WePower Rating Review
|Start ICO||01 Feb 2018|
|End ICO||01 Feb 2018|
We have reviewed project's progress as of January 2019 and identified that the project's development is not in line with the roadmap, although there is an available working product, not all milestones on the roadmap have been achieved, and there is not public product GitHub to track product development, therefore project rating has been decreased to Risky+.
We assign the WePower a "Risky+" rating.
WePower is a well-designed and promising project in the field of green energy. Among WePower's assets are a strong and professional team, a promising idea, MVP, and support from state power regulators and electric power companies. In addition, not every project has time to develop a client base for a platform and announce a pilot in partnership with a national network operator before its ICO. Among other advantages of the project we should mention the WPR ICO model token, as it allows one to easily predict a return on investment while minimizing any legal risks.
WePower is not a unique startup in the full sense, as there is still a number of projects including those in the ICO format offering their own fintech solutions for green energy, and often one can draw parallels between them. At the same time, competitive advantages over and differences from competitors are formulated very clearly by WePower, and in our opinion there are no projects that can be compared to them in terms of quality and background.
WePower, like any startup has some risks and weaknesses in our opinion, and whilst we did not find any significant risks for the business model or marketplace development at the first stages of the road map, the weakest place could be the very development of green energy, by analogy with the risks for the blockchain industry.
For example, the very prospects for this segment's growth in the near future can be attributed to systematic risks in the green energy industry. With the decrease in oil prices, the competitiveness of relatively expensive green projects is somewhat reduced. In many countries, the lobby for classic methods of generation is simply huge. Compared to this, further growth of the renewable generation sector can be questioned, and the expected return on investment may not be high.
General information about the Project and ICO
A concise definition of the WePower project is given by the team in the white paper and on the site — "WePower is a blockchain-based green energy trading platform". If you decipher the laconic slogan, WePower is a project aiming to create a P2P marketplace for electric power, where manufacturers and consumers of electricity meet, with the emphasis on renewable sources of electricity (green energy). At the same time, the main function of such a marketplace is to finance green energy projects. In exchange for funding, investors receive obligations from a manufacturer to supply electricity in the future, expressed in ERC20 tokens.
In its plans the WePower team is not limited to the creation of a platform to finance the construction of power plants; in the end it is planned to create an energy trading platform connecting the real wholesale electricity market and implementation Network Load throttling functions. The latter solves one of the key problems of renewable sources of electricity – volatile power that depends on external natural factors – solar activity, river flow, and wind power.
The project is led by an Eastern European team of enthusiasts - specialists in electric power and fintech technologies; the founders have extensive experience in the power industry, including green energy. Accordingly, the key market for WePower is Europe and the most advanced and favorable European countries for green Energy – Spain, Italy, Germany, Estonia and others. Such choices and origins for the team are quite logical, because it is the European power industry that is in the front line of using renewable sources of electricity, with widespread government support and favorable conditions for such projects.
The project itself also has the support of government authorities and electric power operators. For example, the Ministry of Energy of the Republic of Lithuania has expressed its support for WePower, and as part of a joint pilot the project is working with the Estonian National network operator, Elering. Several solar power plants with a total capacity of more than 1000 MW have already joined the project: Conquista Solar, Civitas projects and Novocorex.
Another event that we would like to point out is the participation of the project in Startupbootcamp Accelerator (SBC), where WePower was one of eleven projects in the electric power industry selected by the Australian Energy Track program. Participation in this program offered the opportunity to launch the project in the Australian market together with Energy Australia, the largest energy company in the region. A quote from the CEO of the project concerning this is as follows: “We will be able to work directly with some of Australia’s largest energy companies and providers, implementing our technology in Australia, to raise capital for green development projects and fix energy grid inefficiencies associated with high renewable energy penetration”.
The list of partnerships and the scope of the project support is really impressive; not every ICO project can boast even a single entry into the real sector, let alone the support of government regulators.
