BMJ Score: 3.9
Quick Summary19 Investors read this
CommentaryLast month, a bottle of 945 Romanee-Conti was sold for $558,000 at a Sotheby’s NYC auction. Fine wine has been proven to be a stable investment. The $302 billion market itself has demonstrated a 267% gain over five to 10 years, indicating that investing in high end wines can be a lucrative business opportunity. Wine provides a reliable ROI and has outperformed property, gold, and equities. CWEX has created a platform that facilitates the trade of fine wine between cryptocurrency holders and certified fine wine vendors. By putting the fine wine exchange on the blockchain, Cryptowine Exchange strives to provide investment anonymity, security through a blockchain-based ownership certification system, and a unique certificate of authenticity. This is a very interesting and niche market for blockchain, and Cryptowine seems to have the lead time advantage. The team behind the product has experience in blockchain; they list numerous advisors, and their partnerships include DotChain, a company based in Switzerland which confirms the contractual validity of fine wine products . As for the platform, it will be built on the ETH network and is scheduled to be released in the last quarter of 2020. This is an area of concern for us. While Cryptowine currently has the lead time advantage, its release data is almost two years away, and without any patents, the project runs the risk of falling behind potential competitors. We do like the idea of putting a fine wine exchange on the blockchain. Fine wine on the blockchain is a safe investment, provides anonymity, breaks down the inefficiencies of trading wine by removing geographical barriers, offers real time trading, and provides a reliable return on investment. Given the growing demand for wine in the global market, we encourage the team to bring its whitepaper to life as quickly as possible to deter competitors
- How to invest: Sign up for an account on the https://cwinex.io/tokensale/register and join the CWEX project to buy and manage your tokens on the website.
- Discount: 20% discount throughout presale
- Eligibility: The crowdsale of CWEX token is not available to residents of the United States nor any country where laws or restrictions conflict with financial security and regulatory compliance rules.
- Token Price: 1 CWEX = $0.16 USD (discount included)
- Jurisdiction: Hong Kong
- Acceptable currencies: EOS, ETH, BTC, BCH, LTC, NEO, ZEC, XMR, USDT.
- Minimum investment: $50 USD
- Problem addressed/solved: CWEX wants to tackle three key issues facing the fine wine market: 1) high processing fees on current fiat currency-based wine trading, 2) high cross border taxation and legal regulations, and 3) fine wines having no connection to the crypto market.
- Target customers/customer/ segments/verticals: According to the pitch deck, CWEX is targeting three primary demographics. The team believes crypto investors who want to reduce volatility in their investments and tech savvy investors looking for new investment vehicles will find the platform enticing. Plus, CWEX has a unique appeal for hobbists who actively trade or deal in fine wine in the current landscape.
- Value creation: The CWEX exchange aims to establish an easy-to-access-and-use fine wine trading platform. CWEX seeks to provide anonymity and security of investment by utilizing blockchain-based ownership certification for each bottle of wine traded on the platform. This system of trading with ownership certificates significantly lowers the current processing fees, giving the buyer almost 80% higher value for his investment at the start.
- Competition: CWEX dives deep into a competitive analysis of the major players in fine wine trading on pages 8 and 9 of the whitepaper. Essentially, the competition charges much higher commissions, has limited stock, and uses outdated systems that cause lengthy authentication and payment processes. Cryptowine Exchange appears to be one of the first blockchain startups attacking this market opportunity.
- Market size/potential: The global wine market was valued at $290 billion in 2016 and is expected to grow to $402 billion by 2022. The typical fine wine investment is geared toward the short term due to exponential increases in the value of the wine over the first couple of years of its life. Fine wine is experiencing increased interest from a trading standpoint and a consumption standpoint, especially in Asia, where wine consumption is up four times from 2000.
- Regulatory risks: The wine market is heavily regulated around taxation, legal regulations, and the convoluted trading process.
