times.

No lock-ups for Public contributors

Min/Max contribution

Cornerstone: USD 0.6 mln/USD 1 mln

Private: USD 0.2 mln/USD 0.6 mln

ETH 0.1/ETH 3

Currencies accepted

ETH, BTC

ETH

Restricted list

USA, China, New Zealand

KYC procedures

Yes (period isn’t set)

Country of legislation

Singapore


The team has already closed USD 20 mln cornerstone investments’ round, which includes OK Blockchain Capital,Krypital Group, Starwin Capital, Fenbushi Capital, LD Capital, Horman Capital, Collinstar Capital, Interblock Capital, JRR Crypto, Fly Fund, QINGZHENG Capital, Decentrust Capital, Ceyuan Ventures, GVC Capital, Powerlink labs.

The Public Sale will be held as follows:

The team has launched an 8-week Official Bounty Program to reward its supporters with ECT tokens between June 8, 2018 and Aug 2, 2018(CST). 1,500,000 Eloncity Tokens will be allocated to the bounty program.

The tokens will be distributed in 6 campaigns below:

ECT tokens will be distributed within six weeks after the completion of the public contribution.

All further details related to stakes earnings are available by the link: https://bitcointalk.org/index.php?topic=4443361

Token allocation

The team specifies the following vesting terms:

●   Eloncity lab: Fund for technology R&D, the technology pillar of the Eloncity Model. This fund will be locked for six months after the token sales events, then it will be vested equally on a quarterly basis over the next eight quarters;

●   Team: Fund for operation and development of the other three pillars of the Eloncity Model; 1) Eloncity Community and Business Development; 2) Performance-based project financing and revolving loans; 3) Collaborative and equitable regulatory framework. This fund will be locked for 12 months after the token sales events, then it will be vested equally on a quarterly basis over the next eight quarters;

●   Public sale: no vesting terms;

● Cornerstone/Private sale: The vesting period for the tokens distributed is 9 months. 10% token released per month, 10 times. The first 10% of ECT tokens will be distributed within six weeks after the completion of the public contribution.

Given that the project roadmap states that a stable release is expected by Q3 2018, vesting terms for the team and Eloncity lab cover almost all milestones on the roadmap, so at least covers the period that the project and the token need to stabilize.

Forecasted use of proceeds:

Information regarding the forecasted use of proceeds was received from the team along with the plans for product promotion.

Eloncity is a community-based and consensus-driven model for proliferating decentralized renewable energy throughout communities all over the world. In other words, Eloncity standardizes the process to empower the global community transition into a shared regenerative energy economy. In Eloncity ecosystem, the energy proconsumers play the critical roles in the planning and implementation of their energy future. The blockchain smart contract platform allows energy proconsumers to collaborate in exchanging locally produced energy and equitably allocated the cost-benefits of shared energy assets deployed in their community. Eloncity does not sell products (e.g., solar panel, battery system, appliance, etc.), thus there is no product marketing plan. However, Eloncity is developing an online global renewable energy marketplace (i.e., eCommerce) where eligible solution providers and energy prosumers exchange renewable energy goods and services. Eloncity will be actively promoting Eloncity marketplace which offers solutions, tools, case study, guides and community forum for developing community-based renewable energy projects, plus eligible renewable energy products and solutions. The Eloncity utility token (ECT) acts as the unified medium of exchange for accessing renewable energy goods and services in this global marketplace. The marketing activities of Eloncity marketplace will take place during Phase-2 and Phase-3 of the Eloncity Roadmap.

Team’s intention to spend 50% of the funds on the technology research and development looks fair due to specifics of the sector. Nevertheless, we draw attention to the fact that the expected expenditures on market and community development and regulatory and project financing strategy development are very vague and need further specifications. But assuming that the project’s target market is the whole world, expenses related to promotion on each of these markets are likely to be quite significant. However, the team may opt for gradual market exposure, e.g. start focus on one market at a time to address this risk. Actually, the project aims to verify no more than 5 different markets to ensure the replication can take place without surprise. The communities, all over the worlds, are encouraged to replicate the Eloncity model by collaborating with their respective hardware solution providers and service providers directly through the online Marketplace. Eloncity will not take any commission from product sales, and charge end customers for exchanging energy either. Community members are the sole owners of their microgrid.

Overall, we note that forecast distribution of funds is healthy, taking into account the project’s nature and current development stage. The only possible drawback is that if the hardcap is not reached, it is highly likely that forecasted use of proceeds will change accordingly.

We believe that the whitepaper has the following problem:

● As of the report date there is no information regarding forecasted use of proceeds in the Whitepaper; information was received from the team, the team plan to publish the information regarding the use of proceed soon.

