Crypto-Analysis: Brickblock

While most Projects in the Cryptosphere only allow you to invest into a digital currency without anything backing said currency, Brickblock is trying to change this and allow people with less capital to invest into new asset classes.

What is Brickblock?

Brickblock is a smart contract platform that allows people to invest cryptocurrency in tokenized real-world assets. Right now, the Brickblock Team is working on releasing the world's first tokenized building, which will be sold during Q2, a couple weeks after their ICO. Afterwards they plan on enabling people to invest into exchange-traded funds (ETFs), coin-managed funds (CMFs) as well as coin-traded funds (CTFs) by Q3/Q4 of 2018. Each asset is going to generate its very own Proof-of-Asset (PoA) Token, which legally entitles its owner to the profits of the underlying asset.
This allows people invested in Cryptocurrencies to further diversify their portfolio while at the same time minimizing the inherent volatility of crypto assets by backing each token with a real tangible asset.

What does Brickblock do better than other platforms?

Compared to legacy platforms, Brickblock benefits by utilizing the Ethereum blockchain for its transaction which in return leads to an absence of geographical restrictions and faster transactions. The tokenization of assets such as real estate also lead to a much lower entry-barrier, since investors don't require the capital to outright buy an entire building or flat, and thus allowing a lot more people to invest in new asset classes and allow for further diversification of their portfolio.

Compared to other crypto backed platforms Brickblock has the major benefit of having filed a legal prospectus for regulatory approval, meaning that Brickblock is on its way to be 100% compliant with existing laws. Seeing how regulatory compliance is going to be key to attract institutional investors and guarantee future safety for early investors, this has to be one of, if not the most important component to ensure success for future crypto projects. Furthermore the tokens available on the Brickblock platform will be stored in the Brickblock token contract, which is based off of the ERC20 token contract from OpenZeppelin, who are widely regarded as having the most secure and well-audited contracts in the industry. A successful audition from ConsenSys Diligence, a leader in the blockchain industry, further ensures that the funds stored on the smart contract are as safe as possible.

The Tokens
Brickblock is going to launch a total of three different crypto assets, which will primarily be traded on its very own platform.

First off we have the BBK Tokens which operate somewhat similar to NEO. The BBK tokens can be staked on the Brickblock platform in order to generate ACT Tokens. These ACT tokens are Brickblocks own version of GAS and thus powering the platform itself. Every single transaction on the Brickblock platform will require a transaction fee of 0.5% by the respective investor to be paid in ETH. People who own and stake their BBK tokens will get access to buy orders for their ACT tokens, allowing them to sell off their generated ACT tokens for ETH. Alternatively, BBK tokens can be "deactivated" (aka not staked) and be sold off on different exchanges.

The final tokens available on the Brickblock platform will be the PoA Token, or rather a multitude of PoA Tokens. As mentioned earlier, these Proof-of-Asset tokens entitle its owner to the profits of the underlying asset. As such each and every asset will generate its very own PoA token.

Roadmap


As of right now the Brickblock project has a lengthy Roadmap spanning from its humble beginnings back in 2016 all the way to the end of 2019. While the project itself is, as of writing this article, still in its ICO phase, the team has already announced that it will launch the worlds first tokenized building in a matter of weeks. Further goals include selling ETFs and Coin funds on the Brickblock platform by Q3/Q4 2018, enable US investors to participate on the platform by Q2 2019, allowing a wide variety of FIAT funding during Q3/Q4 2019 and further expansion across the globe, reaching about $100 million in tokenized investments by the end of 2019.

As such there is a lot of opportunity for early investors of the BBK Token to gain considerable profits since the price of the token will primarily be dependent upon the amount of transactions made on the Brickblock platform. On the other hand, PoA Tokens growth in value will depend a lot more on the underlying asset and as such experience a slower increase in value while suffering from far less volatility.

Team

The team behind this ambitious project looks very promising:
The two Co-founders consist of one expert in the field of real estate with over 10 years of experience and one blockchain expert, having founded some of Europe's top blockchain companies including Transistor Coworking, Bitwala and Bitcoins Berlin. The remaining four core members show similar expertise, having worked as a legal Counselor for Lionsgate, Digital Expert and External Advisor at McKinsey or Head of Mobile Marketing for Jumia.
While this might not be considered as an "All Star Team" by some, these six core members to have sufficient expertise in the areas necessary to make a project like Brickblock a success.

Token Metrics

In total there will be a maximum potential supply of 320 Million BBK Tokens of which 145.5 Million will be in circulation. Of these 145.5 Million tokens however, only 75.5 Million will be sold during ICO meaning there's about 70 million tokens not available during the ICO. Of these roughly 1.7 million tokens have been allocated to a massive airdrop campaign in order to get more attention towards this project.

During the sale of the world's first tokenized building there will be a bonus where investors will get not only PoA tokens but also BBK tokens at the same. However, none of the first three building currently listed at the Brickblock homepage have a large enough funding goal to warrant so many additional BBK tokens.
This therefore leads me to believe that the remaining 60 million+ Tokens could be sold during an additional funding stage, either sold to the public or to more private investors.

All in all, roughly 51% of all BBK tokens will be allocated towards ICO contributors, with all unsold tokens being burned, 35% being used as a company reserve, being vested over a 3-year period, 13% belong to Early Backers and Private Investors and the final 1% is allocated to the aforementioned Airdrop.

Brickblock is following a three staged ICO model, with each stage following a very specific goal:
During the first step, funds were initially raised to build the core team, during the second stage funds were needed to develop a minimum viable Product and during the final stage (which is happening as I right this article) fund are raised in order to complete the product and expand the portfolio of assets.

During these three stages the total hardcap was set at about $50 Million. So far $11.7 Million have been raised during all three stages and I highly doubt that the remaining funds will be gathered during the final day of the ICO. As such I expect a far smaller circulating supply and potentially a fourth stage to further expand the product if needed.
However, a smaller circulating supply in itself isn't necessarily bad since this pretty much means that the asset itself has more room for growth.

If we take a look at the three different markets Brickblock is trying to tackle, we can see that not only are we talking about the §217 Trillion Real Estate market but also the roughly §30 Trillion ETF markets as well as the Coin Fund market (for which I sadly couldn't find any estimates about the total market cap)
If we assume that Brickblock manages to gain a total of 1% market share in both Real Estate and ETFs, we're looking at a §2.5 Trillion project.
Of course, such an insane valuation is going to take a long time, I suspect such an enormous growth would at least take between 10–20 years, but at least this shows how much potential there is for such an ambitious project like Brickblock.

My Investing Strategy

I personally do not plan to invest in the ICO itself. While I am a big fan of this project I do think that there's a much more lucrative way to invest my money on the Brickblock platform: I'm talking about the sale of the first tokenized building.
Since the amount of money invested will not only be converted into PoA but also BBK tokens on top of that, this allows me to double my investment with next to no effort.

Reading Material
[Check out the official website] (https://www.brickblock.io/)
[A guide to understanding Brickblock's token structure] (https://blog.brickblock.io/brickblock-token-structure-guide-711813b7a3b7)
[General Whitepaper] (https://www.brickblock.io/Brickblock_General_Whitepaper.pdf)

As always, this is not financial advise and you should most definetly do your own research before investing any money into any crypto assets.