The project is legally represented by WePower Ltd, registered in Gibraltar. As for the current status of the project: A successful presale has already been carried out, part of the WePower platform code and the smart contract code have been published on Github. The platform MVP is also published, it may be used to explore as a producer and consumer/investor. The team has recorded a large number of introductory videos, including one on current MVP functionality, and they are available on the official YouTube channel.
ICO Start: 1 Feb 2018
ICO End: 15 Feb 2018
Hard cap: $35,000,000
Soft Cap: $5,000,000
Token: WPR, ERC20 standard
ICO Price: 1 ETH = 4000 WPR
Minimum investment: $200
Bonuses: 15% discount for early investors: before reaching the soft cap ($5 million) 4600 WPR will be deposited for 1 ETH.
Accepted currencies: ETH
Total issuance: Total token supply will be determined and announced closer to the token sale date to account for the ETH price fluctuations. Token supply will be based on the fundraising targets outlined below.
55% - Token sale
15% - Community and user growth
10% - Future stakeholders
20% - WePower team
Allocation of funds:
A public token pre-sale was completed on October 22, 2017; $3 million was raised which corresponded to WePower’s stated goals.
Token creation will end when either the maximum number of WPR is issued or the contribution period has ended. If fewer than the minimum soft cap of tokens are issued, token sale contributions may be retrieved.
Unsold tokens will be burned.
Tokens allocated to the team (20%) will be locked for 3 years with a vesting schedule and tokens for future use (10%) will be locked for 4 years. Community and user growth tokens (15%) will not be locked.
Description of the services and scope of the project
WePower is a platform for the movement (purchase and sale) of energy capacities both between producer and consumer (or investor), and between consumers. The specificity of the marketplace is that the platform is trading tokenized energy, that is, cryptographic tokens providing an owner's right to receive a certain amount of electricity at a certain point in time. This enables the financing of power generation projects to replace future electricity generation.
Thus, the WePower platform should be considered in two hypostases – as a market for investment in renewable energy projects and a market for energy facilities. From the point of view of service consumers, these can be either investors who will not exercise the right to receive electricity (token) or real consumers – households. Electricity producers may also have the status of a project or a production in process.
In general, WePower does not provide a framework for the operation of the platform, but older versions of the white paper have the following infographic:
The team is going to connect the real power market and the energy token market through participation in the wholesale electricity market on their own. That is, WePower is a kind of mediator in providing the real power of the platform’s internal energy tokens.
Electricity tokenization is a release of specialized tokens based on an Ethereum smart contract, where one token corresponds to 1 kWh. In addition to the name, the token is distinguished by information about the type of electricity (source), the date of production, supply of electricity and price.
The process of releasing and using tokenized energy is as follows:
1. A manufacturer of green energy submits an application for participation in the platform. WePower independently, as well as with the help of third parties, conducts due diligence on the project and makes a decision on granting access to the platform. This phase also determines the amount of funding required and the amount of energy tokens to be released on the platform.
2. The power manufacturer "lists" on the platform, issuing its own tokens based on the Ethereum smart contract.
3. An energy token price auction is taking place, where users of WePower determine the market price of the investment, i.e. energy token discount in relation to the actual projected cost of electricity.
4. Energy tokens become available for trading within the framework of the WePower platform; market participants can either purchase such tokens or wait for an established delivery date for the electric power.
5. At the date of implementation of Energy tokens, the holder can either obtain real power for their own needs or sell the electricity on the wholesale market through WePower.
WePower states that the procedure for checking the quality of the project and providing funding will be much faster and more efficient than a traditional bank assessment and loan/equity lending process. The team provides the following illustration of the benefits of project financing:
In this case, there is a reduction in the number of necessary procedures. As a weakness of the traditional debt financing model, requirements of banks for projects’ own capital are also cited, as their own funds serve as collateral for financing.
In itself, the crowdfunding approach to ensuring a return on investment from a future product when obtaining funding for a project is nominally more efficient in terms of the cost of financing. This can be illustrated by the deep penetration of such a model into financial markets and its rapid development. However, in practice it is difficult to assess the approach against the specific market of green energy.