● Forecasts of marketing activities and plans for product promotion are not covered in the whitepaper. According information, received from the team, they do not plan to disclose classic marketing plans, they will continue to attend some high profile blockchain events to acquire more communities, appear at professional events like DistribuTech, Energy Storage Summit, Community Choice of Aggregation (CCA) Summit, as well as events specifically targeting real estate developers. They may attend CES 2020 and Cebit 2021 to make more people aware of Eloncity as well.

The above issues and the absence of marketing activity make it impossible to analyze potential market distribution for the services. However, given that the project already has a demo version (under internal use), the idea is revolutional and the solution looks promising, this should not significantly increase level of risk for potential investors.

Technical overview

The figure below displays the key technology building blocks of Eloncity Decentralized Energy Architecture (EDEA), an ecosystem of decentralization technologies and crypto economic tools to enable the shared regenerative energy economy. The modular design facilitates tailored deployment of Eloncity microgrid for diverse communities around the world. An optimal Eloncity configuration would be a direct current (DC) microgrid serving customers within a one-mile radius. This microgrid uses the DCBus Scheduler to manage the power flows in the community. The shared resources in an Eloncity microgrid would be locally generated renewable energy, and the equipment such as BESS, PV arrays, small wind turbines, electric vehicles, DCbus Schedulers and other decentralized renewable energy assets.

The blockchain exchange platform, or the Eloncity Token Protocol (ECTP), functions as the open and secured public accounting ledger. The ECTP is an enhanced Ethereum blockchain platform that supports high-volume high-speed transactions. The ECTP smart contract equitably allocates the cost-benefits based on where and when the shared resources are used. To support optimal local energy supply and demand, Eloncity’s artificial intelligence (AI) technology and community network10 provide real-time information on local energy pricing to participating community members to aid in informed decision making. Each community member can set his or her own purchase prices for needed energy, and sales prices for the excess energy. The design’s objective is to optimize localized energy supply and demand in real-time.

Eloncity Model includes a crypto utility token, Eloncity Token (ECT), to facilitate local energy exchange and incentivize investment in battery energy storage system (BESS) for storing newly harvested renewable energy, as well as creating an open global marketplace for renewable energy products and services.

Eloncity technology building blocks integration

ECTP operations:

The Eloncity hierarchical blockchain network is a decentralized processing network. This blockchain network uses a unified utility token so that the energy valuation can be determined consistently across the entire microgrid,  and the tokens will be used among the Eloncity microgrids for inter-microgrid energy exchange. Even though each microgrid uses the same cryptocurrency, the mapping to the electricity, however, is not meant to be equal across microgrid. Each microgrid has its own supply demand situation though the competitive alternative energy, i.e. gasoline or published electricity rate(s) from local utilities, will constrain the floating range, otherwise residents of the given microgrid will choose alternative way to acquire energy of their respective choice. Therefore, the mapping between ECT and electricity is expected to resemble one another within one city.

The ECTP specifies the algorithms and rules for an Eloncity microgrid operation. To implement this protocol, the software and hardware will be needed to conform to ECTP specifications. An ECTP-compliant microgrid operation consists of the following elements:

The smart contracts based on energy exchange price equilibrium will be developed per ECTP specification and be built into the hardware components of Eloncity microgrid to enable automated energy exchange. The first hardware devices to support the ECTP is the POMCube NetZero, it is a behind-the-meter (BTM) BESS.

ECTP is a suite of the protocol governing how electricity is exchanged at each endpoint. The three most critical processes of this protocol are:

  1. The protocol used in between endpoints and the blockchain energy exchange platform.

  2. The TLVs defined between the Scheduler and the endpoints, and

  3. How DCbus endpoints send/ energy.

Additionally, EVs will be roaming from microgrid to microgrid, and hence the ECT can be used as a token to access EV charging when it travels outside its home microgrid. A scheme called Aggregated Routes from OSPF Protocol v2 is adopted to propagate inter-microgrid energy exchange. The OSPF protocol divides the entire network into areas, and the information topology will not be redistributed to other areas. Eloncity Model leverages the OSPF concept to scale inter-microgrid transactions. The other protocol may be adopted later, such as BGP, to improve system scalability and interoperability. While blockchain technology is still considered to be its infancy stage, the transaction processing capability will increase dramatically as the technologies of the ECTP-enabled platform rapidly advance. By leverage the Foundation’s experiences in warehouse-scale computing (cloud computing), in which partitioning complex the power grid to easily scale the system performance exponentially.

Similarly, Eloncity Model leverage the Shard concept to scale the decentralized energy grid incrementally to increase performance as needed while mitigating large-scale grid upgrades that may leave excess capacity idles unnecessarily. Shard is a proven technique for scaling the database to support additional geographic locations. Eloncity’s Shard concept is based on network sharding.

