At its most basic level, the MOBU proposition is about offering a streamlined mechanism for companies to organise their own ICO.
Companies seeking to issue a security – as opposed to a utility – token are currently stymied from raising capital in this way by the mountain of legal, technical and regulatory requirements necessary to conduct an offering. MOBU is setting out to offer a solution which would allow these companies access to the multi-billion dollar ICO markets in an easy and compliant fashion.
The platform is adopting a decentralised model and will give companies the facility to use the MOBU smart contract as a base from which new security tokens can be developed. All securities issued through the platform will be compliant with both ERC20 and the MOBU-created MOB20 standards.
As the white-paper states, the “only way to allow institutional money to enter the blockchain” is through a “regulatory-friendly token”, and the “only way to allow non-tech businessmen to participate in the blockchain” is through a “user-friendly platform for trusted ICOs.”
Investors in MOBU-issued securities are protected through a series of failsafes and checks. They may exit after an ICO on a pro-rata basis should the ICO not live up to its promises or roadmap.
CONCEPT AND WHITE-PAPER
Dozens of ICOs were launched in the first quarter of 2018, raising billions of dollars. However, 98% of those offerings were for utility tokens. The securities market is gigantic, amounting to trillions of dollars, but has been largely undisturbed by developments in the blockchain space.
Although a security ICO may be an efficient way of raising capital, companies are put off by the numerous legal and technical hurdles. MOBU is seeking to offer a way over those hurdles for companies interested in pursuing the ICO route.
For MOBU to gain customers, it needs to offer them a solution to a problem they can’t solve themselves. The first step is to persuade them of the benefits of ICOs.
The advantages of an ICO
The MOBU white-paper identifies a series of factors which make an ICO more attractive than a more traditional IPO (Initial Public Offering).
Rather than have to pay hefty fees to middlemen such as banking institutions, ICOs allow companies to raise capital with much lower overheads. Smart contracts also lessen the need for legal and administrative services. As the technology becomes more sophisticated we can expect these cost savings to become even more significant.
Faster execution of deals
Fewer middlemen means that transactions can be conducted more quickly. This suits both companies and investors.
More potential investors
Rather than IPO in the United States and be restricted to US accredited investors, issuing tokens allows companies to dramatically open up their potential investor base.
Automated functions through smart contracts
Though lawyers may still be needed to offer advice, many of the functions they currently serve are replaceable through well-designed smart contracts.
Lower corruption and manipulation
Investments are more transparent through the blockchain, while bypassing financial institutions reduces the exposure to corruption and manipulation of the process.
The MOBU ecosystem
MOBU is creating an ecosystem for the issuance of security tokens. The white paper identifies six different user roles within the platform, interacting with each other via the MOBU token.
Issuers: these are companies planning to sell security tokens. Issuers may offer bounties in MOBU tokens to encourage developers and legal representatives to help them through the ICO process.
Developers: these are the creators and reviewers of the smart contracts. Developers are paid in MOBU tokens, though to ensure quality work these tokens will be locked for at least 3 months after the ICO’s end date.
KYC Providers: these will ensure the identities of all participants in an ICO are verified and that they have the right to invest. KYC Providers are compensated in MOBU tokens for this work. To discourage fake providers spamming the network, potential KYC providers will have to buy in to the platform by paying a MOBU-denominated fee.
Investors: will have to pay KYC providers in MOBU to have their identities verified.
Legal representatives: earn MOBU by having tenders accepted by issuers.
Escrow providers: similar to legal representatives, escrow providers submit tenders for their services and are compensated in MOBU tokens.
The below diagrams show how these users will interact within the MOBU ecosystem.
For MOBU, the rest of 2018 will be taken up with the MOBU token pre-sale and ICO, which finishes on January 31st, 2019.
The MOBU utility token will be listed on crypto-exchanges on March 1st of next year, with the beta version of the MOBU platform slated for the beginning of July.
The ICO’s plans are dependent on funds raised. Should it manage to bring in more than $10 million it will develop a forex and crypto percentage allocation money management (PAMM) ICO on the MOBU platform.
If the company raises more than $20 million then it will develop the first crowdfarming ICO. If it manages to clear $30 million then it will develop a security token platform for MOBU tokens, giving “the guarantee that all MOBU ICOs can be listed on an exchange and that in this way liquidity will be ensured.”
The MOBU team offer a wealth of experience in cryptocurrency, finance, law and blockchain technology. The core of the company, CEO Juan Engelbrecht and CFO Paul Pelser, operates one of the biggest crypto-mining operations in the southern hemisphere.
Engelbrecht, Pelser and several other team members were also involved in last year’s Zabercoin ICO to launch an asset-backed cryptocurrency. According to Engelbrecht the experience was a “valuable lesson” and part of a “learning curve appointed for a greater purpose and long-term goal.”
As one would hope for such a project there are legal advisors within the core team as well as dedicated senior positions for business development and marketing. This ICO also boasts an impressive roster of advisors and partners.
TOKEN AND TOKEN VALUE
350,000,000 MOBU tokens will be minted. Of these 80% will be made available through the ICO, with 12% going to the team and the remaining 8% split between advisors, bounty and airdrop programmes.
Businesses who wish to issue their own security tokens will use the MOBU abstract smart contract as the basis of their own tokens. This will ensure that all security tokens are compliant with MOBU’s MOB20 standards.
Token value will be maintained by the requirement that all service providers submit a deposit of MOBU tokens which cannot be withdrawn while the entity remains a service provider. In this way there will always be a certain number of tokens out of circulation, and the more service providers join the platform, the more valuable the token will be.
MOBU will charge a 1% fee to all listed ICOs in exchange for resources and support. A small fee will also be levied on all transactions in the MOBU token.
Despite the exponential growth in ICO numbers, the ICO model itself has yet to gain much of a toehold in the enormous market for security offerings. Should MOBU be able to gain some traction then it could be a catalyst for revolutionising the industry. However, the potential for securities tokens is largely untested due to the legal and technical issues holding back adoption.
MOBU will only be able to solve these issues if it manages to encourage sufficient legal and technical experts to sell their services on the platform. In its favour ,it has an experienced and knowledgeable team and group of advisors. It also has several confirmed users willing to issue tokens on the platform, including Mike Prinsloo, who plans to tokenize a mining operation, and Wayne van der Burgh, who intends to tokenize 5 coal mining sites.
If MOBU can attract enough attention, and so far they are doing a good job, then they stand a good chance of capitalising on this interest and establishing a beachhead in a vast market.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
Disclaimer: Please note that all ICO reviews on ICOExaminer are non-technical assessments, in some instances are sponsored, and are very often sentiment-based and should not - under any circumstances - be construed as professional investment advice.