For example, for WePower's business model it is important to understand certain assumptions: The duration and objective difficulties in procedures for obtaining funding are dictated by (often) high risk for the creditor, and it still remains to be seen how effective WePower will be, since there is no information about specific assessment models and pricing. Although the team claims a need for bank guarantees and insurance in obtaining funding, as well as a willingness to cover the losses of investors from their own funds, for now these are only words.
The WePower documentation (in addition to the description of the business model and other standards for ICO items) includes a description of the three stages of platform development, a kind of extended road map: Breeze, Storm, Hurricane. In fact, you can gain an idea of the final platform version that WePower seeks to create; this is not limited to electricity tokenization. In particular, it is planned to create a full-fledged P2P energy marketplace, where the WePower electric power system will be optimized through smart grid systems and the integration of the IoT concept. More detailed stages of the project development are described in the corresponding section of this review.
In our view, the team's plans are quite broad and poorly applicable in the current environment, but as the concept of smart energy evolves and the share of renewable energy sources in the total generated increases, the plans could be implemented. Especially now there is active discussion among the European Energy Community regarding the introduction of innovative systems into the sphere and the fact of the extensive support for WePower demonstrates the interest of countries in such innovations.
Due to the specific market for WePower's work, it is wrong to assume that the platform will find popularity in the crypto community and a wide range of investors. In this regard, it is advisable to focus on large institutional investors or large private capital as the target audience of the platform's consumers. The team obviously adheres to the same approach, as we see work mainly with companies and professional players in the industry, as well as work with the partner base.
The generation of green electricity is already fairly entrenched in the overall generating capacity. Despite the fact that the theme of renewable generation remains fashionable, at the end of 2015 19.3% of world consumption was covered by green energy already. Therefore, the further development of this rather "mature" industry causes interest that is not at all idle.
On an annual basis, the www.ren21.net website publishes a big overview of the industry called RENEWABLES GLOBAL STATUS REPORT. To better understand the order of figures characteristic for the industry, here is some data taken from the 2017 report:
As you can see, investments in 2016 significantly decreased compared to the previous year. Thus generating capacities in absolute value have grown in all segments. Despite the 23% decline in investment, it is possible to talk about the trend prematurely.
If you are guided by Bloomberg New Energy Finance, the more general picture of the distribution of investments is as follows:
The diagram shows that in recent years there were no steady trends in the total volume of investments, and the fall in 2016 can be explained by several reasons. Here we will follow the logic given in the study.
Accordingly, the first reason can be considered to be the lower total dollar cost of production, which was observed in 2016. The second reason is considered to be the timing of global investment projects. The third reason is the situation in the largest specialized investment market — China, where in 2016 there was a hard stop for the launch of new generations using solar batteries. But none of the above allows us to draw a conclusion about the crisis phenomena seen in the industry.
It is clear from the above that the renewable energy industry has long been a global and integrated one. Its development is influenced by a large number of factors, both economic and specific.
For further illustration of the global generation pattern, we present a table with the distribution of capacity generation by country at the end of 2016:
Thus, we are dealing with a global market that has a fundamental infrastructural value for the whole world population. But despite multi-billion-dollar investments, the market remains highly centralized and often subsidized. Substantial capital expenditure requirements and long payback periods lead to significant entry thresholds for investors.
Such projects as WePower seek to change these existing patterns, and first of all to disclose the investment potential of green energy to a wider range of investors.
The project is led by an international team, and there are three key managers who are the co-founders — Nikolaj Martyniuk and Artūras Asakavičius, as well as Kaspar Kaarlep, the CTO. In total, 24 people including consultants are in the team, but 12 experienced energy engineers and former Skype programmers work directly for the WePower platform.
