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EthicHub – Blockchain Based Crowd-Lending for Investing in Small Profitable Farmers Around the World

Crowdsale: September, 2018

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  • Currents stage pre-sale:
    1 ETX = 0.64 USD

    Accepted:  ETH
    Soft cap:
    500 ETH
    Hard cap: 2,000 ETH
    Min investment: No
    Web: www.ethichub.com

      Utility  TOKEN: ETX


    Restrictions:
     N/A
    KYC required: Yes
    White-listing: Yes
    Registered in: Gibraltar
    White paper: Read here

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EthicHub Summary:

As of 7 May 2018 

Hi, this is Pavel – EthicHub Grill Project Manager. My job is to keep projects accountable and to help in delivering transparency on development milestones during and post Initial Coin/Token Offering. 

  Email: pavel (at) icogrill.com 

  • Product and problems it solves

    THE PROBLEM
    Small farmers do not have access to banking and due to lack of available private capital in their geographical area, they must bid to get it, because the lender has limited capital. This means they offer to pay interests even higher than 120% per year in order to obtain the required financing, because their crops generate enough benefits to cover it, even if their own profit gets reduced. On the other hand, socially responsible investors can’t directly invest in positive
    impact projects, with high profitability and with affordable risk.

    THE SOLUTION
    The solution consists on connecting groups of small farmers from developing countries who currently offer to pay high interest for cash loans without leaving record of such payment history, with investors in markets with excess liquidity, allowing investors to obtain high returns for their money and at the same time, provide better interest rates for farmers. This is possible due to the difference in the cost of money in their respective economic zones.

  • Competitors and market share

    We are the only platform that charges commissions only in case of success, that is, once the loan has been paid. We believe that no one should benefit from an unpaid loan.

    Our strategy to capture and evaluate projects is based on people. At Ethic Hub, Local Nodes are people linked to the community they serve. They benefit directly from maintaining and increasing their
    good reputation based on the accurate valuation of the projects they select. Local Nodes also generate another competitive advantage: they are the best way to identify users (probably the greatest problem of decentralized P2P loan platforms, since it is impossible to validate the existence, nor moral quality of someone asking for a micro-loan from across the world).

    SaltLending and CoinLoan are focused on token guaranteed loans, so it will remain a niche project until an important economy’s tokenization process is generated. Its borrowers are already banked.

    Eth-lend also had this approach but it seems they have pivoted to allow unsecured loans, perhaps considering the above. They have a very interesting point: to issue a generated according payment
    history cryptocurrency; ownership of it allows you to apply for unsecured loans in regard of such cryptocurrency amount. Their system therefore presents a roadmap to future unsecured loans, but
    with a long-term scalability. Their borrowers are already banked.
    Everex is a project based on remittance transfers between countries, although it also has microcredit functionality. As ETHLend it shares the concept of a currency representing user’s reputation but with a
    trade approach that we don´t consider.

    Our main differentiation on Dharma is its macroeconomic approach based on rating providers to value the loans. Our microeconomic approach is based on the fact that a personal approach to evaluate a
    small farmer in the other part of the world is better than one based on data. It does not intend to launch an ICO to finance the project so the system and its diffusion will take longer to develop.

    Ripio, Lendoit and Fintrux have a profile very similar to that of Dharma, introducing some additional components, such as guarantee funds, unpaid auctions or people in local for the release of funds, but
    always making a selection of projects based on datamining and so on with little capacity to reach the unbanked ones, which mostly lack sufficient data.

    Although Micromoney is neither a crowdlending platform nor a decentralized system, it offers credits to unbanked users, at very short terms and very fast, with very high interest. Its machine learning based scoring system gets around 26% default against our system’s 3%, and their loans cost between 100% and 400% per year compared to 25-50% we can offer.

    Bitbond is a non-decentralized transnational crowdlending platform based on Bitcoin loans. Unlike us, their target clients are not unbanked people. It competes in improving interest rates that banked
    people pays.

    Kiva offers credit through NGOs and other local agencies in developing countries. Since they don’t use cryptocurrencies and due to their project capture channel cost, borrowers pay same or even higher
    rates than in our system, but without offering investors’ profitability; Kiva lender’s motivation is to make a positive contribution to the world, not to make money. Ethic Hub balances both for having even
    greater impact, since offering good returns to investors can potentially redirect even more money to those 2 billion people.

    In summary we could say that the platform more comparable with Ethic Hub is Kiva since the values and the target and the selection of projects are similar. And what differentiates us is that thanks to
    Blockchain and the Ethic Hub cryptocurrencies, offering similar costs to the borrowers, it allows to offer a good profitability to the investors and in this way we want to promote a fair win-win relationship.