To sum up, OSPF protocol is used for micro transactions scalability, BGP – for even stronger improvement of system scalability and interoperability, Shard concept - for the gradual scaling of the decentralized energy grid to improve performance as it is needed

 

DPoS is an algorithm for achieving consensus in a decentralized environment, which is an alternative to consensus PoW and PoS. Briefly, the basic principle of DPoS is the division of voting and validating participants. As a result, network participants who have the right to vote in the system (coin holders) are not transaction validators. Thus, one subset of participants selects another subset, who in turn generate the blocks.

Proof of Work (PoW) vs Proof of Stake (PoS)

DPoS summary

DPoS is designed in such a way that it maintains a high frequency of new block generation and is capable of processing a large number of transactions per unit of time compared to other consensus algorithms that operate in a distributed environment without trust. DPoS is well suited for the design of open access systems where no user identification is required.

Description of services & their applicability

Eloncity operates on a community-based decentralized renewable energy platform powered by blockchain ecosystem for building and deploying decentralized energy resources.

Decentralized Renewable Energy architecture, comprised of:

The key features of the project:

●  Blockchain-based Trade System with AI algorithm. Block trading systems make the trade in energy transparent, while the algorithm based on AI technology will find a fair market price in real time as a reference information.

●  Smart Energy Storage Systems. «Smart» energy-saving systems, in conjunction with IoT technology (Internet of Things), will compete on local energy markets by ensuring the supply of locally produced renewable energy.

●  Switching DC Power Bus. The technology of the new energy system is provided by a constant system for counteracting the peak load.

●  Proof of Stored Power (PoSP). The new mining scheme provides investment advantages of the ESS class (executive systems).

●  Direct Current Appliances. A new generation of household DC-devices can eliminate the re-conversion of capacity and increase the competitiveness of renewable energy of local production.

The next steps of the team are to continue following detailed technical roadmap and getting prepared to the upcoming ICO.

Roadmap

It is difficult to immediately assess the potential of such a decentralized project – but if you believe the road map provided by the developers, then there will be no problems.

Eloncity implementation roadmap is delineated into three phases: Phase 1, the Foundation has been collaborating with a coalition of global partners to develop key building block technologies for the Eloncity model over the past four years. The collaborative efforts have successfully developed and commercially launched intelligent networked BESS, cloud-based energy management system (EMS), DC appliances, and customer sited renewable power generators; Phase 2, within the eighteen to twenty-four months, the Foundation will collaborate with strategic partners to demonstrate the Eloncity model in communities in around the world; Phase 3, the Foundation will focus on mass proliferation of the Eloncity model to all targeted markets globally.

The model is extensive and detailed, it includes many detailed technological stages of development until the end of 2022, at the same time the Whitepaper presents a description of each protocol and gives formulas that leaves no doubt that at this stage of the project the team has already thought through the technical details up to such stages as the merger of Eloncity network with centralized AC networks, EVTP-compatible electric vehicle ready for mass production, ensuring compatibility of the SAE J1772 electrical connectors standard with 200Vdc networks, etc.

The disadvantage of this roadmap is that it only covers the technical aspects of the project and does not lay out the business development process – e.g. when and how marketing activities (besides conferences) will be performed, how many users the platform the company intends to reach by the end of each stage, etc.

Market outlook

6.1 Market overview:

The energy industry has always been an industry with centralized authorization and operation. Today’s electrical power grid is over 100 years old, has been carefully designed and engineered and a number of operational standards have been developed to ensure a reliable electricity supply.

When stocks of traditional energy sources such as oil, gas and coal are inexorably decreasing and their cost becomes too high,  and use leads to the formation of a greenhouse effect on the planet, an increasing number of countries in their energy policy are turning their eyes towards alternative energy sources. When the major conversion of the Eloncity takes place in 3 to 7 years (by 2025), the fossil fuel might also lose its economy of scale as the fossil energy users will shrink dramatically.

Current major sources of renewable energy are primary fuels including: hydroelectric, wind, solar, liquid biofuels for transportation, geothermal, and oceanic sources (wave, tidal and thermal).

When clean energy first made headway in the global scenario, questions were raised about how stable and scalable it was. At a macro level, unstable policies for powering future growth were exacerbated by technological immaturity and lack of funding. Nevertheless, clean energy installations continued to grow, albeit slowly, until a dramatic leap a few years ago (source – World Energy Outlook 2017).

The statistic below displays a projection for the market size of the global renewable energy market in 2019, with historical values for 2013 and 2014. In 2013, the renewable energy market totaled 432.7 billion U.S. dollars. The compound annual growth rate (CAGR) between 2014 and 2019 is expected to be about 10.3 percent (Source – statista.com).