- Investor value: CWEX holders could see their investment increase as more people join the platform and choose to use CWEX when operating on the platform. Since other crypto can be used, it dramatically lowers the use rate of CWEX compared to a system where CWEX is required to access the platform.
- Disclosures: CWEX does an incredible job disclosing both its project/business model and its ICO. The whitepaper is full of useful information, and the pitch deck is a great tool if you prefer a quick overview of the project. Plus, CWEX has its demo version available online for anyone to use.
- Token distribution: 62% ICO, 14% CWEX team, 12% community and user growth, 5% legal & finance, 4% future stakeholder, and 3% bounty.
- Use of proceeds: 25% CWEX platform development, 25% global partner & vendor management, 25% expansion and operations, and 25% market compliance management.
- Caps: Soft cap: $1 million USD; Hard cap: $10 million USD
- Track record: The CWEX team won’t jump off the page and impress investors right away. It takes a bit of research to really find the experience and qualifications of each member. The management team consists of five co-founders, each of whom has a different expertise. The CEO, Manuel Kallupurackal, graduated from the Geneva Business Schools with an MBA in International Management. He’s worked as a strategic planner and consultant for a few different companies like Cisco and CBRE. The other C-suite members have backgrounds in finance, product management, blockchain, and legal studies. CWEX made sure to diversify its core team and added strategic advisors who mostly focus on the commodity and legal aspects of the business.
- Integrity: Although the team at CWEX might have lackluster LinkedIn profiles, they give no reason to investors to worry about the integrity of the group. The MVP is live and working, documents give great detail on the project, and the website is extremely transparent and easy to understand.
- Jacob Kallupurackal, Founder & CEO (LinkedIn)
- Maxim Andersen, Co-Founder & Blockchain Expert (LinkedIn)
- Thomas Tsang, Co-Founder & Product Manager (LinkedIn)
- Nadir Zemrani, Co-Founder & Finance Manager (LinkedIn)
- MVP: Cryptowine Exchange has a stellar demo that’s available at the following link. It does not yet utilize tokens or the blockchain, but the UI and UX are rather advanced for a pre-ICO. It has solid functionality and it’s extremely easy to sign up and begin “trading” fine wine. The real demo version won’t be available until early 2020, which is quite a long wait from the initial token generation event.
- Token use case: The CWEX platform will enable traders and customers to trade in CWEX token and other major cryptocurrencies. This means that CWEX is a standard utility token that will pay for fees and equity in the fine wines that are traded/purchased on the platform.
- Value-added: CWEX token holders get a few benefits like discounted trading fees and exclusivity/priority in trading positions. All crypto will be allowed on the platform, devaluing the CWEX since the majority of people will obviously be more likely to already own other crypto and then want to trade with them. There’s really just not enough motivation for users to use CWEX other than the discount, which isn’t strikingly significant.
- Decentralization: CWEX platform is fully decentralized.
- Token Supply: Max supply of 89 million CWEX.
- Technical difficulty/investment expertise needed: Cryptowine Exchange will act as a commodity trading platform for the decentralized trading of fine wines using cryptocurrency. It’s the same concept as investing in a commodity like gold, but with wine. An informational video is available on the project’s YouTube page for further explanation.
- Halo effect: CWEX has partnered with DotChain GmbH Switzerland, which will act as a governing authority responsible for the onboarding of partners and merchants, auditing partners and merchants stock, and securing storage. DotChain will also issue blockchain-based ownership certification. Along with its DotChain partnership, CWEX has acquired agreements with several international fine wine partners and merchants who will participate on the exchange.
- Buzz: Cryptowine Exchange has around 1,000 followers combined across its Facebook and Twitter accounts, receiving positive engagement that amounts to around 50-60 shares per post. The project has also been featured on legitimate news outlets like Reuters, Yahoo Finance, Bloomberg Business, and EconoTimes. CWEX plants to cover all media outlets with a focus on professional & blogger articles, social media, and instant messaging / media services.