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In the coming years, real-life asset digital tokenization will have a significant impact on liquidity across innumerous asset classes. The implications of the opening statement are relevant to all investors, including both traditional and cryptocurrency investors.
Tokenization is the process of converting rights to a real-life asset into a digital token on the blockchain. Many of these assets are difficult to transfer or subdivide, and addressing this issue is the biggest advantage of the aforementioned tokenization. The exotic car (top end supercars) market is a good example of where tokenization can be applied.
BitCar, a peer-to-peer exotic car trading platform, is using tokenization to make the exotic car market accessible to the masses. From an investor perspective, the exotic car market is similar to the artwork market - it might be a great investment, but because it requires such a large investment and very few people can afford it, there is almost no interest from the main public. Understandably, the crowds don't bother to put in the time to investigate if it is a worthy investment, simply tagging the sector as not affordable, regardless of how rewarding it can be.
BitCar, formerly known as Classic Car, was conceived in June 2015 and has since built a solid team, as well as an international network of advisors and professionals in the industry. Now, BitCar is working to breathe a new life to the public's relationship with exotic cars. By tokenizing exotic cars, BitCar’s team intends to bring mass market exposure to this asset class.
Built on Ethereum, BitCar is a decentralized platform that allows users to buy, trade or hold tokens that represent a share of a certain Exotic car, giving them digital ownership access to this physical asset. Users will be able to own shares in the specific Exotics that they select. There is no shared pooling of cars or management selecting the cars on behalf of the users in the BitCar concept. Instead users can choose which Exotic cars they want to buy fractions of.
The BitCar white paper explains the use of the Ethereum blockchain as follows:
“The Ethereum Blockchain ledger is used for all traded interests, giving a decentralized platform and transparency so that tokenized Exotics are traded only as stated, eliminating ‘naked’ or rehypothecation in the peer to peer trading of the Exotics interests thanks to the underlying blockchain technology.”
How it works
Let's take a look at the BitCar system components and how they will interact with each other. The system incorporates 3 fundamental parts, the network agents, assets manager, and the dual-token setup.
A network of verified agents will manage the onboarding of new Exotics (Exotic cars) on the platform, the tokenization administration and maintenance program of the Exotic (including deregistration, transportation, storage, insurance administration).
The assets manager is responsible for the issuance, transfer and update of CAR tokens on the BitCar Platform.
The BitCar ecosystem runs on a dual-token module. The primary token, BITCAR, is a utility token and allows users to access the ecosystem and the platform’s services and features, which include escrowing and payment for the Exotics MSI costs, staking by agents against performance and network transaction fees.
The Exotic asset tokens, CAR, represent a unique physical exotic car. They are created at the time the Exotic asset is placed on the platform for fractionalization and sale to the users. Each Exotic asset will have a maximum number of ERC20 tokens created and sold, depending on its valuation at the time it was onboarded. All users may initially be limited to a minority interest in any given Exotic in order to facilitate fair and distributed access to Exotics for all users.
Simply put, verified Agents will source, acquire and store Exotics, as well as display them, and platform users can peer to peer trade their interests without an intermediary in a trustless manner. After a specified time, CAR token holders who own all or a majority of the tokens of a vehicle can take possession of the vehicle (drag-along provisions will apply), which burns the CAR specific tokens. Alternatively they could choose to put their CAR tokens back onto the platform.
CAR token prices are designed to be much less volatile than other cryptocurrencies, and so holders should benefit during times of crypto volatility from their greater stability compared to other cryptocurrencies.
Through blockchain and smart contract technology, the control over fractionalized or tokenized Exotics will remain with the token owners, who will be able to not only to trade, but also to democratically vote on matters relating to their ownerships, such as liquidation dates.
In order to create awareness and allow potential early adopters of the platform an incentive to assist the Bitcar team in their efforts, BitCar is currently holding a token sale. The token sale supply represents 50% of the total token supply, so there will be a total of 250,000 tokens available, for 0.10 USD each at the offering. The ICO funding cap is 22,000,000 USD and is expected to end on April 20, 2018 or when the funding cap is reached.