The energy sector has been long in the need of decentralization. Utility services will get a powerful competitor, because the platform will be able to provide 24/7 access to energy purchases. Open tariffing is an excellent opportunity to establish a loyal price, considering a huge number of factors. Open technologies will make electricity really affordable, because the high price is a huge problem of centralized services, specifically, when the price hiking is associated with the (energy) delivery charges but the energy charge itself. Many states in US, such as California and Texas, have now higher network costs on the electricity bills.

The problems of energy, environmental and modern centralized power grid are:

●  Environmental and public health problems.

As the few examples as massive oil and gas leaks, accident in the Gulf of Mexico, Chernobyl and the Fukushima incidents attest, the centralized grids pose increasingly unbearable impacts to the environment, health, and safety of the people that it serves.

●  Safety and reliability problems.

The failure at one single point on the centralized power grid could cause adverse impacts to millions of customers over vast areas. Whether natural or human-induced accidents at any vulnerable points that could be located anywhere on the complex centralized power grid sprawling over the vast geographical areas, the existing power grid’s ability to guarantee safe and reliable energy services looks to be increasingly challenged.

●  Adaptability and resilience.

During an intense heat wave, power demands can precipitously peak as customers increase their air conditioning. Meanwhile, the grid T&D wires and electric power plants experience reduced electricity transmission and generation due to increased ambient temperature. In the foreseeable future of climate change, cities around the world are expected to experience growing incidents of grid failures due to adverse weathers. From heat waves in Australia and California to frigid winter spells in the northeastern US, to hurricanes Katrina, Sandy, Rita or Maria, we have witnessed repeated episodes of massive grid failures due to the system’s inability to adapt and absorb the disruptions brought about by climate-change-induced events

●  Unaffordable electricity costs.

The electricity in AC is relatively complex which requires numerous supporting resources, called ancillary services, to ensure the delivered powers at customer sites remain within the required power quality limits

With the challenges of natural disasters, population growth, and climate change, new approaches to energy production and distribution are needed. The solutions must warrant vibrant and sustained growth for all.

The potential markets for the Eloncity Solution would be areas that are being served by fossil fuel and nuclear powered centralized grid, or those areas that lack electricity services. Eloncity’s market penetration strategy intends on providing full turnkey solutions in areas that lack electricity infrastructure, while simultaneously offering tailored Eloncity solutions to incumbent utilities to address the chronic challenges facing the existing centralized grids in built environments. The Foundation will collaborate with the incumbent utilities to fortify existing grids. The reformation of existing utility regulatory regimes is not prerequisite for the success of Eloncity market transformations.

6.2 Competitive landscape:

We will use Porter’s Five Forces framework to perform an initial competition assessment for the Eloncity project.

Bargaining power of customers – Low

The key factor for an ecosystem like Eloncity is its popularity among both regular users and specialists and Its’ usability. If it succeeds in attracting enough contributors, users and companies will have no other option but to use the ecosystem (and vice versa). Eloncity will never compete with communities as it is not creating another monopoly but provide the turnkey solution for communities to replicate Eloncity model. We assess the bargaining power of customers as low.

Bargaining power of suppliers – Low

The suppliers’ system is absolutely transparent, due to smart contracts, trading within the platform will be as transparent and secure as possible. Any transaction is reliably protected from outside interference. AI allows you to quickly get fair prices.

Threats of new entrants – Medium/Low

The threat of new entrants is medium-to-low, as all blockchain developers have to conduct their design and development activities at a high level of sophistication relative to security threats. The market is developing and there are not many major players at the moment; barriers for new entrants are relatively low, but the potential competitors should entrants will have to possess the similar IP in order to stay competitive.

Threat of substitutes – High/ Medium

Threat of substitutes can be assessed as high to medium, as currently there are many competitors in the market, including those appearing in the market earlier, and subject to much hype to boot. However, if the project succeeds in attracting a sufficiently large audience and occupies its niche, then considering the fact that they are building their system based on such unique key features as PoSP, DCbus, etc. then developers/users may not wish to switch to any other platform out of convenience.

Industry rivalry – High

There are several blockchain projects, which are currently looking into solving alternative energy problems via building decentralized platforms.

 

Eloncity

WePower

EtainPower

PowerLedger

Ticker

ECT

WPR

EPR

POWR (+Sparkz)

Project type

Decentralized blockchain platform for renewable energy

Decentralized blockchain-based green energy trading platform

Decentralized blockchain platform for renewable energy

Decentralized blockchain platform for energy exchange

Token type

ERC-20

ERC-20

ERC-20

ERC-20

Algorithm

DPoS, smart contracts; ECTP (OCPF) protocol, Shard concept, IoT concept

Ethereum Smart contracts; IoY concept; PoW

Not defined

First operated on PoW, then transited to PoS. POWR is placed into a smart contract escrow system to gain access to Sparkz and is then taken out once the POWR token runs empty.