  • Blockchain & token use-case

    At the time of writing several so called 3rd generation blockchains (NEO, Waves, Stellar…) have come forward claiming to improve over the perceived limitations of Ethereum (scalability problems, slow transfers, rising gas price). However, we chose to start the project on Ethereum due to several key strengths.

    ETX tokens will be the currency to operate within our platform. We also plan to modify the Lending Contracts to include a reverse interest auction to select bids, and to add the SmartContracts that will
    manage the guarantee fund.

    We will allow access to the platform using a self sovereign decentralized identity provider. A Smart Investment system will be added to handle investments for high volume lenders. When technology allows it, we will deploy our code in a decentralized hosting (like Golem) and decentralized storage platforms (like SWARM or IPFS).

  • Token sale anatomy

    EthicHub have a great document outlining their token sale model, You can read it here. 

  • Challenges and risks ahead

    CHALLENGES

    Currency exchange risk
    If a borrower takes out a loan in a currency other than his own, and the value of this business operating currency depreciates during the loan’s term, in practice it means the borrower will have to bear a much
    higher interest rate than initially agreed, highly increasing default risk. A borrower does not have investor’s ability to diversify his exposure to exchange rate risk. Thus, it is necessary to consider that
    borrowers must repay the money in the currency in which his business operates. Exchange rate risk should be assumed by investors because they are more capable to analyze them (properly managed can even turn into opportunity for them by investing in countries where they consider there are better macroeconomic conditions for the exchange rate factor to improve profitability instead of reducing it. In fact, lending money through Ethic Hub is a way to diversify
    investor’s asset portfolio with high yielding manageable risk investments. In addition, insurance services of the exchange rate will be offered to investors who do not want to assume this risk, in
    exchange for sacrificing part of their profitability.

    Cryptocurrency volatility
    A cryptocurrency value large fluctuation could only be a risk during crowdfunding period (14 day timelock); to prevent from it, the SmartContract will automatically call off the process if a decreased
    value means borrower does not receive at least 80% of requested amount. During loan’s period, such fluctuations are not relevant since cryptocurrency will only be used to transfer money between investor and borrower, and each of them will receive it in their respective
    currency, i.e. Pesos and Euros: the parity between Euro and the cryptocurrency will always be very similar to the parity between Peso and the same cryptocurrency.

    Trust
    Being confidence the great catalyst of credit, we focus on it to provide transparency and solutions that convince investors and borrowers: We bet for Blockchain and SmartContract for their ability to
    establish safe and inviolable conditions to transfer securities subject to compliance of such conditions. According to retail loan traditional approach, borrowers avoid default for two main reasons: negative
    consequences on their future economic solvency and legal action leading to confiscation of property or bankruptcy. Ethic Hub Protocol considers negative repercussions concern as an important part of
    the risk assessment mechanism described above. Traditional tools of the established legal systems will be also applied in the platform, being that loans are supported by valid legal documents in the
    borrower’s country.

    Privacy
    An individual’s credit profile and financial history are extremely sensitive data. Protecting the privacy of borrowers is a critical element for the Ethic Hub Network and yet lenders need access to this essential data to make smart investment decisions. In order to protect both the privacy of users and the security of the system we provide a certification mechanism which do not contain borrower’s identity details. Debtor’s identity will be unveiled only in the event of defaulted loan and will be registered in the platform’s Defaulting Debtors record, accessible only to registered credit institutions.

    Money laundering
    In accordance to the ethic code we are promoting, we want to comply with all AML (anti-moneylaundering) regulations, adhering to KYC (Know your client) standards, applying filters like Norkom
    (database for client filtering used by banks) and working exclusively with Exchanges that comply with these regulations.

    RISKS

    Regulatory Risk
    To this day, there is a significant legal gray area regarding international crowdlending or anything cryptocurrency related , although this situation will most likely change in the future.

    Political Risk
    An unexpected risk associated with the promotion and success of this new financial system will possibly be found in governmental resistance to the change. Some countries may exert their political
    power to prevent funds outflow or even declaring Exchanges as illegal, impeding borrowers from repaying their requested loans despite their best intentions; selecting countries remains investor’s liability but doing it wisely prevents largely from this kind of risk. Ethic Hub will provide investors with quarterly reports of risk situations in the countries where the platform operates.

