WePower is proposing a blockchain-based green energy trading platform that directly connects producers to consumers.
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What does the company/project do?
WePower is proposing a blockchain based green energy trading platform that directly connects producers to consumers.
The most important mechanism of WePower’s platform is allowing producers to tokenize the clean energy they create. These tokens (different from WPR) will represent 1 kWh of energy to be produced in the future and are a contract between the producer and consumer.
Through this tokenization of renewable energy, WePower aims to allow renewable energy producers to pre-sell their production on a global scale and obtain necessary capital to increase their profitability.
This will tackle a huge issue in today’s clean energy markets, as the unique regulatory framework in Europe keeps competition high and does not provide a market for open connection to the energy grid.
As a result, the investment ecosystem for global renewable energy will be simplified and open to more consumers. Investors will also benefit from better energy investment terms (lower costs & higher liquidity) as well as access to clean energy projects worldwide, making green energy a more appealing asset class.
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What are the tokens used for and how can token holders make money?
WePower has a 2 token system (WPR token and energy token worth of 1 kwh). With WPR token holder will be able to receive 0.9% of energy tokens produced by renewable plants. 1 energy token equals to 1 kwh.
Holders of the WPR token will receive 48 hours priority access to participate in auctions for purchasing this tokenized energy once renewable energy plants are connected to the platform. Each plant will set the minimum price per token, and both historical and current energy prices will be visible on the platform to ensure a fair auction.
In addition, WPR token holders are entitled to no less than 0.9% of tokenized energy donated directly by the renewable energy providers. The token holders have the option to use this energy, sell it before its production, or sell it to the wholesale market when it is produced.
The WPR token model is designed to provide intrinsic value to investors in the form of energy. As the platform grows and sees more clean energy producers sign up, WPR holders will be entitled to more energy over time, which should drive demand for WPR upwards.
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Opportunities
– The team is able to secure a number of solid companies agreeing to work with WePower, which helps creating supply when the platform is launched and demonstrates the team’s capabilities.
– This project demonstrates what blockchain can do and shows an innovative way to tokenize assets – in this case, energy.
– From the tokenization of energy, energy construction projects can save on fundraising costs and are able to improve the return on equity, thus they can provide more affordable energy.
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Concerns
– The energy sector is highly regulated and the landscape is different in each country. It may be difficult for different companies/governments to get on board with the idea of sharing one platform.
– Even if the project successfully hits its own growth project (which is usually on the optimistic and aggressive side), the risk-adjusted return is not high. If we apply a 25% discount rate for the energy received as stated in page 11 of the white paper and assuming ether price is $1,000, the total return on the 10 ETH investment over a 6-year period is 67%, or a compound annual growth rate of 9%. This is considered low for a cryptocurrency investment.
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Disclaimer
The information in this video is for educational purposes only and is not investment advice. Please do your own research before making any investment decisions. Cryptocurrency investments are volatile and high risk in nature. Don't invest more than what you can afford to lose. Crush Crypto makes no representations, warranties, or assurances as to the accuracy, currency or completeness of the content contained in this video or any sites linked to or from this video.