Description of services and features

Blockchain-based Trade System with AI algorithm; Smart Energy Storage Systems; Switching DC Power Bus; Proof of Stored Power (PoSp); Direct Current Appliances

Declared: high level of transparency, availability and speed of work due to Blockchain use;

The platform has all the necessary permits and licenses to operate in the European energy market.

Declared: high transparency, while at the same time following the zero-emission principles

AI algorithm;

Two tokens: EPR – platform token + PPS, energy token.

High level of transparency. Hybrid public and consortium blockchain approach. POWR tokens on the public Ethereum blockchain and a feeless Ethereum blockchain handle the high transaction volume of P2P energy trading.

Key users

All – organizations, technology providers, developers, common users

All – organizations, technology providers, developers, common users

All – organizations, technology providers, developers, common users

All – organizations, technology providers, developers, common users

Development stage

Public release of the first Eloncity microgrid (ECTP-enabled) and 1st energy self-sufficient campus based on NetZero technology construction in Q32018. Project finalization by 2023.

Demo is already available.

Project finalization in Q1 2019.

Demo and wallet are under development;

Project finalization by 2021.

Demo is available.

Project to be finalized by Q3 2019.

ICO status

Not started

Ended

Presale ended; ICO in process (

07 May 2018 - 30 June 2018). Although according information above EPR’s ICO has already been finished, there is no public information about collected funds.

Ended

Funds collected as of ICO date/Hard cap)

Unknown/ USD 33 mln

USD 40 mln/ USD 40 mln

Unknown/ USD 20 mln

USD 26 mln/ USD 30 mln

Total tokens

1,000,000,000

746,403,007

10,000,000,000

1,000,000,000

Token for sale

32%

55%

35%

35%

Valuation at ICO date (Hardcap/% of tokens for sale )

~ USD 103 mln

~ USD 72.7 mln

~ USD 57 mln

~ USD 85.7 mln

Market cap

N/a yet

USD 18.9 mln

N/a yet

USD 137.9 mln

Nowadays the renewable energy sources are one of the prior industries, which attracts a huge number of new investors.

WePower enables renewable energy producers to raise capital by issuing their own energy tokens. These tokens represent energy they commit to produce and deliver. Energy tokenization standardizes simplifies and opens globally currently existing energy investment ecosystem. As a result, energy producers can trade directly with the green energy buyers (consumers and investors) and raise capital by selling energy upfront, at below market rates. Energy tokenization ensures liquidity and extends access to capital. The WePower blockchain solution is currently recognized by Elering, one of the most innovative Transmission System Operators in Europe, also they already have the support of Lithuanians energy minister and the energy market standards which count for several european countries, so WePower seems realistic to be implemented as a legal independent energy trading platform in and around Europe. As a business model Ethereum smart-contracts are used. All coins involved in circulation are a conditional equivalent of electric power (1 token = 1 kW / h). Thus, the crypto currency purchased on the exchange can be exchanged in the future for n-number of kilowatts of renewable electrical energy. However, it is a question how can the utility-scale renewable energy power plants run with positive margin with no subsidies from the government. At the same time WePower doesn’t specify how people at residential grid can trade with solar farms at 69KV or higher. The trend all over the world is to eliminate the subsidies from the government. If no one can make utility-scale wind farm profitable, crowdfunding of PPA (Power Purchase Agreement) is not the best idea for the energy market.

Etainpower is a platform that is based on the renewable energy of trading platform, with the help of this technology they are making smart contact and are aiming to tokenise and making energy renewable energy revenue. They also provide the producers of renewable energy with help to complete the project financing. The project is going to build a decentralized ecosystem that will help in reducing the financing cost and improve the efficiency of the project.

PowerLedger was founded in May 2016 which makes it relatively old compared to many of the other cryptocurrencies on this list. When POWR began, they attempted to help solve three significant issues facing the global energy system.

POWR is a quite unique cryptocurrency as very few have the adoption and public approval of major governments. Australia fully supports energy platform and hopes it will alleviate many of their ongoing power shortages.

Currently, POWR has person to person trading of renewable energies in Australia and New Zealand. They have charging stations popping up across Australia and have plans to expand further. With fully developed applications and many on the horizon, POWR looks to be the safest play in the long term for mass adoption as an entire country is already rallied behind it.

PowerLedger has the following applications: P2P trading, Neo-Retailer, Microgrid/embedded network operator/strata, Wholesale market settlement, Autonomous asset (AA) management, Distributed market management, Electric vehicles, Power Port, Carbon trading, Transmission exchange.

