Historically, the first tokenized project in the Czech Republic will concern smart electricity meters connected to the so-called Internet of Things. SimpleCell is owned by investor Radovan Vávra and financier Miloslav Vyhnal, who in the past worked for KKCG, Karel Komárek, for example.
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Smart meters will be able to be used by households and companies to optimize and monitor electricity consumption. However, they are not very widespread yet and SimpleCell remains at a loss. According to Vávra, revenues reached about five million crowns last year. In 2020, it was 4.2 million crowns and the loss reached 31 million crowns.
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However, Radovan Vávra believes in the project. According to him, he and his partner Miroslav Vybíral invested approximately 100 million crowns in equity in the company. Now they are going through the Xixoio platform, according to Vávra, for “low hundreds of millions of crowns”.
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Part of their appreciation will come from the way they persuade people around them in a ‘this is really good, get it’ style.
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“We are not looking for money. We are looking for money with a story and other parameters. We are looking for money from people who are willing to agree that part of their value will come from persuading the people around them in a ‘this is really good, get it’ style. You can’t expect this from the bondholder at all, “Vávra said at a press conference. He responded to the question of whether they did not want to use any other methods of financing.
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So it seems that they also want to use their investors as a kind of “advertising channels” through which information about smart meters will be disseminated.
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According to Vávra, the tokens are to be traded on the Xixoio platform, but it is not yet clear whether the market will be liquid, ie it will work if the investor wants to sell. “I would honestly say that we do not have it,” Vávra said.
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It is clear that the first investors will buy their tokens more cheaply than those who will want to buy later when the project starts. At the same time, SimpleCell expects profitability in the horizon of three and five years.
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I do not want the CNB to play a role in our token at all.
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The whole project is unregulated. “I don’t want the Czech National Bank (CNB) to play a role in our token at all,” Vávra said resolutely.
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“Only those tokens that are investment instruments fall within the scope of the Czech National Bank’s supervision. (…) Virtual tokens, which are not investment instruments in the sense of financial regulation, are not subject to the CNB’s supervision, “said Petra Vodstrčilová, a spokeswoman for the central bank, last week.
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“We consider it necessary to recall that when purchasing or holding tokens that are not subject to CNB regulation, the investor does not enjoy the benefits in the form of protection associated with regulated financial services,” she added.
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Revenues not from profit, but from sales
Before that, then, it will pay returns to its investors not from profits, as usual, but from sales. “Investors will have a share in sales. Investors will not wait for it to turn out, but the token will mediate the share of all sales, “added Vávra. When asked how often this profit will be paid out, Vávra did not answer.
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The company will charge a commission for launching SimpleCell tokens on the Xixoio platform, however, neither Watzke nor Vávra wanted to specify its amount.
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At present, it is not a stock exchange, although the creation of a cryptobourse is the goal of Xixoia. “Tokenization takes place on the so-called IPCO platform. In general, it is a Blockchain Banking Ecosystem and the stock exchange will be one of the modules of the whole ecosystem, “said Lenka Keehnen, the company’s spokeswoman.
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The press conference is to be followed by the so-called RoadShow, in which project representatives in various cities in the Czech Republic want to explain to the public the opportunity to participate in product tokenization.
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What is tokenization?
A token is a digital asset that is tied to a specific value. It’s similar to a classic paper contract, only it has a digital format. All other essentials remain the same. While in the traditional “paper” world we have to go to a lawyer, a notary and then a counterpart, in the digital world we can do everything online thanks to a token.
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A token is therefore a digital asset by which we prove that we own a certain specific value. It is genuine, transparent, secure and always accessible from any smart device, from any part of the globe. All you need is internet access. And all thanks to blockchain technology.
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Issuing tokens through blockchain, or tokenization, is a new trend in raising capital for company development. Previously, companies had to develop capital into a bank, or a private investor, or go to a traditional stock exchange. However, all these options are extremely expensive, administratively complex and completely unsuitable for start-ups.
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Xixoio is controlled by businessman Richard Watzke, who sells his own XIX tokens, but they cannot be traded. And it is also unclear whether the company will ever buy them back from investors.
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However, this does not prevent the company from stating on its website that the price of tokens is constantly rising. XIX is not supported by any cryptocurrency exchanges or exchange offices and their price is simply determined by the company itself.
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The Xixoio platform has been called controversial by some analysts in recent months. The Czech National Bank and the Ministry of Finance also warned against investing in similar projects at the end of last year.
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Supplement 16. 2. 2022, 17:43: We have removed the word cryptobourse from the headline and added a statement by a spokesperson about the functioning of the company, as Xixoio is not a so-called cryptoburse, although he is working on the establishment of the stock exchange.
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