So I read the prospectus and I found a RED FLAG. It allows the company to buy back your token at any time, for 1$. they just have to give 60 days notice:
"The Issuer reserves the right to redeem the Tokens at any time prior to the Termination
Date up to an amount representing 99.9% of the equivalent of USD 1.00"
This needs to be addressed by Envion.
This is on page 12 of the prospectus:
https://static.envion.org/kyc/Envion_Prospectus.pdf"I TERM OF THE TOKENS
I. Term of the Token
The Tokens are issued for a period of 30 (thirty) years starting with commencement of the
Subscription Period (the end of that period: the Termination Date).
II. Redemption of the Tokens
1. The Issuer reserves the right to redeem the Tokens at any time prior to the Termination
Date up to an amount representing 99.9% of the equivalent of USD 1.00 (in words: one USDollar)
per Token. Notice of early redemption shall be given pursuant to clause M (Notices)
not less than 30 nor more than 60 days before the day fixed in the notice on which any Tokens "
Some more of my thoughts on Envion for those who are interested. I'm working in the field of renewable energies and therefore have been following this ICO regularly.Today I told my coworker about the current hype with ICOs and he, who has been working with banks for the last 20 years, told me that it reminded him of 1999/early 2000s when people were throwing money at anything. He told me there was e.g. a company from Hongkong that said had invented tracking systems for trucks and were already selling products with a cash flow worth millions.
In the end it turned out the company had faked a great percentage of sales to their "customers" and hadn't even bothered to set up letterbox companies with the respective names they allegedly had sold these products to. The formerly acclaimed global yearly turnover of 93 million $ turned out to be more something like 1.5 million $.
With Envion what I have seen so far is that they don't have a working product yet.Therefore there a few factors to consider if you want to assess the potential of their product:
First, it's just a prototype at the moment, which therefore cannot have been tested under the many different working conditions yet that it has to endure if it is to be distributed globally. What about dusty, dry, hot, cold environments or everything in sequence within 24 hours, which happens if you put up a container next to a solar power plant in the desert.
Then the costs:
- of the Envion mining equipment itself
- the costs for transportation
- the costs for maintenance if something stops working
The availability of:
- cheap electricity
- of trained people who maintain the equipment
and if there are no trained mainentance staff available:
- the costs to hire and transport the staff to and from the mining site
Not even considering the initial investment cost, the advances in new mining hardware or the possible increase in network size and difficulty increase for many cryptos, the overall costs for running and maintenance will decide the profitability. In my eyes this is why mining companies are located in Iceland and China. There is cheap electricity AND trained personnel available that does not have to travel around the globe to provide their service. - And if there are other spots with even cheaper or nearly free electricity, why is it that they haven't been claimed yet? They have to be small niches which until now have not been interesting enough for the major players.
So either the niches Envion wants to exploit are small and if they are not the other factor, the costs for providing proper maintenance, is the reason that no one else is there yet.
If they put up their containers in Europe or the US they will find enough people capable to keep the systems running, but then, how are electricity prices there?
If you truly want cheap electricity it has to be produced at the lowest marginal costs possible, which in the long run means you have to go for renewables. However, medium and large power plants, like solar and wind, are only built if the demand or state subsidies will make this project economically feasible. In Germany, for example, the ROI for photovoltaic plants is around 12-14 years with the current state subsidy of around 0.11 /kWh if you sell the electricity to the grid or even lower if you do not meet the criteria to receive the subsidies, which depends on the size of the plant.
So I wonder why a plant owner, at least in Germany or Europe, would want to sell electricity to Envion at a price which is lower than the one guaranteed by the state, which still is above market prices. And even if he doesn't receive the subsidies there is still a huge market he can sell electricity to at current market prices.
There is no reason why the plant owner should sell Envion electricity below market prices. Envion, of course, could buy at market prices but what would thein their edge be compared to other miners?
The next question is, how many plants there are that are desperate enough to sell their electricity below market prices or even below their marginal costs? This would entail e.g. power plants that were built without meeting the conditions of economic feasability in the first place, state projects that had to be abandoned due to increased costs, for example. Envion doesn't provide any information where they think these potential niches are located. And if they know where they are, how big are they? As Envion wants to reinvest 25% of the returns into growing their infrastructure how long will it be until they run out of these yet unclaimed sources of cheap or free electricity.
Of course, if new niches appear on the planet, they can ship the containers to the other side of the globe. But how much is this going to cost compared to the earnings generated by their equipment during the available amount of time until that niche is closing again, e.g. as local demand in electricity goes up and the owner of the plant can charge other consumers higher prices than Envion? Does Envion hedge against this kind of risk or do they simply pack up under these circumstances and move somewhere else, which in turn causes new costs for transportation and set up at the new location?
The only long term feasible solution I can see at the moment is that Envion's (and any other) cryptomining is only profitable if marginal costs are driven as low as possible and stay that way. And places where these conditions are met are already occuppied (at least to a certain extent). So if Envion wants to be more profitable than other miners, they have to have lower costs than others and they have to avoid the additional costs, like moving and setting up equipment over and over or costs of transporting trained staff for maintenance.
Therefore, I see Envion's advantage against other miners, the mobility of their system also as its biggest Archilles heel as these additional costs will bite into their earnings. But if they want to reduce these costs, they will lose their advantage against other miners and will be just another mining company that moves to Iceland and buys electricity at market prices.The only other feasible solution I see for profitable cryptomining is that Envion ensures low electricity prices by owning the power plant themselves and running their equipment on their own power. This would be the solution with the lowest marginal costs. But then, why should you even bother with long term crypto mining using your own electricity when you could as well sell the electricity itself?
For me these questions are not answered or even asked.
What is definitely true is that the founders/members have already made a huge amount of money so far and I have to congratulate them on it. And if their product will prevail only time will show. It's just like in the good old dotcom times.