All the projects above are on the Decentralized blockchain platform for renewable energy, but Eloncity project has the following advantage features over its’ competitors:

●  It balances the generation of renewable energy for the electricity demand;

●  AI, which is aimed to calculate fair market price in online regime 24/7;

●  DC appliances and protected DC output from BESS;

●  Mining system for stored renewable energy;

●  Proof of Stored Power (PoSp): New mining scheme makes ESS investment grade financial property.

●  Etc.

Eloncity has several competitive advantages in terms of performance and security as compared to its rivals. Considering such strengths as an experienced development team and extensive tools, the project can become a worthy competitor. The team of the project assess the competitors above (WePower & EtainPower) as no comparison as they simply don’t have the technologies nor the determination to put their own interest behind. As to PowerLedger, the project is highly assessed from the Eloncity’s team point of view and they believe the projects can help one another and speed up the process to make renewable energy the primary source of energy.

It is still possible that other alternative networks could be established in an attempt to facilitate services that are similar to the services, or alternative networks could be established that utilize the same or similar code and protocol underlying ECT, the Eloncity Network. The Eloncity Network may compete with these alternative networks, which could negatively impact the Eloncity Network and ECT.

Team

An unusual combination of blockchain technology and artificial intelligence, which is represented in ELoncity model, which integrates advanced technologies, best practices and lessons learned from around the world to create a scalable and replicable design for unleashing the potential of the community-based renewable microgrid to attain a more vibrant regenerative energy, seems really technically complicated. Therefore, it’s important to be sure, that the team members’ experience is sufficient.

 

Andy li

Michael Nguyen

Position

Founder

VP of program management

Total experience

20+ years

30+ years

Relevant experience

Yes

Yes

Relevant education

Yes

Yes

Professional achievements

CTO/CEO @Pomcube,

Former CTO of ChinaCache

Architect for KORNET, NTT Docomo & ChinaNET (CSCO) and Verizon (JNPR)

Optimized largest backbone CDN for

ChinaCache

All Direct Current mega data center for Alibaba

World’s first energy router

Holds 17 patents four industry awards for technology innovation;

Energy Efficiency Program for California investor-owned utilities (IOUs)

Distributed Energy Resources Planning for California IOUs

Integrated Resources Planning & Procurement for California IOUs

Zero Net Energy & Advanced Energy Community in Los Angeles County, CA

LinkedIn

Yes

Yes

Connections

500+

500+

Endorsements / Recommendations

Yes

No

 

 

Justin Wang

Gregary Liu

Position

Product Manager

Technical Marketing Director

Total experience

10+ years

15+ years

Relevant experience

Yes

Yes

Relevant education

Yes

No

Professional achievements

-

-

LinkedIn

Yes

Yes

Connections

24

261

Endorsements / Recommendations

No

No

 

 

Dunping Yao

Haichuan Jiang

Position

Hardware Engineering Manager

System Verification Manager

Total experience

2+ years

10+ years

Relevant experience

Yes

Yes

Relevant education

Yes

Yes

Professional achievements

-

-

LinkedIn

Yes

Yes

Connections

36

43

Endorsements/ Recommendations

No

No

 

Peng Xu

Allen Ding

 

Position

Software Engineering Manager

Eloncity Project Manager

Total experience

5+ years

5+ years

Relevant experience

Yes

Yes

Relevant education

Yes

No

Professional achievements

-

-

LinkedIn

Yes

Yes

Connections

39

40

Endorsements/ Recommendations

No

No

 

As it can be seen from above, the team composition is quite diverse, together with technical specialists in blockchain area, there are specialists exclusively in the energy and environmental area. In general, the team seems quite complete and professional, as the disadvantages we can note the lack of information about Eloncity on almost all accounts, the unpopularity of some accounts (very few contacts and lack of recommendations), which may be related to the fact, that most of team members are Chinese citizens and it is quite complicated to verify the sufficiency of their expertise and professionalism via LinkedIn.

Advisors & Partners

 

Ensol Li

Haifeng Qu

Total experience

5+ years

5+ years

Relevant experience

Yes

Yes

Relevant education

Yes

Yes

Professional achievements

Chief architect of Tencent Data Center

Chairperson of Communications and Information Technology Committee of the China Engineering Construction Standardization Association

LinkedIn

Yes

Yes

Connections

124

500+

Endorsements  Recommendations

No

No

 

 

Howard Choy

Michael Yuan

Total experience

20+ years

15+ years

Relevant experience

Yes

Yes

Relevant education

Yes

Yes

Professional achievements

Howard Choy’s consulting in energy and environmental

Ph.D. in Astrophysics;

author of 5 books on software development

LinkedIn

Yes

Yes

Connections

500+

500+

Endorsements/ Recommendations

No

Yes

       

 

 

