Overview of 300cubits and the TEU token:
300cubits is a new (apparently Hong Kong based) blockchain company who aim to solve some of the biggest problems of the global shipping industry. Right now, overbooking by cargo companies and last minute cancellation by shippers has reportedly led to losses of 23 billion dollars per year! 300cubits aims to solve this problem by using smart contracts to lock up collateral in the form of their TEU tokens which ensures both parties against the bad behavior of their counterpart. If a cargo company overbooks, and can't ship a customer's goods, then the TEU token locked up in a smart contract will automatically be credited to the customer. Similarly, if the customer cancels their contract at the last minute, the cargo company will then be credited with the TEU tokens, and will be able to avoid the loss they otherwise take due to empty space on their ship.
The company plans develop a set of several modules to reach their goals. The modules outlined in the whitepaper are as follows:
- Smart Contract Builder Module - Through this module users without coding knowledge will be able to create smart contracts tailored to their shipping needs.
- Booking Module - This module will be a web and mobile app through which customers can book with cargo companies.
- Market Place Module - This is a secondary DAPP marketplace through which users can buy or sell contracts. In case due to unforeseen events a user is unable to fulfill their contracted obligations, they can use this module to sell their contract to another user who is able to fulfill it for them.
- Positive Credit Agency Module - This module contains a searchable history of all past contracts and credit scores associated with each user. This allows other users to identify trustworthy partners.
Token metrics:
300cubits plans to issue 100,000,000 TEU tokens to be distributed as follows:
- Pre Initial Token Sale (“Pre-ITS”) 2,000,000 TEU 2.00%
- Initial Token Sale (“ITS”) 18,000,000 TEU 18.00%
- Second Token Sale 20,000,000 TEU 20.00%
- Marketing & Development 54,000,000 TEU 54.00%
- Founding Team 6,000,000 TEU 6.00%
While it's initially encouraging that only 6% of the TEU tokens are reserved for the founding team (and locked up for 2 years), it is potentially concerning that 54% of the tokens will be kept with 300cubits for marketing and development. The way they choose to deal with the tokens on the secondary market to generate their operating funds could devalue the 40% of the tokens sold during the public token sales. I wonder how investors can feel secure that their TEU tokens will not be devalued if 300cubits decides to cash out a large portion of their tokens to pay for their marketing budget...
Team:
The team is headed by three co-founders, Johnson Leung, Jonathan Lee, and Eugene Kim. Johnson Leung has a long history in the shipping industry, while Mr. Lee and Kim have strong backgrounds in banking and finance. On the tech side are Tim Choy, Hong Chan, and Kant Chan. According to their bios, they each have over 10 years of experience working in IT ( in development, project management, and consulting), although there is no link to their Linkedin profiles. They list a panel of 6 advisors with specialties in finance, logistics, consulting, and business management. One area in which the team is apparently lacking is blockchain development experience. None of the team appears to have previous experience working on blockchain based projects, which is potentially a red flag.
Key Strengths:
- This is an ideal use case for distributed ledger technology - one where both parties can reduce risk and eliminate the need to trust each other since their agreement will be backed up by collateral locked up in a smart contract.
- Credit scoring on the blockchain (Although as mentioned in the whitepaper, this is primarily useful for identifying those with good credit, those with bad credit may simply use a new ETH address. I think perhaps some feature could be implemented by which the identity of the company or individual is stored on the smart contract so that even if they switch to a new ETH address there will still be a record of them as long as they are going by the same name).
- Leadership includes shipping industry insiders which will hopefully help with promoting adoption.
Questions and concerns:
- How to deal with the volatility of TEU tokens while they are locked up in the smart contract?
- What's the incentive to use TEU? Why not just use some other cryptocurrency locked up in a smart contract? Will the modules be limited to only use TEU?
- How do customers' and cargo companies' actions get logged on the blockchain? How can accurate reporting be ensured? How will arbitration be handled if there is a conflict of reports?
- I'm concerned about whether or not the industry will want to adopt this system. 300cubits plans to distribute TEU tokens to industry players in an attempt to incentivize them to use the system (since use of the system should increase the value of TEU tokens), but this is still a concern.
- The team doesn't seem to have much blockchain/cryptocurrency expertise, will the team be expanded to include new members with relevant experience?
- Homepage has some display bugs...not a problem with the project per se, but looks careless.
- Is there any competition? What alternatives might the shipping industry use? I don't see this mentioned in the whitepaper.
Conclusion:
The problem 300cubits is seeking to address is one for which blockchain is especially suitable - a lack of trust between two parties in a contract. The solutions they propose could potentially save billions for the shipping industry if they function as outlined in their whitepaper. However, as a potential investor in the TEU token, I would be cautious of their token metrics, how they can ensure accurate reporting, their lack of experience working in blockchain, and a variety of other questions I've outlined above. I think they could potentially be the answer to some of the shipping industry's woes, but I'm not quite convinced yet.
Links:
https://300cubits.tech/
https://300cubits.tech/pdf/whitepaper.pdf