Not every investor in ICOs is immersed in the financial sphere, to say nothing about European green energy, so to understand the competence of the team in the fields of green energy and the smart grid is important to understand its professional background. Below we will present the characteristics of the top figures in the project and some members of the team:
Nikolaj Martyniuk - Co-Founder and CEO (LinkedIn)
Nikolaj is responsible for overall strategy and business development. He has gained experience in the field of financial markets and energy over more than 10 years. He started his career at Orion Securities as a financial analyst. Since 2012, he has been active in the energy sector, being a member of the board of Directors and CEO of Modus Energija — a Lithuanian company which is part of the Modus Group, which is developing projects for the creation of solar and biogas power plants in Eastern Europe. He has also worked at JSC Renvia as Head of Biogas Department. In addition to working at WePower he is a partner in Contarian Ventures, which works among other things with smart grid projects.
Artūras Asakavičius - Co-Founder (LinkedIn)
Artūras has a legal education, and the beginning of his career also took in this sphere. For the past 5 years, he has led a team of lawyers, responsible for all FinTech, blockchain, and cryptocurrency related businesses and regulation at the biggest law firm in the Baltics - Sorainen. He is also chairman of the Lithuanian Fintech Association and twice recognized as a Lithuanian Crowdfunding Patron by the EU Commission.
Kaspar Kaarlep – CTO (LinkedIn)
He has a Master's degree in engineering from Tallinna Tehnikaülikool. Kaspar was previously the CTO of Elektrilevi - Estonia’s largest DSO, and has worked on green energy integration and the Smart Grids challenge from different angles over 7 years. He was responsible for development and execution of the DSO strategic plan and their Smart Grid technology roadmap as well as management of the overall Information Technology and Operational Technology enterprise architecture. Kaspar is a well known speaker at European conferences regarding energy system digitalization, specializing in building and implementing big data analytics systems and smart meters.
Heikki Kolk - Energy IOT Expert (LinkedIn)
Heikki is the Principal Consultant for Catapult Lab’s consulting services team. In this role, he leads the overall activity of WePower’s three consulting service offerings: Systems Integration, Post-Security Risk Assessment Support, and Business Analysis & IT Governance Support. Prior to working at Catapult Labs, Heikki worked for Elektrilevi, holding different positions over 10 years.
Mantas Aleksiejevas - Digital reach and sales (LinkedIn)
Googler, Business Geek and Startup, Entrepreneurship and Export Development (SEED) Program Lead for the New European Markets. All the necessary information about this professional experience and merits is given in his LinkedIn profile.
We should also mention a strong list of project consultants; here are some of the names:
Jon Matonis - founding Director of the Bitcoin Foundation and Chairman of Globitex.
Eyal Hertzog - Founder of MetaCafe.
David Allen Cohen - founder and Chairman of Dcntral.
Trevor Townsend - Startupbootcamp Australia energy program manager.
Nimrod Lehavi - co-founder and CEO at Simplex and board member of the Israeli Bitcoin Association.
Summing up our review of the project team, we would like to note a really strong composition, where competent blockchain specialists and financiers and, more importantly, energy engineers are represented. In our view, the fact that the project's top management comprises of people who know the electric power industry and the European electrical energy system from inside allows one to once again be convinced of the seriousness of WePower's intentions. Also there are a large number of consultants, whose individual names are recognizable among the blockchain community and in the electric power industry. In our opinion, WePower obviously has sufficient management competence and an extensive consulting base.
Development strategy and Roadmap
Usually a roadmap is a list of the main milestones of the project which must be completed in order to achieve stated functionality. At the same time, these are often not the most elaborated aspect of many projects. Usually there is a "pretty" chart on the site, plus its duplication with small explanations in the white paper.
At a first glance, it may seem that the WePower project goes the same way. On the main page of the site there is a nondescript roadmap which, without giving many details, promises a bright future by mid-2019.
However, the reader who goes further than lending and gets to the white paper will be surprised to find out that section "5. Road Map" accounts for almost 20 pages of the document. The section turned out to be excellent; if the authors had structured the document a little differently, it would have been more compact. This is only a matter of taste, however, and we do not downplay the importance of the section in its original form.
