Ethereum: Slock.it Gets $2 Million for Creation of the Universal Sharing Network, WeTrust Receives $4.5 Million with an ICO
Two Ethereum startups aim to build blockchain platforms which enable people all over the world to share and lend money and other things in a secure, trustless and easy way; Slock.it with its Universal Sharing Network and WeTrust with global trustless Lending Circles. Both startups recently received funding to realize their visions.
Nearly daily new promising Ethereum projects start with the declared goal to make the world a better place. Two of the hottest new projects are loosely connected; Slock.it wants to enable people to easily share things, while WeTrust aims to provide trustless banking for the unbanked. Both convinced investors to fund the projects.
Slock.it and the Universal Sharing Network
Slock.it should be well known to everybody following Ethereum. The startup of German Ethereum Core developer Christoph Jentzsch was involved in the infamous DAO, planned for some time to connect the Internet of Things (IoT) with the Ethereum blockchain, has cooperated with German energy giant RWE and recently received an award of German Ministry of Traffic. Now Slock.it has received a seed funding of $2 million to create the "Universal Sharing Network" (USN).
The USN seeks to “shake up the sharing economy by enabling both companies and individuals to rent, sell or share any connected smart object,” as Slock.it co-founder Stephen Tual explains on the company’s blog. “Build on top of the public Ethereum blockchain, the USN will provide users a set of mobile and desktop applications to find, locate, rent and control any object mediated by smart contracts, from anywhere in the world.”
The Universal Sharing Network routes around all the contract stuff, the trust and the payment trouble which currently accompanies the existing sharing economy and restricts it to small trusted circles. Slock.it wants to achieve this by letting people pay with ether and making smart contracts an inner part of the sharing apps. This should help to simplify the user experience radically; “There is only one key (your smartphone) for everything and no need to register or login for the service thanks to a judicious use of security deposits.”
Tual announces that the USN will start 2018, but will first be restricted to B2C - Business to Consumer - relationships. So it aims to allow companies to lend its products, like bicycles, cars, drilling machines, cameras, washing machines and lawn mowers, against ether. At the same time, however, Slock.it wants to develop a B2B version which could enable companies to make the USN part of supply chains and production circles. Manufacturers of fitting goods are requested to get in touch with Slock.it.
But the plans of the startup from the little German city of Mittweida go beyond this. It aims to strengthen the developer community around Ethereum by releasing their Ethereum computer open source as a software image based on Ubuntu. Instead of trying to sell hardware like smart locks or computers, like Slock.it earlier aimed to do, the startup now wants to provide the infrastructure to connect as many things as possible with the Ethereum blockchain.
WeTrust - Bank and Insurance for the Bankless
While Slock.it took the traditional way of raising funds with seeding rounds, WeTrust uses a more innovative method to finance the development of their platform; they used an ICO.
ICO is the abbreviation of Initial Coin Offering. In the cryptocurrency community, this practice has become a common and wildly successful approach to raising funds. It just means that you pre sell crypto-coins or -tokens, which either build a new currency or are interwoven with a project. Especially Ethereum’s smart contracts made the creation of new token easy and led to a wave of successful ICOs to fund startups.
The basic concept of WeTrust is to replace banks and insurance companies. All those companies offer the same product, which usually leads to low margins and cheap prices. But not with banks and insurance companies, as they do not just sell credit and insurance, but also monetize their role as a “trusted third party.” Trusted third party was one of the favorite terms of Bitcoin’s creator Satoshi Nakamoto, and you could note, that Bitcoin and WeTrust have the same goal; get rid of trusted third parties by decentralizing all things.
WeTrust aims to build a decentralized platform for insurance and loans based on a reputation system and a decentralized scoring, both realized as a system of smart contracts on top of Ethereum. The first product WeTrust will create is a Rosca-platform. Rosca means “Rotating Savings and Credit Association" and is a financial scheme that is mostly popular in developing countries; every member of the Rosca gives a certain amount of money in a pot, and in a rotating order one member can take the whole pot. This enables people to save money for larger purchases or to fund new businesses, without storing money at home and the risk of falling victim to theft.
Thanks to smart contracts and cryptocurrencies WeTrust wants to reconstruct the Rosca scheme without the need for trust and physical co-presence; this, however, should only be the first step. WeTrust’s goal is to build a platform which provides many financial products like loans and insurance to the bankless and maybe as an alternative to the banked which seek better products.
The startup was founded by graduates of US elite university Berkeley. The team is highly international with a strong presence of Asian provenances. Since they already list community managers for China and South America, you can assume that these are the first target markets of WeTrust. The startup is also supported by prominent advisors like Ethereum’s Vitalik Buterin, OpenBazaar’s Brian Hoffman, and Cornell’s Emin Gün Sirer.
The Trustcoins will have several, not finitely defined functions on the platform. For example, they will be a proof of trust, but also be used to pay for services and to finance development. During the ICO 100 million Trustcoins have been created.