BMJ Score: 3.7
Quick Summary84 Investors read this
CommentaryThe mortgage industry is a $9.9 trillion market in the US alone, and it is still growing. The main problem here is that while the market is dynamic, the technology behind it is archaic. The 2008 housing crisis caused institutions to become risk-averse and reluctant to lend money. The checklist for mortgage approvals is incredibly strict and often makes it difficult for freelancers and entrepreneurs to get approved. Block66 picked a great market to introduce blockchain because it has the ability to transform the current cumbersome and siloed mortgage processes. What’s even more impressive is that they are currently in the lead technically as there is no existing platform in this space. The team is very strong with positive track records of success in the mortgage and blockchain fields. While we love the ideas expressed in their very detailed whitepaper, Block66 does not yet have an existing platform. While the use of the ETH blockchain raises our confidence, until the project is fully launched there will be potential for competitors to jump in this space. As far as media coverage, Block66 has been featured in Yahoo Finance and national mortgage news and has several partnerships. We love Block66’s goal to become the first blockchain-enabled network that will span borders and connect institutions with borrowers worldwide, and we are eager to see how they bring their whitepaper into reality.
- How to invest: To participate in the presale, you must first register to get on the whitelist at the following link.
- Discount: The pre-sale discount is 33%
- Eligibility: Restricted countries include Canada, China, Iran, North Korea, and US.
- Token Price: $0.10 USD (first 50m tokens/discount included)
- Jurisdiction: United States
- Payment Accepted: You can buy B66 tokens with Ethereum (ETH), Bitcoin (BTC), and Bitcoin Cash (BCH).
- Problem addressed/solved: The mortgage market in the US is $9.9 trillion, $32.9 trillion worldwide, and growing. However, risk-averse institutions are reluctant to lend to many creditworthy consumers. Willing small lenders struggle to enter the space at scale. Existing processes and technology are cumbersome and siloed, compounding the problem for borrowers.
- Target customers/customer/ segments/verticals: An average of 21 percent of individuals in high-income countries have an outstanding home loan, compared to a mere 2.4 percent in lower-middle and low-income countries. India is a typical case, with only 2.3 percent of individuals having a home loan. Block66 wants to target this discrepancy and offer loan opportunities to those people who typically cannot get them from the big banks. The platform will bridge the gap between lenders, brokers, and borrowers of all kinds.
- Value creation: Block66 streamlines the entire mortgage software and operations stack. For brokers, it provides a one-stop-shop, including credit scoring, property appraisals, and lender matching. For lenders of all sizes, it provides a sustainable loan pipeline, auditing tool, and mortgage securitization platform. For borrowers, it provides a quick, hassle-free way to access the best credit opportunities.
- Competition: Block66 could be one of the first of its kind in terms of strictly mortgage lending on the blockchain. It’s a niche market that they’re targeting, but it could prove fruitful if they are indeed the first ones to get their foot in the door.
- Market size/potential: Since the 2008 financial crisis, there’s been a shift from a market dominated by big banks to a market with a growing class of boutique lenders providing capital. In the U.S., nearly 50% of all new loans historically have been provided by the top three banks. In 2016 that figure dropped to 21%. It’s clear that there’s been a shift to “non-traditional” methods of acquiring mortgage loans, and Block66 wants to take full advantage.
- Regulatory risks: This is an incredibly regulated industry. Block66 will have to comply with all of the mortgage compliance and audit regulations at hand, and this will not be easy. Also, we would like more information on which third party security vendors they are leveraging to combat fraud.
- Investor value: Investors could find value in their tokens as more mortgage lenders and borrowers join the platform. The BNET token serves as the gateway to the platform and could thus increase in value as the demand for access increases.
- Disclosures: The Block66 website and whitepaper both qualify as mediocre at best. The whitepaper needs more visuals to grasp the attention of the audience and the website just needs more info overall along with an improved FAQ section. Having said that, Block66 does go into great detail on the technical side of their project so that experienced professionals can follow along.
- Token distribution: 40% held by Block66, 10% team, advisors, and bug bounty, and 50% token sale.
- Use of proceeds: Block66, for some reason, does not give exact percentages in terms of the fund allocation. They do provide a pie chart that can be seen on the website. The proceeds will be allocated as follows (from greatest to least): engineering, business development, operations, and marketing.
- Caps: Soft cap: $3M USD; Hard cap: $20.75M USD
- Track record: The Block66 team definitely has some all-star talent and they’re not afraid to shout it out on the website. Members of the Block66 team have worked at prestigious companies such as Deutsche Bank, Virgin Mobile, ING, Brown University, and Goldman Sachs. Joe Markham, CEO, has a solid combination of startup and mortgage experience. He was also named one of Canada's Top Newcomers to the Canadian Mortgage Industry in 2015. James Tuckett (CTO) and Ryan Sanger (CFO) worked for Deutsche and Deloitte respectively. Although a few team members come from top-notch firms, there’s not a distinguishable all-star with tons of connections, experience, and notoriety that could really lead the project to ultimate success.
- Integrity: In the spirit of transparency, let’s be honest. It’s difficult for anyone to trust another person offering a mortgage loan or mortgage loan platform ever since the 2008 financial crisis. Having said that, the Block66 team represents a strong project and a solid foundation of work experience. Everyone has a LinkedIn account (whether impressive or not) and they all have reputable experience in their respective fields.
- Joe Markham, CEO (LinkedIn)
- James Tuckett, CTO (LinkedIn)
- Vishal Karangutkar (LinkedIn)
- MVP: Block66 has not yet developed an MVP, which doesn’t hurt their image too much considering they incorporated only 1 ½ years ago. Their projected MVP launch is Q1 of 2019, with the first batch of on-chain loans funded and distributed via the network.
- Token use case: B66 is a limited supply token that, when stored in a special smart contract, generates the network’s native token BNET, which is then sold via the platform to network users (i.e. mortgage brokers). The revenues generated by the sale are distributed to BNET holders.
- Value-added: Block66's blockchain and smart-contract technology makes it possible for lending contracts to be tokenized, and the flexibility and liquidity provided by Block66's asset-backed tokens will open the mortgage market to a more diverse pool of investors. The democratization of the network, the issue of loans on the blockchain (Phase 1) and securitization of those loans (Phase 2) are all blockchain-reliant.
- Decentralization: Block66 infrastructure will be implemented as a decentralized application (Dapp), and run on the Ethereum network.
- Token Supply: Max potential supply: 305,000,000
- Technical difficulty/investment expertise needed: Block66 likes to keep it simple and focus on solving the most common problems surrounding mortgage lending. Their goal is to increase transparency and streamline capital with blockchain tech.
- Halo effect: Block66 encompasses the basic blockchain startup partners… a few different advisory firms and other blockchain-related companies. Their listed partners include aXpire, Bounty0x, The Crypto Realty Group, and Civic.
- Buzz: Block66 definitely needs to increase their social media following as their Facebook (900), Twitter (300), and LinkedIn (151) accounts have yet to break the one thousand mark. Having said that, Block66 at least holds itself together with 10k Telegram members and features in news outlets such as Yahoo Finance, Wall Street Select, and MarketWatch.