We would like to start with the project’s development plans from an earlier part of the white paper. It is not superfluous to note that one of the main goals for the founders is the desire to simplify the process of investing in green energy projects, making the investment process with WePower simpler and cheaper than it is now.
The section of the WP "2. WePower Business Case" has its own chart showing the current milestones:
As a commentary on the chart there is a list of tasks called «Currently the team is focused on:»
Launching the WePower pilot project with Elering, and tokenizing all Estonian energy in April 2018. We will issue 11 billion energy tokens and test our platform on the Estonian energy infrastructure.
Establishing company in Australia and starting SBC energy program in Australia.
Connecting WePower with first clients in Spain in August 2018.
Testing the WePower platform in September 2018.
Launching WePower in Spain in November 2018.
Expanding to neighbouring countries in 2019.
In the roadmap section there is a subsection, WePower Development stages, which describes in detail the action plans and strategy of the project team. In this section the WePower platform is defined by the following phrase:
«The WePower platform connects Ethereum smart contract-based global trading and investment capabilities to local renewable green energy plant construction, energy retail and flexibility markets».
To implement this functionality, the project team allocates three phases of development with very poetic names:
The Breeze phase, as its name implies, is "light", the first step in the development of the platform. At this point, WPR and Energy tokens will be integrated into a global trading platform that combines wholesale networks and regional retail markets.
Any user in this phase will be able to invest in certified projects dealing with renewable green power. Projects will be gradually added to the WePower platform and after that they will acquire their own Energy tokens. The possibility to trade tokens within the WePower platform will be developed first, and further opportunities will be added to trade with wholesale networks, first of all with Nordpool, EPEXSPOT and OMIE, which cover almost all of Europe.
Thus, the creation of the WePower Breeze phase will provide users with the functionality of investing, trading and total energy consumption, tied to smart contracts.
As more manufacturers and consumers of electricity are connected to the platform, there will be a need for additional optimization of existing networks. The WePower Storm phase will help to resolve this issue.
The prevailing situation is that existing networks were formed around large generating centers. Accordingly, these networks are configured for constant loads that provide a relatively small number of sources to the network. In the case of green energy, the situation has a slightly different look, here the loads will be significantly more volatile, and their will be a greater number of energy suppliers connected to the network.
The documentation describes in some detail the practical steps that will be taken to prepare the networks. Here we will not describe them in full detail, we will say only that the algorithms of machine learning and AI will be actively applied. The main efforts of these developments will be aimed at creating the following:
Virtual Power Plant (VPP) is a system of control over a distributed electricity network for green energy. This system will allow one to collect and manage information about the state of the network, its capacity and current capabilities. Also, VPP will serve as an aggregator of the produced electricity and act as a single source of supply in the market.
Congestion management and frequency regulation services are an important aspect of the Storm phase that will allow one to efficiently manage the power of the network by quickly measuring and increasing/decreasing distributed power.
Finally, the final phase of the development of the platform, WePower Hurricane, should complete two concepts — decentralized virtual energy and a p2p marketplace for electric power.
In the documentation, this phase is described as follows:
«As core and auxiliary platform features are successfully developed, WePower Hurricane will focus on drastically improving the scalability of the platform through lowering of transaction costs, simplification and automation of the user interface, and introducing AI-powered, system-wide optimization».
In this phase of platform development clients receive a unique opportunity — direct connection with the producer of green energy. By means of a smart contract a client will know exactly from whom the electric power is bought. This will facilitate the promotion of renewable energy.
The marketing strategy of the WePower project is at a very decent level. Currently, a set of criteria for evaluating the marketing campaigns of ambitious ICO projects (we cite WePower as one of these) has already been formed. We may say that the project fully satisfies the "best practices" for promotion.
The website and documentation are presented in four languages: English, Russian, Chinese and Korean. There are no questions about the website layout and the quality of translation; everything is done at a high level.