Robert Fortunato

Robert Mao

Total experience

10+ years

20+ years

Relevant experience

Yes

Yes

Relevant education

Yes

Yes

Professional achievements

designed award-winning Green Idea House;

Lecturer in Pepperdine’s MBA Program

Founder, Chief Architect at ArcBlock

LinkedIn

Yes

Yes

Connections

500+

500+

Endorsements/ Recommendations

Yes

Yes

       

 

 

Kelvin Xu

Jasmine Zhang

Total experience

20+ years

20+ years

Relevant experience

Yes

Yes

Relevant education

Yes

Yes

Professional achievements

VP of software of RiC Semiconductor;

Sr. software positions in S&P 500 companies

Key Account Director at NVIDIA

LinkedIn

Yes

Yes

Connections

217

391

Endorsements / Recommendations

No

No

 

Eloncity also has attracted Bryan Allen and Chris Walley as advisors. Bryan has overall experience over 30 years and currently is a software engineer in the area of Mars exploration – Jet Propulsion lab. There is no information regarding Chris in open sources.

We’d like to note, that Eloncity team has already  established a group of commercial partners and allies, including but not limited to ArcBlock, OK Blockchain Capital, Panasonic, SRNE, CyberMiles, Starwin Capital,  LD Capital, Horman Capital, Collinstar Capital, Interblock Capital, JRR Crypto, Fly Fund, QINGZHENG Capital, Decentrust Capital, Ceyuan Ventures, GVC Capital, Powerlink labs, etc., which gives them a strong position. The partners’ and advisors’ lists are still being updated and according the information, received from the team, from day to day the new partnerships and advisors are going to be announced.Eloncity has Krypital Group as the premier collaboration partner.

Krypital Group is a leading consulting firm that provides professional and comprehensive blockchain marketing services to clients worldwide. The largest clients of the Group are ArcBlock, CyberMiles, Egretia, Merculet, Quoinblock.

The project has already received investments from such powerful investors as Horman Capital, the VC organization that invests primarily in early stage and growth stage businesses that possess dedicated teams and innovative technologies able to disrupt large, traditional, inefficient industries, LD Capital, a digital asset investment fund, specializing in blockchain technologies, and Fengbushi Capital. The team is looking forward to the future collaborations.

Token analytics

The ECT is a utility token designed to facilitate energy exchange within an Eloncity microgrid (i.e., ECTP compliant microgrid) and among adjacent Eloncity microgrids.

The ECT will have two primary functions:

Besides being the medium for energy exchange in the community or store of values of renewable energy ECT performs several other important functions:

● The most important - to be the unified exchange medium for linking energy consumers to renewable energy solution providers in the emerging decentralized shared economy.

●  ECT mining - before the market reaches the milestone of one terawatt-hour of newly harvest renewable energy stored in ECTP-compliant BESS, miners will receive 16 ECTs as rewards for each megawatt-hour of newly harvested renewable energy stored in the ECTP-compliant BESS. Miners are owners and owners of BESS.

● ECT mining based on half-life (to incentivize early investment in ECTP-compliant BESS for storing newly harvested renewable energy).

● Future of ECT - Future buildings are expected to be increasingly energy self-sufficient.

Token price factor analysis

At this stage the token/ICO metrics and economy of the platform (size of commission, etc.) are unknown, so we can only discuss fundamental factors for the price:

FACTOR

DESCRIPTION

PRICE EFFECT

Demand for the service

The production of renewable energy, as well as the extraction of various types of fuel, are also some of the problems that centralized utilities face. The decentralized platform Eloncity will allow to modernize the existing system, replacing its algorithm of work. The energy sector has been long in the need of decentralization and Eloncity comes with an ambitious idea under the tagline "Free energy to the world", operates on decentralized network platform, consisting of many smaller networks that provide electricity not only for themselves, but also can produce it for sale. Such a system is an alternative source of electricity and has several advantages: low cost, transparency, openness, clean electricity production, production of renewable energy.

⬆⬆⬇

Volatility of cryptomarket

Although the platform, token and product do not seem to have speculative purposes, the high volatility of cryptomarkets may cause traders and speculative investors especially at first to trade ETC, which may lead to token price fluctuations for the token or even speculative activities (pump & dump, etc.).

⬆⬇

Discount

Contribution starts from $100,000 USD and maxed out at $600,000 USD, 25% for cornerstone contributors and 15% for private contributors off discount are applied. Therefore, the presale and siding investors who wish to realize their gains will be able to drop the price lower and yet receive their profits.

No vesting period for public sale

Absence of vesting conditions for public sale may result in spontaneous sale of tokens once listed on an exchange which may drop prices down for a (hopefully) short period of time. At the same time the public sale token amount is only around 25% of the total tokens amount, which should not affect the token price significantly.

