Experienced investor and blockchain expert Nick Evdokimov has been sharing his insights into the ICO world. He is helping technology companies from different sectors find proper backing as founder of ICOBox. In his videos, he shares the important investment principles that have driven his success. It’s an opportunity for blockchain investors to have a behind the scenes look at how these new companies work and what are the key factors to making a profit in the budding new market.
Recently, Nick went deep into a blockchain solution that’s easy to overlook amid the frenzy. Pavo is an Internet of Things and blockchain platform that’s consistently brought new developments to AgTech for years. It stems from an established business that builds monitoring systems for tree nut growers in the European market.
The platform uses blockchain technology to store data gathered from IoT monitored crops. Here, any interested party can use Pavo’s ERC-20 token to participate in the network and make financial decisions based on accurate information about any determined crop.
Pavocoin creates a win-win situation for both farmers and investors, as Nick notes. For farmers, the token will enable them to sell futures on their production so they can adjust their own purchases and development according to demands. For investors, the platform would give them access to early stage crops offered at a significantly cheaper price.
More so, the platform can create a perfectly transparent marketplace based on smart contracts. Here, any involved party in the agriculture industry can transact directly with any other using pavocoins. They could sell anything from equipment, to fertilizers, to consumer-end products. The platform could even become the grounds for agriculture’s own decentralized economy.
Nick believes Pavo is a way for blockchain investors to make good money on agricultural projects. He estimates that pavocoin’s price could increase eightfold over the next six months. He recently explained how the platform’s economics could lead to healthy profits.
“We have two key players of this process: buyers and sellers. Then we have a number of products with different prices, the crops futures. For example, let’s say the price of this particular product is $ 10,000.
We also have Pavo, which in this case, performs the escrow for these purchases. These purchases are made via pavocoins which are listed on exchanges.
Escrow works in this way: when we are choosing a certain product — for example, we choose a product that costs $ 10,000, or the equivalent of one Bitcoin — this payment is split into two parts. The first part of this payment is given to the farmer in the form of fiat or bitcoin. The second part is kept by the platform while the crops are grown, as the farmer will receive the second part of the profit only after harvest. Thus, if the farmer chooses a 50/50 arrangement, after the $10,000 payment is split, half of it is given to him in fiat or bitcoin, while the other half is kept in escrow. The escrow amount is then held in the form of pavocoins.
[It’s important to note that farmers can arrange to split the $10,000 into different arrangements of either 25/75, 50/50, or 75/25. For purposes of this example we will stick to 50/50.]
This arrangement will last throughout the duration of the harvest. Once the harvest has been gathered, the tokens that were used to hold the escrow are then issued in favor of the seller. They can now sell the remaining amount. That is, send them back to the exchange and withdraw them in the equivalent amount in fiat or bitcoin.
We can now understand that with Pavo, between 25 percent and 75 percent of all cash flow will be constantly used to buy tokens, and these tokens are held on the seller’s account for a period of time, up to four months, during this time period there is a demand for tokens.
In addition to all this, there is a second component, which we should also pay attention to. There is a 10 percent service commission. That is, from our transaction of $10,000, or one bitcoin, 0.05 bitcoins will be cleared immediately for the commission, and 0.05 BTC is the commission from the tokens. In this way we constantly destroy 10% of the system turnover monthly, and these tokens are permanently out of circulation. The other part of the tokens, from 25 percent to 75 percent of the total cash flow, are frozen for a time.
Now imagine a situation in which we have a demand for a product. If we suppose that after six months of the existence of this service the monthly demand is a million dollars, in six months of 50% from the entire amount, $500,000, is frozen in tokens.
Next month they will be sold for $550,000 in tokens, and the month after that, they will be redeemed for $600,000 in tokens. The month following, for $650,000 and so on. As you can see there is constantly a growing demand. Meanwhile the supply of tokens is constantly decreasing because the funds are being held.
Given the situation, we understand that in six months the price for these tokens will increase by approximately eight times. This is due to the increase in demand coupled with the decrease in availability of pavocoins used for escrow or to pay service commissions.”
Nick makes the case that Pavo’s ICO buyers will see significant profits in a short period of time. More so, he recommends investors to favor 75% escrow arrangements in order to see an increase in the value of pavocoins.
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