The website of the project contains links to official public forums; the list is quite standard:
The number of subscribers at the time of writing this review characterizes the team's serious attitude towards promotion on social media. Figures are optimistic:
Telegram – 5113
Including local Telegram groups for Chinese, Japanese, Russian etc.: more than 6.000 active participants
Twitter – 6693
Facebook – 7755
The main channels of communication with the community are groups on Telegram and a thread on bitcointalk.org. The thread has existed from the end of September; the first entry was made on September 25, 2017, and contains 25 pages of discussion. We can also note a separate thread for the bounty program, and strong points in the organization of the promotion on the forum, so the main thread is spared a flood of bounty hunters. The discussion itself is rather lively; the public is mainly interested in the ICO’s parameters, the competitive advantages and technical features of the project.
A large list of project partners, placed on the main page of the website, is definitely of great service:
As for press releases and announcements, WePower has no problems here. The website provides a number of links to publications in authoritative crypto media. A partial list of the most interesting articles is given below:
Blockchain Makes Energy Greener
In the history of energy production, there is an evergoing shift from one energy source towards another. In 1870, 70 percent of the energy produced was from wood. It then shifted to coal in the early 20th century and to oil and gas in the middle of 20th century.
This Blockchain-Based Energy Platform Is Building A Peer-To-Peer Grid
WePower is creating a new cryptocurrency to help facilitate a more democratic system of funding and buying renewable energy.
WePower Enables Green Energy Industry Financing Through Blockchain
Green energy address many global issues and the push for its development is accelerating. Today, renewable energy is not only seen as the answer to climate change, it addresses many political, economical, social and environmental issues as well. Mitigating greenhouse gases, curtailing pollution, reducing dependence on fossil fuels, increasing energy security are some of the benefits of green energy.
Revealed: The Real Secret of Green Power Powered by Blockchain
The man who has the most influential job in the world is leading the chant of climate change deniers. Moreover, Trump has already acted on his beliefs - consequences of the USA withdrawal from the Paris Climate Change Agreement in May, are still widely debated.
In addition to numerous publications, we would like to note the high-quality project blog on Medium. The posts turned out to be interesting and diverse, and the project and events related to it were well covered.
Additionally, we would like to note the team's activity on its YouTube channel. Many projects claim the existence of YouTube channels but not many of them can boast of interesting and informative ones. We commend WePower’s channel for the quantity and substance of its materials.
Competitors and competitive advantages of the project
In order to better understand the competitive environment and the competitive advantages of the WePower project, it is useful to view at least a section of the project thread on Bitcointalk. There were many questions about the similarity of the project to a number of other ICOs. Therefore, we will try to construct this section within the Q/A framework, since public discussion is always more valuable than the conclusions of a single person.
Thus, the main community request is aimed at comparing the WePower project with Power Ledger. Power Ledger is an Australian blockchain start-up that provides a marketplace for selling solar energy surpluses. Indeed, in many aspects the project is similar to WePower and, with a superficial glance, it may seem that WePower copies the idea of a "pioneer". But with more detailed consideration, it turns out that WePower has a more thoughtful development model in its region and detailing is much more thorough.
In any case, all projects aimed at developing and promoting green energy are useful and will be able to find their place in a fairly large market.
Economy of the Project
The economic model for the project is not properly disclosed in the documentation of WePower, although the basic principles of its formation are clear. The main emphasis in the documentation is made on the description of investor remuneration and the forecasting of corresponding cash flows.
Within the energy marketplace, there will be movement of tokenized energy and other cryptocurrencies. WPR tokens in this respect are not a means of payment, their attractiveness arises from the possibility of receiving payments and priority when buying energy tokens at auction.
In addition to standard gas costs, it is envisaged to charge 0.9% of the volume of tokenized energy from producers among WPR’s holders. At the same time, it is impossible to understand from the documentation how WePower’s operations will be financed; it is likely that energy token trading fees will be levied on the platform and when financing is received (token emission).
In the documentation, the team has made a simple and intuitive financial plan for the next 6 years which describes the planned capacity of power plants placed on the platform and the amount of "dividends" to WPR holders from energy sold.
