VaultBank ICO Review.

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Overview:

  • Symbol: VB
  • Soft cap: 10 million USD, with refund / hard cap 20 million
  • Presale: November 3rd, 2017: 15% discount
  • ICO Sale Nov 9th, 2017
  • Main Deliverables:
    • Debit Card
    • A Fund focused on investing in loans

Vaultbank Opportunities

  • Quarterly dividends paid to token holders from profits of the VaultBank Fund and the Debit Card fees.
  • The tokens will have secured assets as collateral
  • Gateway for 17 fiat currencies
  • Declared Clear company structure and jurisdiction for the Vaultbank fund
  • Strong team with strong resumes
  • Token holders will receive a dividend and not the interest on the loans. Furthermore, this dividend will be at the discretion of the board of the directors.

Debit Card

  • VaultBank claims that it’s debit card will have some of the lowest fees in the industry.

VaultBank Fund

  • Vault bank will source loans from Random Forest capital and 4 leading international banks (although there is no reference to their name in the whitepaper)
  • The tokens actually represent a share in the fund, contrary to most ICOs today VB tokens are shares.
  • VaultBank will be able to further leverage on their credit assets on a 6:1 ratio.
  • The loan selection will be done through algos, which reduces costs but can also lead to expensive mistakes.
  • Expected returns on the funds are between 15% and 20% (when leveraged). These are not the final returns of the token holders, operational costs need to be deducted.
  • The board of directors may release a part of the profits as dividends and reinvest others in more loans, this will have a compounding effect on the value of the assets and consequently the tokens.

VaultBank Concerns

  • The business model depends a lot on the health of the loans that VaultBnak will be investing in. When investing in loans, there are many variables to take into account, such as the health of the borrower, if there are assets backing the loan, what are the general market situation and many more. Thus investing in loans does not always give a guaranteed profit
  • The team are receiving 32% of the funds, so one can think of this as a 32% dilution of the shares in addition out of the funds revised 80% will actually go into the fund. This is another 20% reduction in the Vault fund.
    The advantage here is that there is a floor which VB tokens, because the Vaultbank fund will have a cash asset. In addition, the Vault debit card, could create more value and make up for the 32% dilution and the 20% operational fee of ICO funds.
  • Unlike other credit cards ICOs, the token holders will not receive a share of the fees but a share of the profits.

Off the Cuff comments

  • A reference is made to a trading terminal in the first paragraph of the whitepaper but is not explained further later on.
  • The website and whitepaper use technical jargon which might make it difficult to understand for the common investor. Examples include: “quant approach”, “security position as a tender”,  “insurance surety wrap”
  • The white paper is titled as a draft, has no header, footer or page numbers. Would such a document constitute a legally binding agreement between the company and the token holder?
  • Why is it called a bank, when it will not offer any banking services as we traditionally know them. This could add unnecessary confusion.
  • Investing in VaultBank is an investment in both the FIAT economy and the Crypto economy, as the loans they will invest in will be in FIAT currencies; exposure the Cryptos will take place through the credit card fees collected.

Success criteria

The success in general depends on:

  • The ability to keep operational costs down
  • The performance on the loans they invest in
  • Their timing of the launch of the debit card
  • The number of clients that use the credit card

Compared to many ICOs out there this ICO considers the token holders as shareholders rather than donators. This is a huge plus as there is no conflict of interest between the token holders and shareholders. Thus the board of directors, have no conflict of interest when making decisions.

Vault bank’s success has two layers, the debit card and the credit fund. This two-pronged approach to enter the cryptocurrency market can justify the share dilution of 32% and the 20% operational costs.

A key success factor is the amount of funds which the fund collects at ICO stage, the more it collects the more it can leverage on the fund.

The cryptocurrency debit/credit card market is a competitive one, Vaultbank tokens have the advantage of being structured as securities rather than other exotic forms of association between investor and company.

More information: https://vaultbank.io/

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