    Sybil Attack
    Sybil Attacks (one person with multiple identities) are harmful to the extent that one borrower may obtain several loans under different identities. Lending money to strangers through peer-to-peer online
    platforms is fairly risky. In 2014, fraud was responsible for 12% of online lending industry losses. The risk assessment associated with identity fraud within a decentralized-international context is even
    more problematic. This is one of the main reasons why Ethic Hub promotes a Local Node figure, who practically eliminates this risk by personally identifying borrowers and geolocalizing their home and
    productive land.

    Malicious Local Nodes
    Local Nodes necessarily must be trusted individuals to make the system work, preventing any fraudulent testimony relative to a project’s solvency or borrower’s identity. This risk factor must be
    controlled by an adequate accountability and qualification mechanism aimed towards the detection of fraudulent certification (i.e. creating a misleading impression of an analyzed loans portfolio with an
    slightly above the average repayment rate). It is crucial that Local Nodes may be trusted by investors through various means of verification, including supervision by an internal auditor, who should
    complement the work of any public audits.

  • Current development stage

    First loans repayment and borrowers, Local Nodes and system’s first rating. Ethic Hub 1.0 version public release and first projects financed P2P. 1st. TokeSale preliminaries.

    Alpha release: https://mvp.ethichub.com/projects

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EthicHub Progress Updates, Budget & Timeline:

  • 2020

    Awaited

    Founders vesting period ends. Loan Secondary Market. Currency Exchange Insurance. Decentralized Exchange Integration. 10th country. 4th Token Sale. Decentralized governence. 

  • H2 2019

    Awaited / mobile app

    3rd Token Sale. Automated Investment System. Ethical defaulted debt collection policy. Mobile Apps.

  • H1 2019

    Awaited / local node

    1st Local Node Training Center. Guarantee Fund Smart Contracts. 2nd country. Positive Impact Scoring.

  • Q3 2018

    Awaited / first exchange listing

    2nd Token Sale (ICO). Ethix Token delivery starts. 1st Exchange listing Ethix Token

  • Q2 2018

    DONE / Platform Alpha release

    Ethic Hub Platform Alpha. Reputation Token (REP) Smart Contracts

    https://mvp.ethichub.com/projects

  • Q1 2018

    DONE on time / First smart contract release

    1st Token Sale (Presale). First projects funded by our Lending Smart Contracts.

  • 2017

    Started

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Meet the core EthicHub team & advisors

Jori Armbruster<br>Co-Founder and CEO

Jori Armbruster
Co-Founder and CEO

Blockchain believer and Co-Founder and CEO of EthicHub, who aims to disrupt the current financiallending system by creating a fair global crowd lending system. I have a background as CEO of an over880 employees company with prior experience in operations, HR, and M&A to name a few.

Pablo Chang<br>Chief Project Manager

Pablo Chang
Chief Project Manager

Mi carrera profesional se ha desarrollado principalmente en el mundo del café, en el estado de Chiapas,donde empecé como Director Regional de Atlantic Coffee Solutions, el mas grande comercializador yexportador de café en México.

Raul Martinez Fernandez<br>Co-founder and CTO

Raul Martinez Fernandez
Co-founder and CTO

My career has been a path of constant learning: new skills, technologies, programming languages or justanswering the question “how can we make this happen?” Thankfully I have been part of great teams andwith them, their support and mentorship plus hard work I feel very confortable working in this fast pace…

Rainer Aigner<br>Marketing

Rainer Aigner
Marketing & Operations

Easygoing, hard working, loyal, open minded, strong interest in everything Tech-related. EXPERIENCE &CAPABILITIES ● Scrum/Agile ● Lean Start-Up ● Design Thinking and Human Centered Innovation ●Process & Procedure Ownership / Process Improvement ● Coaching, mentoring & training of staff at all …

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Important: ICO Grill is in no way recommending that you to invest in Grilled projects. Our sole purpose is to promote learning, self-reporting by projects and collaboration opportunities.

EthicHub Expert Evaluation:

Written by: Jake Sedlock


CMO at a Blockchain Community Engagement Agency, building a following for new ICOs. Jake’s patience and cunning allow him to build connections in the market and put him in a class above the rest. His ability to process and decipher technical problems and his keen, adaptive abilities allow him to thrive in every aspect of his career. Jake has built relationships, created partnerships and structured plans to introduce many projects to the world. Jake is an irreplaceable asset to any company, and a key-player in his field.

EthicHub aims to make, financial credit and investment opportunities available to everyone in the world and where financing small farmers becomes a profitable investment.

When I first saw the name EthicHub I thought , oh great another humanitarian ICO that is going to be better suited as a charity, however after only a few minutes into the ICO’s Whitepaper I started to realize that there is more to EthicHub than I expected. I was pleasantly surprised, the second time this year, by another ICO that also has a positive social impact.