Currently, the team has already announced the presence of potential customers from producers for 1000 MW – these consist of solar energy capacity in Spain (Conquista solar, Civitas, Novacorex). As a result, for the first year of operation, WPR holders' commission will be about 2 million euros, and will reach 253 million euros with a growth of capacity up to 120,000 MW by the 6th year. It is difficult to unequivocally consider the presented financial plan as a business plan for the project since it demonstrates only an approximate dependence of platform turnover and payments to WPR holders, while costs, capex or scenario conditions are not given.
The WePower project is promising and fits well with current ICO market trends. In general, the community has met energy-oriented projects well; the nearest competitor Australian Power Ledger managed to raise $34 million which could be called a success. We believe that there are opportunities for the successful placement of WePower.
It is necessary to include the growth prospects of this segment in the near future and the systematic risks for the green energy industry. With a reduction in the price of oil, the competitiveness of relatively expensive "green" projects is somewhat reduced. At the same time, the lobby for classical methods of power generation is simply huge in many countries. Against this background, further growth of the renewable energy sector could be called into question and the expected return on investments may not be high.
A considerable risk lies with the complexity of the WePower system. The late development stages of the Storm and Hurricane project contain many non-trivial solutions based on machine learning and AI; all this will be implemented on the current network infrastructure that was built for other processes. Given the importance of electricity and the networks themselves, it is rather difficult to predict possible difficulties in implementing at this stage.
Token investment attractiveness
As for the WPR token, the story is non-standard in terms of its investment attractiveness. This is related to the chosen business model and the format of the token. Despite the fact that WPR is not a security token, in fact, payments from electricity producers to WPR holders can be compared to a dividend. Contrary to the criticism of any such models at ICO due to the emergence of legal risks, WePower has thoroughly approached the legal purity of the token; a few separate posts have been devoted to this in the project blog. Independently of the legal issue, token holders will own an asset, the profitability of which depends on the volume of platform operations on the part of electricity producers. Also, WPR tokens entitle holders to priority participation in auctions, which corresponds to the practices of designing a utility token.
In the chosen model, the token has both pluses and minuses. First, there is no infrastructural significance for the tokens in addition to priority for auctions, and therefore there are risks of a long-term failure of the commission system; since with the growth of turnover on the platform, 0.9% of electricity sales will yield a significant return, but not for WePower itself. In the case of traditional utility tokens, a refusal to use them is often fraught with a change in the business model of the platform and the settlement system, so this option may be safer for the investor. WePower has its own answer on that respect - the lock-in period for team tokens is extended by 3 years, this is more than the average for the ICO projects. At least for this period, WePower's interest in tokens will be preserved.
Secondly, the introduction of a mechanism for "donating" part of the funds from energy-tokens sold to WPR holders may be the reason for recognizing the security status of the token; there may be legal consequences. The team assures consultation with the regulator regarding the token model and extensive further consultations on this matter; however, in the event of a change in government rhetoric, the existence of a constant flow of payments to WPR holders could set a precedent.
In contrast to the risks in the token model with a constant flow of payments, there is one huge plus for the investor - the ability to forecast profitability depending on the results of the project. Thus, there is no need to take into account the balance of supply and demand in the market, nor consider factors of increasing demand. When confirming the stated performance results, the reaction of the market will be forthcoming. As an illustration, the white paper provides a schedule of payments to WPR holders and identifies two periods: reaching the point of return on investment in the ICO and the subsequent period in excess of income.
The figures themselves are very solid, even for a start-up project. With the risk assessment that corresponds to WePower, the WPR token appears to be an extremely attractive investment. When the stated figures and the first payments are fulfilled, the market will instantly make a significant reassessment of the risk / return ratio, which will affect the price of the token. WePower has also announced a portfolio of ready projects for 1000 MW. Also, do not forget that unplaced tokens will be burned, so in the event of limited demand at the ICO but the fulfillment of the announced plans, investors could gain additional profit.