We recently published a review of the Blockshipping ICO, a project which is aiming to use blockchain technology to shake up the global shipping container industry.
In that article I mentioned that they will be offering a token with a payout, whereby holders of the token will get a share of Blockshipping’s revenues.
Well the news is now even better — they have just announced they will be increasing the token payouts, so the project looks even more attractive.
Below we’ll take a look at what exactly has changed, but firstly let’s do a quick recap of what the project is all about and how the token model will work.
Currently the shipping container industry suffers from widespread inefficiencies and is ripe for disruption by a player with the requisite knowledge and skills within the field.
At the moment, whilst the industry is worth an estimated $12tn per year (yes that’s 12 trillion dollars), there are significant issues to be addressed that could improve the way it operates.
For instance, currently there is no tracking system for all the containers, meaning companies often don’t know exactly where their containers are and miss out on utilising them to maximum efficiency.
At the same time, many containers are left empty or half-empty for a journey and instead could be used for cargo — saving space and money. Many other processes such as payments and filing are still done mainly using paper and old technology and could be greatly improved with digital and blockchain technology.
Blockshipping are proposing to solve these problems with the following innovations:
All in all Blockshipping estimate that these and other changes they are planning could save the industry over $5.7bn per year, as well as reducing global CO2 emissions by more than 4.6m tonnes annually — very significant savings indeed.
There will be two tokens issued by Blockshipping. They have chosen to issue two tokens after having seen what happens to other tokens that become popular on exchanges, increasing so much in value that they are no longer practical to use for their original purpose. So by splitting functionality into two tokens, they will ensure they don’t suffer from that problem.
Internal Token — CPT
Essentially they will have one token that is used internally on the platform to make payments — that will be the Container Platform Token (CPT). Only those using Blockshipping’s services will be able to access the token and it will be run on an internal blockchain. So it could be used to pay for anything from the maintenance and repair of containers to transporting them by rail or yard costs. The price will be fixed at $1 per token.
External Token — CCC
The other token — and the one we are more interested in — is the Container Crypto Coin (CCC) and that is the one that will make payouts to token holders from the revenues generated by Blockshipping’s operations. It will be an ERC-20 token on the Ethereum blockchain.
It will not be possible to use the CCC on their Global Shipping Container Platform (GSCP) at the start — although they say they have some ideas for using the token on the platform at a later date.
So its role will initially be to raise funding for Blockshipping via the ICO and then to reward holders with a share in revenues, as well as to potentially be used to fund acquisitions for Blockshipping later.
They plan to pay out the revenue in CCC tokens via a reverse Dutch auction model (once all the CCCs are used up), which although quite complicated in its operation should ensure liquidity and that the price of CCC tokens holds up for distributions.
The rewards were initially planned to be based on a sliding scale, but Blockshipping have just announced that the reward model will now be much simpler.
Instead it will simply be that if revenues are below $30.8m, the CCC owners will be rewarded 20% of the revenue. Thereafter, 3% of revenue will be distributed to CCC owners.
The previous model included for example that if revenues exceeded $2.5m per month, then the revenue share would be just 1%, so this is a considerable improvement.
This is estimated to increase the potential ROI (return on investment) from what would have been 10% p.a. under the old model by 2022 to over 19% by 2022, so in effect almost a doubling of the ROI.
Market Maker Fund
Blockshipping will also provide a market maker fund such that if after the ICO (and before the first phase of their solution is launched), the price of the CCC token falls below a certain level then holders will be able to sell their tokens back to Blockshipping. Thus there will be a safety net for investors.
The token model for Blockshipping has been carefully thought through and should mean their platform is able to function effectively without the risk of wild price swings in the core token used on the platform, whilst at the same time having a separate token that will reward token holders with a share in revenues and that could potentially increase in value.
Of course it remains to be seen what those revenues will be, but it is welcome that they have decided to increase the portion that will be shared with token holders and this increases the attractiveness of what was already looking like a strong project.
So if they can execute their plans successfully then this could be quite a good token to hold and receive regular payouts from.