SunContract Announces ICO to Decentralize Energy Market with Blockchain
| Updated by Maria Konash · 4 min read
Suncontract creates a peer-to-peer marketplace for renewable energy.
SunContract, an energy trading platform from Slovenia, will utilize blockchain technology to raise funds and bring efficiency and transparency to the energy market. The project promises to build a decentralized energy trading market.
According to SunContract’s whitepaper, in its current state, the energy market is facing challenges in the form of centralized conventional power stations that often require high costs of energy transmission over long distance. The existing electricity model with its infrastructure will not be able to cope with the increasing electricity demand that is expected to more than double by 2050. A change of the model is necessary with a shift to decentralized energy production supported by renewable energy. According to Bloomberg, over 70% of the more than $10 trillion projected to be injected into new energy sources will go to clean energy by 2040. Analog energy sources will become less and less common, demand will increase with the rise of electric cars, and so renewable energy will become the new norm.
How the platform will operate
SunContract is going to be based on Ethereum platform, on which their ERC20 token called SNC will be issued. The number of tokens created will be approximately 1 billion (depends on ETH amount raised), and the entire supply will be distributed after the token sale is completed.
The primary function of SNC token is being an intermediary for trading the energy. The focus of this project will be to constantly increase the demand for SNC tokens by increasing the trading volume inside the SunContract Energy Pool. A growing number of customers will increase the number of transactions, thus increasing the demand for SNC tokens. A positive correlation is expected between the SNC market value and the size of the SunContract network implying the economic laws of supply and demand. Income gained from platform fees will be also used for buybacks of SNC tokens which will put a deflationary pressure on the price of tokens.
The Ethereum platform brought new possible applications of blockchain technology to the crypto world. Smart contract enables transparent operating without the need for a middleman, which is cheaper. With smart contract, two opposed parties can negotiate all terms of business and write it down on the blockchain that can save businesses a lot of forwarding costs. This makes the whole process clear, transparent and irreversible.
In other words, SunContract decided to utilize blockchain technology because it fits perfectly into the renewable energy sector. Blockchain enables direct (peer-to-peer) services closer to consumers and producers and offers transparency and local energy self-sustainability.
Sources of energy used
Nowadays, the most used sources of electricity generation are conventional fossil fuels which are all extremelly polluting. One of SunContract’s goals is to speed up investments into renewables such as the sun, wind, water, biomass etc. The sun is considered to be the greatest source of energy available to everyone. Therefore it can become the main electricity generator for future needs. Nowadays, there is no actual need for government grants to keep solar power plants competitive on the market since solar panels are becoming more efficient and endurable. Also the development of storage capacities is getting its new wave with the adoption of electric cars. In the future, batteries will be used for storing energy when there is a surplus in production during the day for use during the periods when there is no sunshine.
Current state of the project
It is to admit, that the project itself is of incredibly ambitious character, expesially as far as ICOs (initial coin offering) go. It involves dozens of challenges – from legal hurdles, building the network, interconnecting generators to interfacing with outdated electricity grids, and so forth. It is monumental in scope, and therefore needs a suitably high amount of raised capital to get off the ground and running. At press time $1,338,466 (5,611 ETH) has been contributed so far and there is still slightly more than 6 days till the end of the croudfunding campaign, according to the project website’s data.
50% of the raised funds will be appointed for further development, 25% will be used for marketing purposes, 15% for operations and 10% for legal matters. Out of all tokens issued after the token sale 80% will be divided among token sale participants. The rest is reserved for the team, escrow, advisors and other partners. Minimal sum allowing the project to operate is 10.000 ETH (approximately 3 million EUR) and the cap is set at 100.000 ETH (approximately 30 million EUR).
At the time, another project, a unique blend of an all-star management team, high quality operations and compelling projects (Tesla Energy or Hydrogen Cars) – Monkey Capital, pegged to be the hottest ICO this summer launching pre-ICO options.
Being a successful graduate of Belarusian State Economic University (BSEU), Maria has acquired competencies in economic and social studies. Given Maria’s previous research working experience, and desire to explore what's really shaping the future, the main research focus is placed on FinTech and Blockchain Technology.