Passive Income from waste. 4New Post ICO review.
September 23, 2018
4New collects waste for a fee, then burns it in a combustion chamber to create electricity. Then it will use the electricity to mine for cryptocurrencies or sell it on the grid. The price of selling electricity on the grid in the UK is $0.05 per KW while if used for mining can earn $0.2. Mining requires special hardware and specialists. This solves the problems of waste management, as it reduces it to ash. The ash does not get pumped into the air but sent to the waste dump. BioConstruct have been subcontracted to build the plants one project in AVG imperial Park Middlesborough and Bioconstruct Hartlepool to potentially another one in Puerto Rico.
4new is an interesting proposition to the passive income Investors. However it is important to diversify, this reduces risk. There are options, both in the cryptoverse such as staking, masternodes and in the traditional investing with stock dividend portfolios or real estate.
What is KWATT?
The KWATT represents a fraction of the company’s mining capacity/electricity production.
The profit generated from the plant’s commercial activities will be shared by the token holder pro-rata. Token holders need to stake their tokens, it is only when staked that the token holders can claim their ROI. The tokens are staked for six month periods after which they need to be re-staked. Read More: Tokenomics of Crypto Passive Income
Pros / Opportunities
- The lifetime of a power plant is around 50 years, that means that the token holder can enjoy 50 years of passive income.
- 4NEW is based in the UK; this has strong property rights and the rule of law. i.e., there are means to pursue the founders legally if need be.
- They are planning to buy an additional power plant in St Lucia, which diversifies and reduces the risk exposure away from the UK.
- Parts of the profits will be reinvested, which means that the ecosystem will strengthen itself in new investments. Especially because mining needs to be continually upgraded.
- There have been multiple video interviews of the team, and it is reassuring when real people show up talking about an ICO project.
Cons / Threats
- It seems two team members are related, which per se is not a problem. However, was this recruitment done by skill or realtionships?
- Staking should comment on the 1st of October, interestingly any funds generated before this date will not be distributed to the token holders.
- There was no disclosure about the bonuses received by institutional investors during the ICO. The mega price drop is probably because of these whales have been dumping. It could have been better if they were transparent about this.
- There are operational agreements on how much dividends will the share holders receive; this is important because they are served first then the token holders after.
- There has been no disclosure of the salaries of the founders or team, which means the final profit can be easily manipulated.
- If there is an economic decline in the UK due to Brexit, there could be a reduction in waste production. The extent of which is impossible to predict. There is a risk that the source of fuel does not remain as plentiful as it is today. 4New are looking into expanding outside the Uk which will mitigate this risk.
- Bitcoin mining difficulty has been on an upward trend, this means that the ROI on mining is declining.
- There is an ongoing discussion in the crypto community Proof of Work (high energy mining) vs Proof of Stake (very low energy mining)
- Other projects involved in mining: Envion , Gigawatt , ICE ROCK MINING , Ambit Mining and Genesis Mining
- Token Name: KWATT
- Toke Type: ERC 20
- Collected during the ICO: $40 million
- Token price at ICO: $2
- Token price as of 23/09.2018: $0.03
This project seems to be going in the right direction, but there need to be more confidence-building measures. Regarding financials, there are two important points of transparency. The first is the differences between the rights of shareholders vs. that of token holders and secondly communication of board decisions on dividends distributed to shareholders. Regarding the passive income part, all investors are eager to learn what will be the actual returns on their investment. ICO investor will have very poor ROIs if prices remain this lo,w. Buying in at these prices gives the late investor an opportunity for a better passive income ROI than the earlier ones. There are many threats for this projects, but the team seems to be going in the right direction – time will tell us if their decisions will benefit the token holder.