There is a schism at the heart of the cryptocurrency community. Not just among investors, but also developers and start-up owners. If you were to be overly dramatic you might even refer to it as an ideological war.
However, the simple reality of the situation is that people disagree on the aims and direction of blockchain technology; not only the best application of the technology, but the potential impact of the technology on the world as a whole. The differences can be split generally into two camps.
On the one hand there are the true ideologues, those who believe in freedom from governments and regulation and wish to see the ivory towers of the banking institutions come tumbling down, beckoning a new, freer financial dawn. On the other side there are those who instead see integration of blockchain technology into existing regulatory and financial frameworks as the most likely outcome. They see blockchain is a technology that can improve not only the financial world, but also governmental and business functions. And not only that, the banks are too big to simply disappear. It is much more likely that they will instead use the best of the technology to improve their existing systems and functions.
Of course, as with most competing ideologies, the answer most likely lies somewhere in the middle. Blockchain – and especially Bitcoin – will undoubtedly provide greater financial freedoms, but it will also alter and improve existing functions across a myriad of industries. Indeed, we don’t yet know just how great its impact will be.
The relevance of the above is that where you as a person fall on this ideological spectrum will likely dictate whether or not Mobu is a project that appeals to you: if you want the blockchain to circumvent regulations then you probably won’t like it, and if you see the embracing of regulation as crucial to ushering in mass adoption then you probably will.
Because Mobu is all about regulation.
Specifically, Mobu seeks to operate as a platform to enable companies to create and distribute security tokens; to help such companies raise funds through the issuance of security tokens by helping them to comply with and jump through the numerous – and necessarily onerous – legal and regulatory requirements of such an offering.
Security tokens differ from utility tokens in that they play no functional role (i.e. have no ‘utility’) in the operation of the company issuing the tokens. The supposed inherent value of utility tokens is that they are necessary to participate in the dApp or the blockchain to which they belong and, therefore, the more people that wish to participate the more demand there is and the price will rise.
Which, assuming you don’t make any of these mistakes, will be very nice.
On the other hand if the value of a utility token doesn’t rise, and you aren’t wishing to, say, sell a piece of art at an auction or purchase trading advice, then you could end up with an asset that is worth nothing to you and too little to anyone else for you to see the value in selling it (i.e. you’re left ‘holding bags’).
The key benefit of security tokens is that they convey upon the holder ownership rights, voting rights and the right to participate in any announced dividend (but not the right to a dividend, because a company is not obligated to declare a dividend). Whilst one security token will not make you a millionaire in the same way that owning one share in Apple will not allow you to retire, holding a number of them could make dividend payments worthwhile, not to mention the sell-on value should you wish to cash in on your investment.
Mobu wishes to bring the fundraising power of ICOs and align that with the regulatory requirements of Initial Public Offerings (IPOs), the function through which securities are generally issued to the general public.
To comply with the stringent regulations, a person wishing to purchase these security tokens will have to pass KYC. They will then be verified and able to use the Mobu token to purchase said security tokens, and will only be allowed to trade the securities to other verified users. Clever.
For a company to launch a security token, they will also have to pass KYC. However, they will then also have to pass and comply with the numerous legal requirements and it is here that Mobu earns its money: they will have a panel of legal representative who can place tenders (i.e. bids) on how much they will charge the new company to complete the legal and regulatory due diligence for them.
This, along with the platform itself removing many of the banking middlemen, will enable Mobu to save companies money (between 7-10% of funds raised in an IPO are spent on the costs of holding the IPO), which will make the platform attractive to companies. Add to this the fact that Mobu tokens must be used to purchase security tokens, and it is easy to see whence they hope demand for and value of the Mobu token will be derived.
Before discussing Mobu’s roadmap, there is an important point to make regarding Mobu’s approach to the roadmaps of the ICOs they host. To protect investors, Mobu will “lockup” the funds raised and will release them to the issuer of the ICO in tranches over a 2-3 year period. Should the ICO issuer fall to meet the targets laid out on their roadmap, then investors will have the option to have their investment refunded to them on a pro-rata basis. This extra layer of protection for investors, above and beyond the regulatory requirements, is designed to provide a higher ROI over the long-term.