Limited token supply

Assuming that the company develops as intended and the demand for the solution is sufficient, a limited token supply can result in a long-term deflation of the token price.

Investment risk analysis

RISK

DESCRIPTION

LEVEL

Lack of information about token metrics and ICO details. Smart contract code not available on GitHub

We draw attention to the fact that the ICO details and token metrics are not specified in the white paper or on the project website. We understand that the smart contract code can be published only when the token metrics are known, but nevertheless, we draw attention to its absence at the time of writing.

Disclaimer

Legal/commercial risks

The regulatory status of ECT and distributed ledger technology is unclear or unsettled in many jurisdictions.

Power supply is a highly regulated industry in all countries of the world and the legal frameworks vary significantly from country to country. In addition to that, it is rather conservative industry, and there may be yet unforeseen difficulties in platform introduction in the different markets, including difficulties in acceptance by the society.

It is difficult to predict how or whether regulatory agencies may apply existing regulation with respect to such technology and its applications. Additionally, it is difficult to predict how the energy market may develop.

High

 

Market/Commercial risks

Eloncity has direct competitors in the market and there are still many projects using a decentralized consensus mechanism and the “hype” around the project is not high, but the concept intended to be used has competitive advantages over those with similar approaches, implying a high-to-medium risk level.

High

/ Medium

 

MVP

The project is based on a very technologically complex idea, which requires a large amount of testing of different stages and coordination not only within the team, but also with various utilities, something in the process of development can go wrong. Public absence of MVP seriously jeopardizes the ability to assess the team competences, capabilities of the suggested product, degree of product development and other crucial factors that investors in an ICO must consider before making any decision to invest. The project already has an MVP, but there is no publicly available smart contract code. Eloncity implemented it in the USA and successfully launched in the village in Shanguanico in Mexico, built a standalone micro-grid. Also, there is already available iCAN (fully integrated smart contract residential energy storage system (rESS) that time-shifts energy use and enables a better use of renewable energy) for USD 999 with USA shipping. In addition of being rESS, iCAN also has a number of integrated IoT features: smart outlets, Wi-Fi extender, optional WPC compatible wireless charger. Unless there are almost 3 months ahead before the ICO, the technical development roadmap is very detailed, the team leaves no doubt in their skills, we would have assessed this risk as High-to-Medium. Once the MVP is publicly released, and the team progress is transparent this risk’s level of may go down. The team plans to release the initial design of smart contract in Q1’2019, and the GitHub

account will be provided at that point.

High

/ Medium

 

Incomprehensive whitepaper

  • Absence of market / competitor analysis in Whitepaper;

  • Absence of the forecasted use of proceeds in the WP;

  • Unclear token and project economics.

Given that there is no publicly available MVP yet, all of the above significantly increase risks for investors. However, the team is going to publish some additional information before the ICO, which may answer some or all of the above questions.

 

Medium

 

 

Security risks

Hackers or other malicious groups or organizations may attempt to interfere with the Eloncity Network or ECT in a variety of ways, including malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, etc. Furthermore, ECT will be “ERC-20” tokens on Ethereum and Ethereum rests on open-source software and is an unlicensed distributed ledger, and there is a risk that a third party or a member of the Foundation may intentionally or unintentionally introduce weaknesses into the core infrastructure of the Eloncity Network, which could negatively affect the Eloncity Network and ECT.

 

Medium

 

 

RISK

DESCRIPTION

LEVEL

Development risks

The project is still under development and may undergo significant changes over time. Although it is intended for the project to follow the specifications set forth in this document, and the Foundation will endeavor to work towards those ends (subject to internal business considerations), changes may be required to be made to the specifications of ECT or the Eloncity Network for any number of reasons.

Medium

/Low

 

Team composition

The team has ambitious plans in terms of product complexity. Overall, the team seems quite complete and professional, as the disadvantages we can note the lack of information about Eloncity on almost all accounts (this may be connected with the very early stage of the project), the unpopularity of some accounts (very few contacts and lack of recommendations), which may be related to the fact, that most of team members are Chinese citizens and it is quite complicated to verify the sufficiency of their expertise. Advisors of the project are experienced professionals.

Low

 

Roadmap

The roadmap only covers the technical aspects of the project, and does not specify the business development process in much detail or the team’s plans regarding market coverage/number of platform users, etc. We note that there are some business-related milestones on the roadmap, but we believe that there might be more than what’s mentioned.

Low

 

Token price decrease

There are no fundamental factors indicating that the token price will face significant pressure and the bonuses are relatively low. However, there is no public information about the amount of funds raised during the presale round and the terms of the ICO are still unknown, so the exact number of tokens sold with a discount is unclear.

Low

 

 

 

 

The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication.

Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud.

We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.