Private money — the case of Blockchain + smart textile for horses.

Apr 12, 2018

INVENTION

EHO is a team of two scientists, researchers and inventors, who patented smart textile technology back in 2015 and were joined by two entrepreneurs to make a successful product out of this innovation. First of all, what is smart textile? It is usual textile, which embeds sensors into the fabric. The sensors measure pressure or stretch and transmit data to a mobile device. The field of application is immense, from smart socks helping you to improve your walking and running habits or to track your seating and standing time, to any sports or art e.g. piano or violin playing, where posture is the key to the mastery.

EUREKA!

Owing to their meeting in Green Technology Incubator the team was looking for a smart textile application, which would benefit the ones with the biggest necessity. “How our invention can empower the ones, who are speechless about the pressure they feel?” was the co-founders questions during multiple brainstormings. Well, it took Oskars, the CEO a hiking trip with heavy backpacks when he was adjusting the backpack telling “Damn, I feel like a laden horse and this backpack had its straps misaligned, my back aches now! And what if … somebody feel just like me, but can not tell about it?” It was Eureka moment and the team decided to explore the area of smart textile application to animals, specifically to horses as these luxury animals endure a lot of pressure from multiple fittings under extreme conditions in racing

Soon team realised that they could not find a better industry. There are 60 million horses worldwide comprising an industry worth 300 billion dollars with emerging markets like China demonstrating the growth of 1,500% in horse clubs within few years. What concerns the specific application of smart textile to horses then it turned out that saddles, which may cost north of $10,000, need a profession in its own called a Saddle Fitter as it addresses a huge problem for horse industry as misfit saddle results in costly treatments, low performance and injuries both to the horse and the rider.

STARTUP MODE

Innovation was warmly received by the horse industry with several Saddle Fitters joining the project as advisors and evangelists both in Europe, US and Australia. EHO team has won admission to top startup incubators and accelerators in the Nordic region as well as City Mayor prize as the most innovative product, but it still lacked funds for product development and going to the market. Seeing some local startups helped by Scandiweb to fundraise through ICO, Oskars has connected to its founder Antons Sapriko. Antons has long-lasting interest in tokenisation and EHO looked to him as a perfect case for tokenisation of something that does not necessarily live on the blockchain. To Antons EHO resonated with the message of Bancor and myriads of small private money networks serving its cause, community or a project. Then the concept of private money was born to power all the sales of value generated by smart textiles patented technology.

PRIVATE MONEY AS CROWDFUNDING VEHICLE

“For me the concept of private money and channelling all sales of the company through the token is a break-through concept that can completely change the world we live in”, shares Antons Sapriko, the CEO of Scandiweb and adds “while conventional ICOs usually represent a sale of a fraction in a protocol, what if we extend the concept of protocol to include off-chain interactions? What if we just look at any company as, say, Disneyland, which issues its private money to finance the building of the infrastructure and all the rollercoasters and then commits to issue tickets only in exchange for its the private money that was sold during ICO and proceedings were used to build everything according to the plan.

Specifically for EHO, the company commits to using proceedings from EHO tokens sale for product development and marketing. Then all products, mobile app premium features and any other generated value will be sold only for EHO tokens. In case, there is no viable, cost-efficient (mind Ethereum transaction fees) or user-friendly way to pay with tokens, the company will accept fiat, but on a segregated account. Proceedings on this account will be periodically channelled to the exchange for the purchase of EHO tokens without regard to its price starting with the lowest sell positions.

NUMBERS AND POTENTIAL OF DATA

The EHO company is raising $1,750,000 in its ICO and let’s say their smart textile solution for saddle costs $1000, so under Kickstarter mode, EHO would need to produce and sell below 2,000 smart saddle pads and it will get all its tokens back. In reality, however, the token price may go up and then after selling some 2,000 products EHO would still have outstanding tokens worth more than one million dollars. Can it sustain itself shipping more stuff for tokens? Absolutely! Demonstrating such great results, EHO can introduce tokens it got from its customers (directly or by exchanging received fiat) to the exchange, thus, EHO gets an access to immediate liquidity and financing maintaining circulation of tokens.

Even capturing negligible 0.5% of the horse industry, EHO would produce $300 million worth of merchandise and it is not the limit. EHO smart textile so far is the only gateway into the measurable data about how the saddle fits, riders position themselves on the horse and how these data changes dynamically with horse growth and further training. EHO is potentially positioned to become the only source of the data so valuable for thousands of horse owners, sports clubs and horse industry service providers. Needless to say that this data or marketing opportunities to the “right horse” will be distributed only for exchange of EHO tokens thus strengthening their value even further.

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