And now to Mobu’s roadmap.
There are two phases. Firstly, the two stages of the ICO. The Pre-ICO – currently running until 15 September – and the main ICO, running from 1 December 2018 to 31 January 2019.
The second, more substantial phase begins 1 March 2019, by which point Mobu is committed to being listed on a crypto exchange. Past this, there are two elements set in stone (Mobu’s beta platform by 1 July 2019 and a gold mining company being listed on Mobu by 1 October 2019) and then three elements that are contingent upon the amount of money Mobu raise during the ICO, as follows:
$10m – Mobu will develop the world’s first – so far as they are aware – Forex ICO. Moreover, Mobu will retain 20% of the tokens as part of their strategy to ensure token scarcity.
$20m – Mobu will develop the first crowdfarming ICO, whereby investors will purchase areas of land and will then be sent the product produced on the land they own. Again, Mobu will retain 20% of the tokens to ensure scarcity.
$30m – Mobu will develop a crypto exchange specifically for the trading of the security tokens issued on the Mobu platform. The idea behind this is to guarantee liquidity for investors in security tokens. As only verified parties will be able to purchase the tokens, this is a necessary step.
This does in itself highlight a potential limitation of the Mobu platform. If Mobu fails to raise the necessary funds to develop the security token exchange then it is unclear whether or not there will be any other method through which purchased security tokens can be traded.
Regardless, it will be interesting to see if Mobu, when considering the stringency of their approach to ICOs run on their platform, will meet their own map points.
The Mobu token will be hosted on the Ethereum blockchain and there is a maximum token supply of 350,000,000 MOBU (the Mobu symbol). This amount falls nicely in the goldilocks zone and, moreover, the number of tokens in existence will be determined by the number sold during ICO, with no more ever to be mined. Should only 50% of the hard cap be reached, then the total token supply will be 175,000,000 MOBU. Again, this is part of Mobu’s strategy to ensure token scarcity and thereby provide value to investors.
Each token costs $0.15, meaning that, should all the tokens be sold during ICO, there will be a notional value of $52.5m.
The Founder and CEO, Juan Engelbrecht is not a tech guy, having an accountancy degree and previous experience as an equity trader and director of various asset management funds. Not a massive issue as MOBU is itself a trading platform, and therefore Juan’s experience is relevant.
The CFO, Paul Pelser is a chartered accountant by trade, with over 15 years’ experience as a tax-specialising accountant, before working at a mining (like coal and gold, not crypto) company as a CFO for six years. Again no blockchain experience, but again relevant experience.
The CIO has no LinkedIn page, but that might be because he is old rather than fictitious and, as every other member of the team has a LinkedIn profile, is not particularly a red flag. MOBU’s website states that he is a finance professional with “over 30-years’ experience over a broad range of the South African investment markets.” Fair enough.
The CTO is Frederick van Bijon, who has a listed track record of software development dating back to 2004. However, his long and storied history is conspicuous by the absence of either a company we’ve heard of, or anything involving blockchain. That is not good from the Chief Technology Officer.
Mobu have collected eleven advisors in total, spanning a range of disciplines, from business development to blockchain to legal advisors. Of special mention is David Drake, of LDJ Capital, who has previously advised on successful ICOs such as Naga, Quantstamp, Polymath and others, which have combined raised over $300 miliion at ICO stage. Considering how important it is for the development of Mobu that they reach $30 million investment, his experience will be crucial.
Whilst, at this very early stage, there is little hype surrounding Mobu, they certainly have an exciting idea. The ability for companies to raise money through the selling of security tokens on the blockchain - and the requisite cost savings and access to a wide range of investors that go along with it - will be extremely attractive to businesses. The crucial element here will be Mobu's ability to deliver on their promises and prove to the securities market that their platform works and that the legal and KYC representatives they employ will be able to help them to navigate the regulatory and legal minefield that is the issuing of a security token.
Achieve that and then anything is possible. Anything.