ICO Analysis: BeeToken

“Sharing economy” has been the buzz word among VCs over the past few years. The sharing economy is a model where consumers engage in a peer to peer exchange of goods and services via an online intermediary. Services offered via sharing economy are usually cheaper than those being provided by a product-centric organization. Uber and Airbnb are the prime success stories of this model, each valued at $60 billion and $30 billion, respectively.

As good as they may seem on paper, currently available sharing economy models are ripe for disruption. In exchange for simply connecting the users, platforms like Airbnb extract high commission fees from them. While Airbnb is now valued at $30 billion, none of this value has gone back to the guests or the hosts, who have powered this growth.

At the core of Bee’s value proposition is the Beenest platform, which is a short-term housing rental solution, directly competing with Airbnb. Beenest offers several advantages over centralized platforms like Airbnb and HomeAway, including:

  • Low transaction fees: While the total fees on traditional platforms like Airbnb range from 10-22%, Beenest can offer the same services with a 0% commission and total transaction charge (including insurance) of around 2%.
  • Aligned incentives: While there is no way for users of an unlisted company like Airbnb to participate in its growth, users of Beenest will benefit when the token price appreciates as the user base grows.
  • Decentralization: Airbnb has often been accused of removing negative reviews, siding with the hosts or deleting data at will. Beenest’s blockchain based data ensures immutability and prevents modification of any review. Beenest’s rating algorithm called the reputation system, rates the users in a transparent and decentralized manner.
    Even the conflict resolution is decentralized, as third party arbiters (who have to stake tokens) are selected in case of conflicts.

Beenest is a decentralized application created on top of Bee protocols. The protocols provide payment, arbitration and reputation functionalities and can be used to create sharing economy based decentralized applications like Beenest. Airbnb/Homeaway or maybe a ride-sharing application can use these protocols to create decentralized sharing economy applications.

Beenest also faces competition from one of the blockchain based startups called CryptoBNB. We like Bee Token better than CryptoBNB (a detailed guide explaining the differences is available here).

The Beenest alpha version will be released in Q1-Q2 2018. Expansion in 5+ U.S. cities will be done in 2019.

Token

Along with the BEE token, Ethereum/ERC20 tokens, bitcoin and fiat currencies can be used for transactions on the platform. However, the usage of BEE tokens provides some compelling advantages. Transactions on the Beenest platform will carry a 0% commission charge when BEE tokens are used. A 1% commission will be charged for payments via other cryptocurrencies while a 3.99% commission will be charged for fiat transactions.

Third party entities have to stake BEE tokes to get selected as third-party arbiters.

Team

The team members have worked for Uber, Google and Facebook. It’s amazing to see quality developers from the most sought-after organizations in the world working with the blockchain and creating decentralized applications. The world is awakening to the potential benefits of integrating blockchain in traditional use-cases.

Co-Founder and CEO Jonathan Chou was formerly a lead at Uber in the Security and Fraud division, and has experience in startups with family businesses that were sold to Sun Chemical and 3M.

The CTO and Co-Founder Tony Tran has over 10 years of development experience and has previously worked with Uber.

The other two co-founders Ali Ayyash and Min Kim worked with Google and Civic, respectively. Min Kim is a blockchain advisor to Quantstamp, WeTrust and Bitclave, all of which are credible organizations.

Verdict

The potential benefits of integrating blockchain technology in traditional applications and use-cases are quite evident. The Beenest decentralized application provides some solid advantages over competitors like Airbnb with lower commission charges, user incentives and trust.

Considering the market penetration of the cryptocurrencies, we all can agree that Bee Token won’t be an outright disruptor of Airbnb, at least in the short to medium term. But it definitely can carve a niche for itself most in the crypto community. One of the primary concerns we have is the roadmap, which has prioritized expansion in five U.S. cities as early as next year. That being said, once the product is thoroughly tested in 2019, expansion in other regions and countries won’t be much of an issue.

One important point worth considering is that Bee Token is not just about the property sharing application Beenest. The team is also providing Bee protocols for anyone to develop decentralized sharing applications on the blockchain.

Even though the scaling of Beenest will take some time, onboarding of dApps on Bee protocols in the near term will be a catalyst for the token valuation.

Growth Potential

  • Bee Token’s team is made up of engineers from Google, Facebook and Uber. It is one of the most tech-oriented teams that we have seen. We believe the team can deliver the product within the given timelines. +3
  • The project is very well conceived, and the whitepaper is detailed with technical and strategic components. +2
  • The sharing economy protocol can alone get a significant valuation, as many dApps would be eager to create sharing economy applications on the blockchain. +3.5
  • Once the business model is established and tested, scaling won’t be an issue for Beenest. Airbnb operates in 65,000 cities in 195 countries. +3

Risks

  • A Significant bonus was offered in the pre-sale (100% to private investors). The bonus tokens will be locked in for a month after listing, but still raises some concerns over a possible dump. -2
  • The real issues plaguing the sharing economy are around regulations with critics pointing out that the business model has an unfair advantage over traditional regulated businesses (see Uber vs. traditional taxi cabs). Bee Token does not seem to solve any of those issues and might face increased regulatory scrutiny going forward. -1
  • The roadmap stretches into 2020. We feel the expansion plans for Beenest are a bit slow after the initial roll out of services. -1

Disposition

We arrive at a score of +7.5 out of 10 for Bee Token. All aspects of the project, i.e., the home sharing application, Beenest and the sharing economy protocols, have substantial growth potential.

Investment Details

  • Token Type: Utility
  • Platform: Ethereum
  • Symbol: BEE
  • Initial value: 1 BEE = $0.14
  • Pre-sale: Sold out
  • Public Sale: Jan. 31, 2018
  • Public Sale Bonus: No bonus
  • Hard Cap: $15 million for 30% supply of the total 500 Million BEE tokens
  • Jurisdictions Barred from Participating: U.S., Canada, Taiwan, Hong Kong
  • Website: https://www.beetoken.com/

Leave a Comment