The Whitepaper reads:
‘’We are quite aware of the enormous responsibility we acquired by choosing this name for our project because it represents our declaration of intentions: We humbly make the commitment to strive every day to improve as individuals, as human beings, and to promote the adoption of collective values that improve our relationships. We are convinced ethics main values: justice, responsibility, integrity, respect, honesty, equity, are the basis of constructive relationships. Our goal is to prove that compliance with these values generates material benefits too, by acknowledging reputation and trust as an asset”.

Product and problem it solves
8 out of 10

The Problem

The world faces many issues, one of them is that there are 1.7 billion adults that are un-banked, in other words, have no access to a traditional banking system and that includes a credit score. By promoting financial inclusion, EthicHub is aiming to capitalise on this enormous market and provide a lower interest rate through the use of a blockchain platform.

This problem seems to be the focus of several ICO’s. EthicHub however seems to have the only viable solution promoting a way for investors to see some safety and returns compared to a lot of high risk p2p ICO’s out there.

Their Solution

EthicHub gives people the opportunity to invest in profitable agricultural projects that aren’t accessible via the traditional banking and investment markets. They have a strategic plan in place for opening up this market.

Market and competitors landscape
9 out of 10

EthicHub has the support of experts with experience in lending which is the current fashion and how things are done. Now I wondered why would a team member go from the current huge profits of 120% interest that farmers are sometimes charged, to join a project such as the EthicHub project which offers a cheaper, low profit solution.

I reached out to Co-Founder, Jori Armbruster for answers and he stated that “if you find a system that allows you to get 120% and you don’t mind about the impact your money has on others, then go for it. We propose a fair distribution, higher returns for investors, compared to an equivalent risk in their country and lower interest for the borrowers compared to the local cash loan rates”.

Technology, smart contract and blockchain use
6 out of 10

I have provided a general idea within this section however I leave the technology to the pros.

Token symbol: ETHIX
ETHIX:  ERC20 compatible
Max Minted: 100,000,000
Number of sales: 3 sales Q1
Objective: 500ETH
Hard Cap: 2000ETH

P2P money is when funds go straight from lenders to borrowers via smart contracts, without intermediaries.  

Only in success fees- Platform fees are charged only at the time of repayment. There is a  ‘Guarantee Fund’ for Investors

In case of default- the ‘Guarantee Fund’ purchases investors credit rights in exchange of the principal amount, allowing for an ethical recovery of the debt.

The long term goals are that ETHIX is accepted as means of payment within the rural communities receiving the loans, thereby helping them to reduce the problems that are derived from handling money.

EthicHub plans on running a pre-sale and then 3 public sales one a year starting this year in 2018, I have concerns about this model as there wasn’t any clear layout of the token distribution and allocation. This information my change my rating here, but for now I am sticking with an optimistic rating of 6/10.

Token use case and potential
7 out of 10

In a nutshell EthicHub is a P2P lending platform. They give investors a way to offer farmers loans at a lower interest rate than they could get by the current methods because they do not have any banking or credit score. The normal way a farmer gets an investment is by using their crops as backing for an extremely high rate. They state 120% is sometimes what they pay in interest and although this seems extreme, this is reality from the research I have done.

Team and ICO details
8 out of 10

EthicHub says- ‘as producers, buyers and financial intermediaries of agricultural production in rural areas of Mexico, we have strong field contacts and first-hand experience’. I dug deeper to find out the reality and was pleasantly surprised because their team truly is a plethora of experience and knowledge.

You can see on their website all the team members. I have not had an opportunity to look into the team as much as I would like, but I did get a chance to look into the Co-Founder and CEO Jori Armbruster. Jori greeted me and was more than happy to answer any questions or concerns that I may have had. I truly think that if the rest of the team is as great as their CEO seems to be, they are a more than qualified to lead the project to success.

Now I ran into a few snags looking into the rest of the team but that’s because Spanish is not my strong suit aside from a mumbled and most likely incorrect- “Uno mas Cerveza senorita”  Otherwise I feel confident to give them 8 maybe less/more if i could inspect the rest of the team’s profiles if they were written in English.

Conclusion

My final thought is that the name EthicHub is undesirable. Although I understand the name and purpose, I still disagree with the choice of brand name.

Overall I think that EthicHub Is one ICO to keep an eye on in the coming years. It doesn’t seem to be a fast mover but if you have your eyes on the long term (HODL) then you will be happy with this ICO.

As the world moves towards a more equitable distribution of wealth, it is envisaged that those that somehow manage in poverty, will have options for a better future.

TOTAL RATED: 
7.6 out of 10

 

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