Published on March 12th, 2018 | by Michael Barnard0
WePower Renewables Cryptocurrency Funding Platform: 5 Questions
March 12th, 2018 by Michael Barnard
WePower started in Europe but has recently expanded to Australia. Its premise is that you can raise capital using their platform by pre-selling commitments to produce electricity. Currently, its model is commitments of 1 KWH and is represented by the WPR token. This allows a common hub similar similar to Kickstarter or GoFundMe but with a clear revenue model and focus on renewable projects. It’s easier to find investors if the investors are on a single platform. WePower’s first client was a 1 gigawatt Spanish solar farm, secured in July of 2017.
What is the governance model you have put in place to ensure your offering is not misused or abused?
We are building on a public blockchain so we are using the governance model built in it. Our WPR token is a ERC-20 token and runs on the Ethereum blockchain. For our internal energy token we are testing a few different solutions to find the best balance between the needed functionality and scalability for each of our roadmap stages.
What is the incentive model you have put in place to balance value across the set of blockchain participants?
Our main goal is to create an ecosystem where green energy producers, energy traders and buyers as well as crypto community could all work together and benefit from each other. Our WPR token (the ICO token) carries multiple values: a) it provides access to the energy donation pool, which is filled by energy donations from project developers on-boarded on the platform; b) it is a tradable crypto token with high trading volumes and good liquidity into the crypto market; c) it also gives priority access to the energy actions ran on the WePower platform. With such system energy producers can contribute to the platform that helps them raise funds in a more efficient way, energy buyers and traders can get into the auctions with the best conditions and crypto traders can use the WPR as an asset that carries liquidity into crypto as well as energy trade markets. The WPR token works hand in hand with the internal Energy token where both benefit each other.
How are you hedging against significant reductions in cryptocurrency value as seen in Q1 2018?
The WPR token is linked to the energy contribution pool, which holds liquidity into the energy markets as well. This can be seen as a hedging option simply because if a holder is not fine with the crypto market volatility of performance, there is also an option to sell the tokens as energy. Generally, when it comes to value reductions in the market, I would not see it this way. The total market capitalisation of the industry is back to the early December numbers. Yes, there was a large gain but then there was a correction all happening in just a few month period. I would say it is a highly volatile market. This is why we have designed our token to have liquidity into this market for the risk-tolerant and also the energy market for the more conservative individuals.
Is proof-of-stake an end-state consensus approach or an intermediary step like proof-of-work, and if so, what consensus approaches do you foresee dominating?
None and all at the same time. I believe that the consensus model is an important part of token and value transfer design. There are some projects that for example work on decentralised file storage solutions that have a very natural fit with the proof-of-stake models. Other projects that focus more on the value store solutions probably will benefit more from the already proven proof-of-work model with all its pros and cons. I believe that the domination of certain approaches over others will not be driven by the approaches themselves but more by the popularity of products that are built on them. For example, if decentralised storage will become the dominant blockchain business application, then probably the proof-of-stake will become the dominant consensus mechanism.
What key metrics or key performance indicators do you consider critical for your offering and business model?
The key metrics and focus areas change as we grow and discover new better ways of realising our goals. For now we are focused on the total generation capacity of the green energy development projects as well as the share of the financing we can facilitate. We also see geographical coverage of the key areas we operate in and infrastructure partnership count and depth as very important indicators to our business. As we move forward, we also will increasingly be focusing on the trading volumes of WePower Energy tokens within our platform.
As an early mover, what one piece of advice would you give to people consider entering the Cleantech blockchain space in the coming year?
I think one of the key aspects of our success so far has been driven by the fact that we have spent a tremendous amount of time structuring our experience and knowledge of the energy industry and financial markets; also, really thinking through how the token mechanics of the WPR token should be designed in order to align and create value for all parties in the ecosystem. So my advice would be to really focus on building a really well developed concept that would take the opportunities and limitations of blockchain and token economics in mind. To me, this is the key factor that separates potential projects from a big mass of little thought through ideas.