We live in the age of the sharing economy. Uber and Airbnb are prominent examples that come to mind, but every week there is some new app that utilizes a similar sharing economy business model. The sharing economy is here to stay, and one startup is looking to use blockchain technology to remove one of the key characteristics of today’s sharing economy – centralization.
Bee Token is an early stage blockchain startup (it only released its whitepaper in January 2018) that intends to apply the blockchain model for short-term rentals. In other words, it aims to become the decentralized blockchain-based Airbnb. Over the long term, it plans to expand on this business model and venture into other industries as well.
The Current State of the Sharing Economy
Both Uber and Airbnb have grown into massive billion dollar companies. But as the Bee Token whitepaper points out, most of this growth has profited the founders and early venture capitalists, not the users who make up the backbone of these services. For example, Uber drivers make less now than they did a few years ago, and riders have not seen decreases in fares either.
Powering these companies’ bottom lines; fees, fees, and more fees. That’s the main issue that the Bee Token team sees as its entry point to disrupt the current short-term rental market. Currently, Airbnb charges a host service fee of 3% and a guest service fee of between 5% and 15%. In the proposed Beenest Ecosystem, these fees will be greatly reduced. The fees proposed are:
- 0% commission for BEE tokens
- 1% commission for BTC or ERC20 tokens
- 3.99% commission for fiat currencies
This is the main value proposition that Bee Token is counting on. Lower fees = more users = more listings = success. This is also supposed to distribute the benefits of the system more evenly.
Let’s see what how the Beenest ecosystem works.
The Beenest Ecosystem
The Beenest ecosystem is built on the Ethereum platform. Its foundations are its ‘Bee Protocols’ and the Bee Token. There are currently three main Bee Protocols:
The Payment Protocol
This one’s simple, but it’s the core protocol at the heart of the ecosystem. Both hosts and guests send Bee Tokens to the smart contract. If the booking contract goes as planned, the tokens are sent to the appropriate addresses.
But if things don’t go according to the plan, we move to…
The Arbitration Protocol
This is Bee Token’s solution to the disputes that arise between hosts and guests, usually from damages. The way the arbitration protocol works is as so:
- A host-guest dispute is escalated to arbitration.
- Arbitration begins, and the original payment contract funds are sent to arbitration. An additional flat arbitration fee must also be paid to create the arbitration contract.
- A pool of at least five arbiters is chosen to preside over this dispute (arbiters must stake tokens to participate in the arbitration network).
- Arbiters deliver the final verdict. If the verdict is not delivered within a specified time limit, they lose their staked tokens.
- Arbiters can then split the payment contract between the host and guest 0/100, 25/75, 50/50, 75/25, or 100/0. The final verdict is the median dispute amount of all the arbiters’ votes.
- Assuming the verdict was delivered on time, arbiters get paid, and their staked tokens go back into the arbitration pool.
- If either party is not satisfied with the decision, they can appeal. However, they will have to stake double the original amount.
The staking requirement is to prevent frivolous disputes. And while arbiters themselves will be paid as long as the verdict is delivered on time, the rate of appeals can affect an arbiter’s reputation and his or her chances of being selected as an arbiter again. The other arbiter selection factor is the number of tokens staked into the arbitration pool.
The protocol used for handling an arbiter’s reputation, among other things is…
The Reputation Protocol
All entities in the Beenest ecosystem will have a reputation score, stored on the Ethereum blockchain. This score will also be accessible to everyone in the ecosystem. There is also more than one reputation score, e.g., a user can have a separate reputation score as a guest, host, arbiter, seller, and buyer. Reputation scores will also affect listing order on the interface.
The Bee Token
The Bee Token is an ERC20 token that will power the Beenest ecosystem. The idea is that as the Beenest ecosystem takes off and transaction volume increases, more tokens will be staked. As the number of staked tokens go up, the circulating supply of Bee tokens goes down.
Other Strategic Protocols
While the Bee Token team will develop the three core protocols themselves, they will be partnering with others for the development of the rest of the strategic protocols. These will be protocols for currency conversions (including fiat), KYC and identity verification, the marketplace, and smart contract auditing.
How Bee Token Intends to Get Users
The success or failure of the Bee Token project will depend primarily on the number of hosts and guests that sign up for the platform. Hence, user acquisition is of utmost importance. Bee Token has a three-prong user acquisition strategy:
- The Crypto Community – The Bee Token team will first start out by targeting the crypto community. They will sponsor and engage with crypto conferences and conventions.
- Referral Program – A tried and tested method that has been around for ages now.
- Ambassador Program – Another tried and tested method that feeds in well with the referral program strategy.
Current Status and Development Roadmap
Right now, the Bee Token project is still in the very early stage. The only thing it has at this point is the aforementioned whitepaper. The next milestone to look out for will be for Beenest Alpha to go live in San Francisco and for the Bee Protocols to launch on Testnet. The target for this milestone is by the second quarter of 2018. In 2019, the Bee Token aims to have expanded its platform to five American cities.
You can view the rest of the Bee Token roadmap here. Based on their roadmap, the team appears to be quite conservative. On the one hand, this might mean the project may not scale fast enough. On the other, the chances of actually achieving these milestones will be far better.
The Bee Token Public Token Sale
The total supply of Bee Tokens is 500 million. 30% of these tokens will be up for sale with a target public sale amount of $15 million, payable in ETH. While the public token sale will commence from Jan 31 to Feb 19, you should know that the target amount will only be $5 million. This is because $10 million has already been raised from a private and public presale.
In the era of 9-figure mega ICOs, a $15 million target is quite low. And despite the fact that they only have a whitepaper at the moment, both the public and private presale was completely sold out. This is a positive sign for the short-term performance of the token.
Potential Issues with the Bee Token Business Model
Despite its token sale success thus far, the Bee Token is still in a very early stage of development, and there are a few potential issues that it should address as it progresses along its development roadmap.
For instance, how willing will parties, especially guests, be in going into arbitration? Consider that entering arbitration lowers reputation score. Further, if arbiters get penalized if the parties are unhappy with the decision, how willing will they be to be arbiters in the first place?
Another issue is its primary value proposition, the lower fees. Sure, it’s only 1% for cryptocurrencies, but it’s 4% for fiat currencies. When it comes to budget rentals, the difference in final cost may not be substantial enough to cause people to switch over to the Bee Token platform.
Finally, while the Bee Token whitepaper gives a good explanation of how the system would work, particularly on the backend, little to no detail is given to the frontend user interface. This will obviously be a significant factor in its success.
What are the Short Term and Long Term Potentials of Bee Token?
On the short term, the Bee Token’s potential looks promising. Again, at this point, they only have a whitepaper, yet their (admittedly small) private and public presales were sold out. With just $5 million remaining for the public crowdsale, it would not be a stretch to say that this would sell out too.
It is the long-term that is concerning. The issues highlighted in its business model above, if not adequately addressed, may leave the whole project dead in the water. However, as the team is scaling the Bee Token quite conservatively, how it does in San Francisco when launched will be a major proof of concept. At this early stage, only time will tell.
What do you think of the Bee Token? Can it dethrone Airbnb? Let us know your views in the comments below.