Hong Kong initial coin offering case studies: 300 Cubits and Gatcoin
300 Cubits: A token for the shipping industry
“The challenge we have is a chicken and egg one,” said Johnson Leung, co-founder of 300 Cubits, a company in the midst of launching an ICO in Hong Kong, and hoping to revolutionise the container shipping industry.
“We need to show the shipping industry that investors think our new token, which we are calling a TEU token, has value, or they won’t take it seriously, and we need the shipping industry to use our token to show investors that it is worth investing in.”
Leung and his co-founders, who have a background in shipping and finance, are hoping to use a digital token to solve a common problem in the shipping industry. That is, container liners cannot guarantee that their customers will turn up and so overbook, meaning that on occasions customers turn up only to find that the container vessel is full. Contracts are not adhered to, and banks are unwilling to hold deposits for either party.
“Our solution is to have a smart contract using blockchain technology, which is coded with a set of immutable conditions. Once committed, neither party can alter what has been agreed,” said Leung. Both parties pay an agreed amount of TEU tokens proportional to the value of the cargo in advance, and should either side fail to meet the conditions, they lose their tokens.
This is why the tokens need to have value, and that is where the ICO comes in, or as 300 Cubits is calling it, an initial token sale (ITS).
300 Cubits conducted a pre-ITS from August 16 to September 20 when it sold 2 per cent of its tokens. A full ITS is planned for later this year, which will distribute 38 per cent of the tokens. The bulk of the rest will be distributed to participants in the shipping industry and its customers.
“The plan for the next few months is to talk to the major shipping lines, use the relationships I built up when I worked in the industry, get some of them on board, then we will be well placed for the full ITS,” Leung said.
Gatcoin: An exchange for retail reward vouchers
“What we’re trying to do is bridge the gap between the cryptocurrency world and society at large, but sometimes I feel I’m shouting into the void,” says Gatcoin co-founder Simon Cheong, who is planning an ICO in Hong Kong at the end of October.
Gatcoin is hoping to solve the problem where loyalty rewards points, issued by shops, often multiply and become hard for consumers to manage, as well as for the merchants themselves.
“Digital tokens are an obvious solution, but because of practical and regulatory concerns, shops don’t want to issue them. What we want to do is enable different merchants to create their own digital currency on our network, and then our token, Gatcoin, can be used to buy or sell the different tokens issued by the various merchants. Fundamentally it is a medium of exchange,” he said.
The ICO is set for the end of October and Gatcoin is hoping to raise between US$20 million and US$60 million to fund further development of the business.
As well as raising capital, Cheong said the ICO was also a way of distributing Gatcoin to potential merchants who want to manage their incentive systems by creating their own digital currency on the platform.
As such the ICO, if successful, would mean that a substantial number of potential users would already know about the project, and be invested in it, both in metaphorical and literal terms.
“So far we have seen substantial interest in Japan and Brazil,” said Cheong.